Revenue Administration in Sub-Saharan Africa - International Tax ...

Key observationsSmall and micro enterprises are generally many in number, usually do not maintainaccounting records, often are illiterate, and contribute little to revenue. Modernrevenue administrations realize they will not achieve overall complianceimprovements unless they reign in this hard-to-tax segment. Improving effectivenessof the taxation regime for small and micro enterprises will broaden the tax base,improve the fairness in the tax system and enhance overall voluntary compliance.Survey results indicate that preliminary work is being done to implement specialtaxation regimes for small and micro enterprises. Most of the special regimes arepresumptive, turnover-based systems and they exclude incorporated businesses anddefined services. 102102 A review of a number of taxation regimes for small and micro taxpayers in SSA countries reveals that they generallydo not meet two critical objectives in the design of a presumptive regime, that is: (1) equivalence with normal regime;and (2) transition across regimes (Masters, forthcoming). Because these objectives are critical in the design of apresumptive regime, achievement of intent is questionable. The paper makes a number of recommendations foraddressing these critical design issues.65