The Added Value of Value Added Tax: People are more willing to pay tax

Abstract

Raising domestic tax revenues is a priority for most sub-Saharan African countries. But the tax bases in most African countries are undermined by widespread tax avoidance and evasion. A new study from CMI supports the claim that improved knowledge about the tax system makes a difference in people’s willingness to pay tax. The study shows that exposure to Value-Added-Tax (VAT) makes people take a greater interest in tax issues and makes them more willing to pay tax. This brief argues that making the VAT more visible, can be an efficient and important tool in building a tax-paying culture.