One source of perceived unfairness in many developing countries is the fact that individuals, and some (particularly small) businesses, have limited understanding of the taxes that they are required to pay. In the most recent round of the Afrobarometer survey, over 55 percent of taxpayers reported that it was “difficult” or “very difficult” to find out what taxes they are supposed to pay to government.<sup>98</sup> This appears particularly true of local-level payments in lower-income countries, which may appear comparatively arbitrary. Recent surveys in Sierra Leone and the DRC both find that taxpayers report surprisingly limited understanding of the taxes that are due.<sup>99</sup> Discussions with small traders in Ghana, and elsewhere, similarly reveal significant difficulty in accessing information about the tax system,<sup>100</sup> while small firms often face substantial complexity and administrative hurdles to enter the formal sector.<sup>101</sup> Reflecting this concern, there has been mounting interest across countries in expanding taxpayer education.<sup>102</sup> However, an important distinction is needed. Tax administrations often conceptualize taxpayer education as an effort to teach taxpayers why paying taxes is important. However, what may be most needed to expand trust is taxpayer education that helps taxpayers to understand the taxes that they must pay, and how to do so.

A second source of unfairness is arbitrary or abusive enforcement – and extraction – by tax collectors. Surveys indicate that tax agencies are frequently among the least trusted institutions in many developing countries, and/or those most likely to be involved in corruption.<sup>103</sup> Particularly where face-to-face interactions between taxpayers and tax officials are common there is extensive evidence of tax collectors seeking to extract informal payments from taxpayers. There is some evidence that this extraction sometimes targets more vulnerable or less educated groups,<sup>104</sup> or areas in which tax collectors have greater leverage – owing, for example, to the ability to disrupt business operations<sup>105</sup> or access to key services.<sup>106</sup> But extraction is not limited to these groups. In trying to combat this source of mistrust in the tax system, one strategy has been to try to minimize face-toface interaction between tax officials and taxpayers, or to minimize the scope for negotiation of tax payments. Automation has been one strategy for doing so. Another has been simplification, to remove discretion in the administration of tax laws. An alternative option is to seek to offer

> 98 Afrobarometer Data, Round 6, 2014/15, available at http://www.afrobarometer.org.

> 99 Jibao, S., Prichard, W., & van den Boogaard, V. (2017). Informal taxation in post-conflict Sierra Leone: Taxpayers' experiences and perceptions. _ICTD Working Paper 66_ . Brighton: International Centre for Tax and Development.; Paler, L., Prichard, W., Sanchez de la Sierra. R., & Samii, C. (2017). Survey on total tax burden in the DRC, Final Report. Kinshasa: Department for International Development.

> 100 Prichard, W., & van den Boogaard, V. (2017). Norms, power and the socially embedded realities of market taxation in Northern Ghana. _African Studies Review_ , 60 (1):171-194.

> 101 Joshi, A., Prichard, W., & Heady, C. (2014). Taxing the informal economy: The current state of knowledge and agendas for future research. _Journal of Development Studies_ , 50 (10):1325-1347.

> 102 OECD. (2015). _Building tax culture, compliance and citizenship: A global source book on taxpayer education_ . Paris: Organisation for Economic Cooperation and Development.

> 103 For example, Fjeldstad, O-H. (2005). Corruption in tax administration: Lessons from institutional reforms in Uganda. _CMI Working Paper 10_ . Bergen: Chr. Michelsen Institute.

104 Prichard, W., & van den Boogaard, V. (2017). Norms, power and the socially embedded realities of market taxation in Northern Ghana. _African Studies Review_ , 60 (1):171-194.

> 105 Hassan, M., & Prichard, W. (2016). The political economy of tax reform in Bangladesh: Political settlements, informal institutions and the negotiation of reform. _Journal of Development Studies_ , 52 (12):1704-1721; Sequeira, S., & Djankov, S. (2016). Corruption, Trade Costs and Gains from Tariff Liberalization: Evidence from Southern Africa. _American Economic Review_ , 106 (10): 3029-63

> 106 Paler, L., Prichard, P., Sanchez de la Sierra, R., & Samii, C. (2017). Survey on total tax burden in the DRC, Final Report. Kinshasa: Department for International Development.

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