the high firm death rates observed in low- and middle-income countries (McKenzie and Paffhausen 2019). The lack of identity systems in many low- and middle-income countries is mirrored in low coverage of personal income taxes, which account on average for 26 percent of tax revenues in high-income countries but only 14 percent in low-income countries (UNU-WIDER Government Revenue Dataset 2022).

Recent technology advances have significantly reduced the costs of identifying individuals at scale and linking identity information across different government functions and registries. For example, countries can enroll millions of people in national systems with biometric identification (like fingerprints or retinal scans) across a nation within a few months.<sup>3</sup> Such identification can then serve purposes not only related to taxation but also to other government functions like verifying eligibility for public benefits and establishing a financial credit history. In the case of real estate taxation, GIS-enabled systems can capture property location and features at scale (Knebelmann 2022), facilitating the administration of real estate taxes as well as the provision of public services like postal service, electricity, and sewerage.

In an interesting case, Ghana started identifying taxpayers using the “Ghana Card” national identification system in 2021 in place of tax identification numbers issued by the tax authority. Ghanaian tax officials reported that, as a result, they could identify 85 percent of Ghanaians compared to 4 percent under the tax-ID-based system, and the number of filers increased from 4 million to 6.6 million within a few months (GhanaWeb 2022, Ghana News Agency 2021). While this episode does not provide causal evidence, it certainly suggests that an integrated identification system across key sectors of the economy can broaden the reach of the tax authority and may transform a nation’s revenue potential.

However, information technologies are not silver bullets. Too often, tax authorities make large investments in taxpayer identification and registration but fail to observe commensurate increases in tax receipts. Means to act on such advances are pivotal. An illustrative case in this vein comes from a randomized experiment in Liberia (Okunogbe 2021). In 2014, the Liberian Revenue Authority undertook a block-by-block digital mapping exercise of a pilot area in the capital, Monrovia, to construct an electronic database of properties and the identities of owners. This database then served as the basis for evaluating distinct tax enforcement measures. Simply informing taxpayers that the tax authority had identified them as the owners of the properties in question (using a notice that included their name and a photo of the property) did not shift the likelihood that tax liabilities were paid (relative to a generic notice). However, combining this identification signal with information about penalties for delinquency more than quadrupled the payment rate. A second experiment sent a signal that the stated penalties would be enforced on defaulters, which achieved a further increase in compliance. This example highlights that tax authorities must complement technology-assisted identification and registration with enforcement actions to translate those investments into tax receipts.

> 3 The Kenyan government reportedly registered 36 million citizens for its Huduma Namba digital national ID in the space of two months (Kimani 2019).

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