Tax bargaining, fiscal contracts, and fiscal capacity in Ghana: A long-term perspective

Abstract

Many Sub-Saharan African countries are unable to generate sufficient tax revenues for public purposes. While it is widely accepted that governments’ ability to tax is shaped by politics, the precise mechanisms through which this relationship takes place in practice remain elusive. Based on a historical analysis of four major tax reforms in Ghana from the 1850s to the late 1990s, this article captures the various ways in which taxpayers negotiate with the state in an attempt to limit the extent of taxation, especially in cases where state reciprocity falls short of what people expect. Our evidence suggests that, far from being a recent development, effective taxation in Ghana has long depended on the ability of the state to convince taxpayers that tax revenues will be used for the public benefit. A history of misappropriation of tax revenues, overt corruption, and profligacy diminished taxpayers’ support for governments’ tax efforts. More generally, the article points to the importance of understanding how tax bargaining works in practice and people’s perceptions of their governments over the long term to overcome resistance to tax reforms.

Colonial Basis of Anomie in African Youth: Implications for Political Governance

“…For instance, the colonial Governor "enjoyed to the full the outward trappings of power, living in an imposing palace, driven in large limousines flying the flag, reverenced by all, and on ceremonial occasions dressed in a cocked hat and plumes and a quasi-military uniform" (Crowder, 1987, p. 5). Aboagye and Hillbom (2020) provided archival evidence that revealed how the African members of the Legislative Council unsuccessfully moved against the corrupt practices prevalent in Gold Coast (now Ghana) among colonial officials. In their words, the officials operated with reckless abandon, "gallivanting the finances of the" colony; lavishing and corruptly inflating construction sums by "building palatial bungalows" across the colony at the bloated "rate of £130,000 a year"; and appointing their European kits and kin as government "officials in large numbers" beyond the administrative need and capacity of the colony.…”

Colonial Basis of Anomie in African Youth: Implications for Political Governance

“…For instance, the colonial Governor "enjoyed to the full the outward trappings of power, living in an imposing palace, driven in large limousines flying the flag, reverenced by all, and on ceremonial occasions dressed in a cocked hat and plumes and a quasi-military uniform" (Crowder, 1987, p. 5). Aboagye and Hillbom (2020) provided archival evidence that revealed how the African members of the Legislative Council unsuccessfully moved against the corrupt practices prevalent in Gold Coast (now Ghana) among colonial officials. In their words, the officials operated with reckless abandon, "gallivanting the finances of the" colony; lavishing and corruptly for today's youth bulge averaging 60% in the continent.…”

Accountability, Legitimacy, and Voluntary Tax Compliance: A Case Study in Tax Offices in Mazandaran Province of Iran

“…One of the most important psychological factors that shape voluntary tax compliance is the perceived legitimacy of authorities (Van Dijke et al, 2019., Gobena, 2017;Jagers, Matti, & Nordblom, 2016;Levi et al, 2009;Wahl, Kastlunger, & Kirchler, 2010;Wenzel & Jobling, 2006). Where legitimating beliefs exist, citizens would accept that the state has the right to impose taxes, and tax compliance is likely to become more habitual.25 Conversely, the less citizens consider the government to be legitimate, the less they will accept their obligation to give it the taxes it needs to govern (Aboagye & Hillbom, 2020). The need to examine the issue of voluntary tax compliance as a subset of the broader body of knowledge on tax compliance as emerged, motivated by the inadequacies of the prevailing orthodoxies on tax compliance to capture the proportion of total compliance not accounted for by economic models (Modugu, Eragbhe, & Izedonmi, 2012).…”