Transparency, Procedural Fairness and Property Tax Compliance: Evidence from Kananga, DRC

Status

Upcoming

The past decade has seen an upsurge in research exploring strategies for building public trust in public authorities as a means to increase tax morale and tax compliance. Most of those studies have focused on the extent to which promises of improved service delivery, or expanded citizen voice, translate into increased willingness to pay taxes. However, a small but growing strand of research suggests that an equally important driver of willingness to comply may lie in public perceptions of the procedural fairness of tax systems – that is, beliefs about whether all taxpayers are treated fairly and equally. That research is potentially of particular relevance to tax authorities, as they have more direct control over procedural fairness than they do over public spending and political voice. To explore the potential impact of procedural fairness on compliance this study explores the impact of introducing a more transparent approach to property valuation, and tax assessment, on willingness to comply. The research builds upon the introduction of a novel property tax reform in Kananga, DRC, which included the introduction of a simplified, formula-based, approach to property valuation. To explore whether greater transparency results in greater perceptions of procedural fairness, and greater willingness to pay, we will randomize whether taxpayers receive detailed explanation of the valuation methodology, and of the valuation of their own property, alongside their tax bills. We will then be able to assess the impact of that additional transparency on perceptions of procedural fairness and, in turn, actual tax compliance.