Tax agents occupy a pivotal yet understudied position in tax systems. Most existing knowledge on their role comes from earlier work in high- and upper-middle-income countries. This generally finds that taxpayers hire agents to meet obligations they perceive as complex, while a smaller group seeks to minimise their tax liability through the exploitation of legal loopholes made possible by aggressive tax advice. This dual compliance-avoidance role has scarcely been examined in low-income countries. Exploratory evidence from Uganda, drawn from small surveys of revenue officials and tax agents, suggests a similar pattern – taxpayers primarily engage agents to navigate a complex tax system, and the most requested services are reviewing bookkeeping and preparing returns. On the other hand, tax officials prefer interacting with agents, and view agent-prepared returns as less prone to large audit adjustments. However, these surveys could not establish system-wide effects, due to small samples and limited access to data.
Summary of ICTD Working Paper 221.
