This paper explores authoritarian states’ attempts to frame tax compliance in relation to particular notions of national identity, citizenship and political authority. It has a specific focus on taxation of the informal sector, drawing on fieldwork conducted in Asmara and Kigali May/June 2018, and is part of a pilot project on tax compliance in authoritarian African states.
Encouraging citizens to pay taxes is no easy task. This is particularly the case in contexts where the infrastructure needed to accurately assess tax obligations and to transfer monies owed to the state is underdeveloped. These problems are magnified in many African states, where governments tend to have relatively poor information systems, where there is a longstanding lack of voluntary compliance among taxpayers, and where the informal sector constitutes a significant share of both gross domestic product and total employment.
Although evidence suggests that the potential revenue benefits of taxing the informal sector are modest, many African states are motivated by the promises of equity, efficiency, and the desire to build a culture of tax compliance that it offers. Some proponents of broadening the tax base to include the informal sector view it as a way to promote good governance, insofar as nascent taxpayers will be motivated to hold their leaders accountable. Such concerns may be much less salient in authoritarian African states, however, where efforts to implement tax reforms have more to do with mobilizing untapped domestic resources and improving the investment climate than with encouraging broader governance gains. The paper therefore addresses a specific question – how do authoritarian states attempt to induce tax compliance by informal sector workers, given that they cannot easily or credibly promise greater political representation/responsiveness in return for taxes?
We begin to answer this question by presenting evidence on the ideas, narratives and framings which are used by governments in Eritrea and Rwanda to induce compliance. The two states are similar in important ways – both are deeply authoritarian, with a long history of state control of the economy. Both are also ruled by political parties who have their roots in liberation wars. Given the prevalence of historical and contemporary liberation rhetoric both in the foreign policies of these states and in other areas of their domestic governance, we hypothesise that these characteristics will also affect the framing of tax in relation to good citizenship in these states. The paper draws on interviews with political representatives, civil society and officers within the tax collection authorities in both states, as well as analysis of tax compliance campaign language and imagery, to consider: (i) what are the challenges in taxing the informal sector in Rwanda (Kigali) and Eritrea (Asmara)?; (ii) to what extent and in what ways are narratives of national identity and liberation ideology evident in campaigns to induce compliance?, and (iii) what are the implications of this for understanding how authoritarian African states articulate their domestic authority and legitimacy?