Taxation and Post-­‐‑conflict Statebuilding: Exploring Informal Taxation and its Implications in Sierra Leone Samuel Jibao, Centre for Economic Research and Capacity Building Wilson Prichard, Interna9onal Center for Tax and Development Vanessa van den Boogaard, University of Toronto

1. Taxation and Post-­‐‑conflict Statebuilding:
Exploring Informal Taxation and its
Implications in Sierra Leone
Samuel
Jibao,
Centre
for
Economic
Research
and
Capacity
Building
Wilson
Prichard,
Interna9onal
Center
for
Tax
and
Development
Vanessa
van
den
Boogaard,
University
of
Toronto

2. Taxation and post-­‐‑conflict
statebuilding

3. …but caution is needed

4. Understanding informal taxation in
post-­‐‑conflict se@ings

5. An initial mapping from Sierra
Leone

6. Classifying informal taxes
“All
payments—whether
cash
or
in
kind,
including
labour
9me
—that
are
made
as
a
result
of
the
exercise
of
poli9cal
power,
social
sanc9on
or
armed
force
(as
opposed
to
market
exchange)”
§ Formal
State
“Taxes”:
Statutory
taxes
under
the
law
§ Informal
State
“Taxes”:
Payments
to
state
officials
not
mandated
by
law
§ Informal
Taxes
to
TradiBonal
AuthoriBes:
Payments
to
tradi9onal
authori9es,
not
mandated
by
law
§ Informal
Non-­‐State
Taxes:
Payments
to
groups
including
armed
groups,
community
development
associa9ons,
religious
organiza9ons,
informal
security
groups

7. (1) Informal taxes are extensive
Proportion of tax payments per household
per annum, by tax type
Formal taxes to
state actors
Informal taxes to
state actors
Informal taxes to
chiefs
Informal taxes to
non-state actors

8. (2) The burden can be heavy…
0%
25%
50%
75%
100%
Mean
proporBon
of
taxpayers
that:
Took
out
a
loan
in
the
last
year
in
order
to
pay
a
tax
Decided
not
to
engage
in
a
par9cular
economic
ac9vity
in
the
least
year
becauses
the
taxes
were
too
burdensome

9. … and regressive
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Total
Tax
Formal
Informal
State
Trandi9onal
Authori9es
Non-­‐State
Tax
payments
as
a
proporBon
of
income
Lowest
Quin9le
Top
Quin9le

10. (3) Higher trust in informal than
formal
0%
20%
40%
60%
80%
100%
Central
government
taxes
(N=140)
Local
government
taxes
(N=1436)
Local
government
user
fees
(N=556)
Informal
state
taxes
(N=257)
Chiefdom
taxes
(N=558)
Non-­‐state
taxes
(N=1618)
Mean
proporBon
of
taxpayers
believing
that
the
taxing
actor
uses
tax
revenues
to
benefit
the
community
most,
some
or
none
of
the
Bme
Most
of
the
9me
Some
of
the
9me
None
of
the
9me

11. Implications
1. Informal
taxa9on
should
be
considered
in
assessments
of
livelihoods/poverty
2. The
informal
is
cri9cal
to
thinking
about
reform
of
the
formal
–
and
why
the
formal
generally
underperforms
3. Informal
tax
may
meet
ci9zen
needs,
implying
desirability
of
exploring
“second
best”
or
“hybrid”
structures
4. Paaerns
of
taxa9on
may
offer
powerful
insights
into
the
character
of
local
governance
and
power

12.
Thank
you!
v.vandenboogaard@utoronto.ca
sjibao@yahoo.ca
w.prichard@ids.ac.uk