analysing tax compliance with administrative data in rwanda
TRANSCRIPT
Analysing tax compliance with administra5ve data in Rwanda
Giulia Mascagni, Nara Monkam, Denis Mukama, Christopher Nell
ICTD Annual Mee-ng February 2016
Part 1 Ini5al descrip5ve results
2
Tax types in Rwanda • VAT and PAYE largest contributors • Decline in interna-onal trade taxes • Small share of PIT and CIT: compliance?
3
Tax collec5ons by size
4
• 60% PIT (real) collec-on from top 10% • 85% CIT (real) collec-on from top 10%
Tax by loca5on
5
Losses and nil-‐filers
6
Audit rates • By tax types:
– VAT about 10% – PIT about 3% – CIT about 2%
• Mostly taxpayers registered in Kigali • Mostly large and top-‐medium taxpayers
• Results feed into Experiment 1 – Loca-on, stra-fica-on, …
7
Compliance gap • Range of compliance based on audit data
– Probably closer to upper bound • Higher compliance gap in PIT, then CIT, then VAT, lastly PAYE • Larger for small and medium and outside of Kigali
8
Effec5ve tax rates • Calculated as tax payable / overall income • Progressive on paper but regressive in prac-ce
• Lower rate in the real regime vs. lump sum – Compliance costs – Enforcement pressure – Audit probability
• More work to be done
9
Part 2 Overview of experiments
Overview of experiments • Iden-fying drivers of compliance • Effec-veness of RRA communica-ons and delivery mode
• Pilot of possible future interven-on • Possibility of scaling up if successful • Varia-ons in:
– Informa-on available to taxpayers – Taxpayer’s percep-ons – Not actual tax parameters (e.g. audit rates)
11
Experiment 1 • Pilot for bigger experiment 2 • Treatment lecer (1,000):
– Informa-on about sanc-ons: higher if caught by audit, lower is self disclose
– In 3 languages • Outcome: revisions (amount and probability) • Data being analysed – no results yet • Lessons learned
– Taxpayers reac-ons: stories – Process of lecer prepara-on and dissemina-on – Personalisa-on
12
Experiment 1 leNer
13
Experiment 2 • Treatment lecers:
– Deterrence message – Public service and self-‐reliance – Control: reminder of deadlines
• Delivery methods: – Lecers for CIT – Emails for CIT – SMS for CIT and PIT
• Timeline: tax filing period • Outcome: reported income in 2014 return • Data to be analysed star-ng in April 2016
14
Deterrence Do you know that if you do not declare and pay your taxes on 6me, RRA can fine and possibly prosecute you?
Pay your taxes on 6me and avoid fines and penal6es.
15
Public services message By paying your taxes you make it possible to educate our children, fund our healthcare, and keep us safe. Pay taxes. Build Rwanda. Be proud.
16
Now fully implemented!!!
17
Final reflec5ons • Teamwork
• Mutual learning – Research methods – Context and prac-ce of tax in Rwanda
• Confiden-ality
18
Thank you!