Does the adoption of peer-to-government mobile payments improve tax revenue mobilization in developing countries?

Industry 4.0 in Financial Services: Mobile Money Taxes, Revenue Mobilisation, Financial Inclusion, and the Realisation of Sustainable Development Goals (SDGs) in Africa

“…Mobile money taxes could boost revenue generation efforts due to the ease of tax collection. The fact that tax collection is carried out through telecommunications companies and mobile money transfer businesses on behalf of the government makes tax collection simple, convenient, and less cumbersome [49,50]. Just like withholding taxes, governments can collect taxes directly from a few sources as compared to millions of mobile money users.…”

“…There is no denying that mobile money taxes reduce tax evasion and increase tax compliance and ultimately tax collections. They also reduce the effects of corruption, institutional weaknesses, lack of technical skills, and shortage of human capital on tax collections [49,51]. Albeit this is not to say mobile money taxes are the way to go.…”

“…Taxation may discourage the usage of mobile money and increase tax evasion by encouraging the poor and the informal sector to revert to cash, thus leading to a reduction in tax revenue. Wandaogo et al [49] propose that person-to-government payments using mobile money platforms improve the effectiveness of domestic revenue mobilisation in countries affected by the prominence of informality, bureaucratic tendencies, corruption, and low levels of financial inclusion. These features characterise most African economies.…”

Sustainable mobilisation of tax revenues to enhance economic growth in Sub-Saharan Africa: Challenges, opportunities, and possible areas of reform

“…According to Eilu et al (2021), the adoption of an array of online tax return services in SSA was targeted to enhance tax compliance and expand tax revenue generation for improved economic development and growth as well as infrastructural development. The outcomes of these different online service systems are contested as some researchers table that these measures improved tax compliance and sustainable tax revenue mobilisation to some extent Wandaogo, Sawadogo, & Lastunen, 2022), while others submit that these further complicated the already intricate tax systems in developing countries. The complexity of tax systems is argued to lower tax morale and tax compliance leading to a reduction in tax revenues (Mpofu, 2021b;Sebele-Mpofu & Chinoda, 2019).…”

“…According to Wandaogo et al (2022), there is limited empirical evidence explaining the relationship between sustainable tax revenue mobilisation and the use of ICT in African countries. There is empirically supported evidence pointing to positive outcomes of exploiting IT and the internet in domestic revenue generation.…”