Tax administration and firm performance: Evidence from VAT refund delays

Daniel Overbeck, Kwabena Adu-Ababio and Eliya Lungu

No wp-2026-107, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper shows how weak tax administration leads to economic costs for firms in developing countries. We study the case of VAT refund processing in Zambia, where, as we document in a novel dataset, firms wait 700 days for reimbursement, on average. Linking our dataset to the universe of tax returns at the firm level, we establish several stylized facts on the pitfalls of refund processing and estimate the economic costs of refund delays for firms.

Keywords: Value-added tax; Zambia; Tax compliance (search for similar items in EconPapers)
Date: 2026
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