Taxing the ‘hard-to-tax’ in low and middle-income countries: an examination and Kenyan case study

Thesis

The term ‘hard-to-tax', in tax evasion literature, refers to farmers, small and medium-sized enterprises (SMEs), and professionals. However, scholarly discourse on the hard-to-tax in low and middle-income countries (LMICs) has focussed primarily on farmers and SMEs. Professionals are rarely critically considered despite the acknowledgement in the literature that, considering their potential earnings, the absolute amount involved in evasion by professionals in LMICs is probably higher than farmers and SMEs. The primary goal of this thesis is to interrogate the phenomenon of tax evasion by hard-to-tax professionals in LMICs by answering the research question: what are the barriers to tax compliance by these hard-to-tax professionals and how can tax authorities in LMICs effectively improve compliance among these taxpayers? The researcher utilises several methods and data sources to answer this question. Secondary data sources provided useful knowledge regarding theoretical accounts of tax evasion and the administrative options available to tax authorities dealing with hard-to-tax groups. The researcher enriched this secondary data using primary data collected for a case study explicitly interrogating tax compliance among self-employed dentists and lawyers in Kenya, a lower-middle income country. Through the case study, the researcher obtained rich qualitative data via open-ended semi-structured interviews with taxpayers and tax experts in Kenya. The interview data was analysed, using key tax evasion theories, applying a thematic analysis method. A detailed narration of the major and minor themes that emerged from the data is presented in Chapter 4. The findings of this research make a significant and substantial contribution to: existing knowledge on tax evasion and compliance in Africa, taxation of hard-to-tax professionals in LMICs, effects of corruption and poor service delivery by government on tax compliance attitudes, presumptive taxation of professionals, and the potential role of professional bodies and associations in promoting tax compliance among their members.

Authors: Ogembo, D

• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English
• Keywords: Taxation in Kenya; Taxing Professionals; Presumptive Tax; Developing Countries; Tax Evasion; Hard-to-Tax
• Subjects: Taxation