Determinants of municipal taxes payment by informal micro and small business in Côte d’Ivoire

• Author: Traore, N.
• DOI: https://doi.org/10.47348/AMTJ/V2/i1a5
• Published date: 28 March 2022
• Date: 28 March 2022
• Citation: (2022) 2 AMTJ 83
• Pages: 83-104

https://doi.org/10.47348/AMTJ/V2/i1a5

83

DETERMINANTS OF MUNICIPAL TAXES PAYMENT BY

INFORMAL MICRO AND SMALL BUSINESS IN

CÔTE D’IVOIRE

DÉTERMINANTS DU PAYEMENT DES TAXES COMMUNALES

PAR LES MICRO ET PETITES ENTREPRISES INFORMELLES

EN CÔTE D’IVOIRE

DETERMINANTES DO PAGAMENTO DE IMPOSTOS

MUNICIPAIS POR MICRO E PEQUENAS EMPRESAS

INFORMAIS NA COSTA DO MARFIM

NohouaTraore*

JEL classif ication: M210, H26

ABSTRACT

This article analyses the determinants of municipal tax payments of informal

micro- and small businesses in Côte d’Ivoire. The dat a used relates to 276 informal

production units surveyed in the framework of the CAPEC/IDRC project. Using

descriptive statistics and the estimation of a Probit model, the study highlights the

variables th at both negatively and positively inf luence tax payments. It e merged that

the perception of the high level of taxes, the fact that the manager of the informal

production unit is an Ivorian, the narrowness of the market, and the problems

regarding premises negatively affected tax payments. Conversely, the business

environment, the electronic payment of invoices, the simplification of procedures,

the number of employees and the difficulties in accessing financing enhance the

propensity of managers to pay taxes.

Keywords: micro, small business, determinants, informal, municipal,

payment, taxation

RÉSUMÉ

Ce papier analyse les déterminants du paiement de la taxe communale des micro et

petites entre prises informelles en C ôte d’Ivoire. Les données utilisé es portent sur 276

unités de produc tions informelles enquêt ées dans le cadre du projet CA PEC/IDRC.

A l’aide des statistiques descriptives, et une estimation d’un modèle Probit, l’étude

met en exergue les variables qui influencent à la fois positivement et négativement

le payement des impôts. Il ressort que la perception du taux élevé de la taxe, le fait

que le propriétaire de l’unité de production informelle soit ivoirien, l’étroitesse du

marché, et les problèmes liés au locaux, ont négativement affecté le paiement des

*Assistant Professor, Université Alassane Ouattara de Bouaké, Côte d’Ivoire; Membre du

Laboratoire ’Analyse et de Modélisation de Politiques Economiques (LAMPE), Bouaké, Côte

d’Ivoire Chercheur Associé à la Cellule d’Analyse de Politiques Economiques du CIRES (CAPEC),

Abidjan, Côte d’Ivoire.

(2022) 2 AMTJ 83

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84AFRICAN MULTIDISCIPLINARY TAX JOURNAL

https://doi.org/10.47348/AMTJ/V2/i1a5

taxes. A l’opposé, l’environnem ent des affaires, le payem ent électronique des fac tures,

la simplification des procédures, le nombre des employés et les difficultés d’accès au

finance ment renforcent la propension des gérants à payer les taxes.

Mots-clés : micro, petites entreprises, déterminants, informel, communal/

municipal, payement et imposition

RESUMO

Este document o analisa os factore s determinant es do pagamento de impost os municipais

por parte de micro e pequenas empresas informais na Costa do Marfim. Os dados

utilizados referem-se a 276 unidades de produção informais inquiridas no âmbito

do projecto CAPEC/IDRC. Utilizando estatística descritiva e uma estimativa

com base no modelo Probit, o estudo destaca as variáveis que influenciam tanto

negativa como positivamente o pagamento de impostos. Verificou-se que a percepção

do elevado nível de impostos, o facto de o gestor da unidade de produção informal

ser marfinense, a exiguidade do mercado, e os problemas relativos às instalações

afectaram negativamente o pagamento de impostos. Em contrapartidas, o ambiente

empresarial, o pagamento electrónico de facturas, a simplificação de procedimentos,

o número de empregados e as dificuldades de acesso ao financiamento aumentam a

propensão dos gestores em pagar impostos.

Palavras-chave: micro, pequenas empresas, determinantes, informal,

municipal, pagamento, impostos

I INTRODUCTION

In an economic context marked by the persistence of the informal

economy, taxation of micro-enterprises is becoming a key issue to

develop modern small- and medium-sized enterprises (SMEs) capable

of generating added value and contributing to state tax revenues

(Mabrouk, 2017). Moreover, this is imperative for developing countries

where the mobilisation of domestic resources remains a concern for

public authorities to achieve development objectives, particularly that

of poverty reduction (Essama-Nssah, 2002).

However, reforms in business registration and taxation that can

be carried out to better adapt regulatory requirements to the needs

and characteristics of very small enterprises, including self-employed

workers, have not achieved the goals of business formalisation in

developing countries (ILO, 2021). In Côte d’Ivoire, statistics from the

Directorate General of Taxes reveal that about 60 per cent of informal

enterprises are subject to synthetic taxes, while their contribution

represents only 1 per cent of the tax revenues collected in the country.

In addition, only 3.5 per cent of informal activities are known to

municipal services (AGEPE, 2012).

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