ABSTRACT
We investigate the impact of corruption on tax compliance using a sample of 700 small business in Bamako, Mali. The main contribution of this paper is to focus on micro-enterprises (including semi-formal and informal ones), while existing works concentrate on large and formal firms. Our results show that (i) even very small firms pay taxes (two-thirds of firms pay taxes in our sample); and, (ii) paying bribes reduces significantly tax compliance. This latter finding is robust (i) to the addition of a set of control variables accounting for other determinants, (ii) to treatment for endogeneity, and (iii) the use of a different proxy for tax compliance.
Acknoweledgements
We would like to thank Abdoulaye Tounkara, Fabiana d’Andria and Leeli Ball for their assistance as well as Oumar Kaba Diakite for their useful comments. Any remaining errors are our own.
Disclosure statement
No potential conflict of interest was reported by the authors.