The tax elasticity of formal work in African countries

Andy McKay, Jukka Pirttilä and Caroline Schimanski

No wp-2019-69, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: A key policy problem in most developing countries is the size of the informal sector and its persistence over time. In need to increase their tax revenues, policy makers face a trade-off between decreasing tax rates (making formalizing potentially more attractive) and alternatively raising tax rates (potentially slowing down the formalization of the economy if people prefer informal employment or self-employment).

Keywords: Developing countries; Informality; Labour supply; Sub-Saharan Africa; Taxation (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-afr, nep-iue, nep-lma, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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