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

Nohoua Traor e*

JEL classif ication: M210, H26

ABSTRACT

This arti cle analyses the d eterminants of municipal t ax payments of informal

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

production unit s surveyed in the f ramework of th e CAPEC/IDRC project. Using

descriptive st atistics and the estimation of a P robit model, the study h ighlights the

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

the percepti on of the high level of taxes, the fact t hat the manage r of the informa l

production unit i s an Ivorian, the narrown ess of the market, and the problems

regarding premise s negatively af fected tax pay ments. Conver sely, the business

environment , the electronic payment of invoic es, the simplif ication of pro cedures,

the number of em ployees and the di fficulties in acce ssing finan cing enhan ce the

propensity of m anagers to pay t axes.

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

payment, taxation

RÉSUMÉ

Ce papier analyse l es détermin ants du paieme nt de la taxe communale des micr o 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 de scriptives, et une estimation d’un modè le Probit, l’étude

met en exergue le s variables qui influ encent à la fois p ositivement et néga tivement

le payement des impôts. Il ressor t que la perception du taux éle vé de la taxe, le fait

que le propriétaire de l’unité de produc tion informelle soit ivoirien, l’étroite sse du

marché, et les problèmes liés au l ocaux, ont négat ivement aff ecté le paieme nt 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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84 AFRICAN 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 simplific ation des proc édures, le nombre d es employés et le s difficultés d’accès au

finance ment renforcent la propensio n des gérants à paye r les taxes.

Mots-clé s : micro, petites entreprises, déte rminants, informel, communa l/

municipal, payeme nt et imposition

RESUMO

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

por parte de mic ro e pequenas e mpresas infor mais na Costa do Ma rfim. Os d ados

utilizados referem-se a 276 unidades de produçã o informais in quiridas no â mbito

do projecto CAPEC/IDRC. Utilizando estatí stica descr itiva e uma estimativa

com base no modelo P robit, o estudo dest aca as variáveis que inf luenci am tanto

negativa como positi vamente o pagame nto de impostos. Verifi cou-se que a perc epção

do elevado nível de imp ostos, o facto de o gestor d a unidade de produç ão informal

ser marf inense, a exiguid ade do mercado, e os probl emas relativos à s instalaçõ es

afectaram nega tivamente o pagam ento de impostos. Em co ntrapartida s, o ambiente

empresaria l, o pagamento electrónico de fac turas, a simplif icação de pro cedimentos,

o número de empre gados e as dific uldades de ace sso ao finan ciamento aumentam a

propensão dos gestores em pagar imp ostos.

Palavra s-chave: micro, pequenas e mpresas, deter minantes, infor mal,

municipal, paga mento, impostos

I INTRODUCTION

In an economic context marked by the persistence of the in formal

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

develop modern sma ll- and med ium-sized enterprises (SMEs) capable

of generating added value and contributing to state ta x 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 reduct ion (Essama-Nssah, 2002).

However, reforms in business registration and t axation that can

be carried out to better adapt regulatory requirements to the need s

and characteristics of very small enterpr ises, including self-employed

workers, have not achieved the goals of business forma lisation in

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

Directorate General of Taxes reveal that about 60 per cent of informa l

enterprises are subject to synthetic ta xes, while their contribution

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

In addition, on ly 3.5 per cent of informal activities a re known to

municipa l serv ices (AGEPE, 2012).

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