WASHINGTON UNIVERSITY PAPERS SERIES

TAXATION REFORMS & THE RESPONSE OF AFRICAN POLITY

A Critique of Taliceiro, R. 2004. Designing Performance: The Semi-Autonomous Revenue Authority Model in Africa and Latin America, Policy Research Working Paper 3423. World Bank: Washington, D.C.

Author: Sayo Ajiboye Washington University In St Louis

It is worth nothing that the populace does adjust their behavior to match the errant tendencies of political agents. Will the people indeed be free from the octopoidal arm and ever-present influence of political agents if nations create autonomous revenue authorities? It is received wisdom that the more fair efficient and effective tax administration is, the higher the compliance rate of tax-payers to paying their taxes. It is interesting to note the Taliecio’s observation that “no matter what the taxpayer does, the dominant strategy of the political class is not to invest in reform.” For politicians to maximize their benefits, there is a temptation to renege on their net commitment to reform. The taxpayers responds to this by opting not not to comply with drives for reform, it is more cost effective to maintain the status quo.
Taliciero suggested three technologies for reforming the tax regimes, but all of it have been shown to be susceptible to political manipulations. Establishing institutions that are involved in joint decision making may look like an answer but how does one deal with the fact that stakeholders often become stake raiders when opportunities to do this present themselves? Consider the particular Ghanaian situation that was cited, has this helped resolved issues of political opportunism among the new members of the House of Chief? Has this stopped the Chiefs themselves from continuing the process that they have perfected over decades?
On the technology of delegation, can the newly delegated authority become a “power center that wields influence beyond and become corruptible? In Nigeria of the 1990s, Adekanola and Company was contracted by the government to collect taxes in at least 15 States of the Federation. This worked well except that Adekanola and Company became a new power center. As long as it supports the intentions of the powers that gave him authority, all went well; but the moment Adekanola went after major companies in which the powerful people have interest, its authority as the government tax Collector was revoked. Given this scenario, when does the political systems become again a servant of the people? How can government become people’s agent?