Governments across low-income countries have invested heavily in electronic tax filing and payment systems in the expectation that digitalisation will reduce compliance costs for taxpayers, lower enforcement costs for tax administrations, reduce opportunities for collusion in face-to-face interactions, and ultimately strengthen tax compliance. Yet these expected gains are not automatic. Savings in time and effort may not translate into higher compliance, enforcement gains may be limited by administrative capacity, and the behavioural effects of reduced in-person contact depend on how taxpayers and officials previously interacted.
This study provides causal evidence on the impact of mandatory electronic filing and payment in Senegal. It evaluates the introduction of Etax, a system that allows taxpayers to file and pay remotely. After a pilot phase, the system was made mandatory in July 2017 for firms managed by the Large Taxpayers Centre (LTC). By January 2018, about 80 per cent of targeted taxpayers had registered and were using the platform. The paper asks whether this reform improved tax compliance among the firms that matter most for revenue mobilisation.
“Mandatory e-filing and e-payment in Senegal did not generate clear short-run compliance gains among large taxpayers, but did substantially improve administrative data quality, revealing that formal employment had been underestimated by at least 20 per cent under paper-based filing.”
