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Mitigating VAT compliance costs – A developing country perspective


The large-scale presence and the regressive nature of tax compliance costs, especially those in respect of the value-added tax (VAT), are well documented features of the tax systems of developed countries. Although there is less evidence available in the case of developing countries, empirical studies strongly suggest that enterprises in these countries face similar problems. In this article, legal design and administrative features and other strategies adopted by governments and their revenue authorities in developed and developing countries to mitigate VAT compliance costs are considered and contrasted. The proposition that governments and revenue authorities in developing countries have learnt from developed countries and deployed more sophisticated technical and automated solutions will thus be evaluated. The article also highlights the benefits and importance of minimising the division between the legal and administrative design approaches to mitigating high VAT compliance costs. It concludes by making suggestions on further interventions that could be considered by developing countries to mitigate VAT compliance costs, perhaps improve compliance and therefore boost much needed VAT revenues.

Author profiles

Prof Christopher Evans
Chris is a Professor, School of Taxation & Business Law, UNSW Sydney, Extraordinary Professor, Department of Taxation, University of Pretoria, and International Research Fellow, Centre for Business Taxation, University of Oxford. - Current at 27 October 2020
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Sharon Smulders
Sharon is an Associate Professor, Department of Financial Intelligence, University of South Africa, South Africa.


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