Gender and Drivers of Tax Compliance in Rwanda and Eswatini

Co-Author: Dr Giulia Mascagni (non-ECPR registered) Current academic discourse on tax compliance has little to say regarding the interaction between gendered group interests in relation to tax attitudes and perceptions in the low- and middle-income contexts. We consider interactions with tax regimes to be important and vary across gendered identities. Have overtures towards addressing gendered bias in fiscal policy led to increased benefits across interest groups and has this change been popular? And if not, are we able to clearly identify factors that drive tax compliance both across a range of compliance acts (registration, declaration, remittance) and genders? Contributions to this topic show that women’s perceptions of the tax system are more positive, they are consistently more compliant than their male counterparts, and they have a higher tax morale than men in some contexts. To better understand the determinants of women’s compliance behaviour, we analyse administrative data, alongside perception and attitudes surveys conducted on the same sample. Most comparable studies have been conducted in the Global North. Our contribution to the literature is to locate our research in the lower income context, specifically in Rwanda and Eswatini. The manner in which we categorise our outcome and explanatory variables is based on the framework found in Prichard et al (2019), broadly understood as within enforcement, trust and facilitation. This exercise is useful because it provides important descriptive statistics about personal and corporate income taxpayers in these countries, disaggregated by gender. The current paper is a purely descriptive analysis, and we believe it is an important step in itself because it provides new insights into taxpayer behaviour, attitudes and perceptions in Rwanda and Eswatini, with these being relevant to understanding the drivers of tax compliance. Research accounting for gender differences serves as a basis for conducting more informative studies on this topic and region. The data comes from two separate tax perception surveys conducted in Rwanda and Eswatini, merged with administrative data on the same set of taxpayers, shared by the revenue authorities in both countries. We find that, on average, women know less about their place within the tax system. One reason that we suggest drives this disparity is the size of the businesses they own - men tend to own larger businesses, which allow them to hire tax accountants, perform electronic operations, and hold bank accounts, all of which grant them greater access to the tax system. We argue that this constitutes a disadvantage to women, who are less informed about their tax obligations and are unable to circumvent them. Men meanwhile are able to leverage their relative knowledge through outright non-compliance or strategic under-reporting of income. In the literature, the key determinants of tax compliance have been enforcement- and deterrence-driven factors, whereas our analysis demonstrates the salience of knowledge as an important driver of tax outcomes for women.