Victor Pouliquen

Raising tax revenues remains a central challenge in low-income countries. Existing research finds most support for enforcement as an effective channel, and also typically assumes that taxpayers are known to the state. However, in many settings, credible enforcement is not feasible at scale, and the majority of taxpayers are not registered. We study how building fiscal capacity might occur in such contexts, leveraging Senegal’s first large-scale property tax base expansion program in the capital city, Dakar. Through a randomized controlled trial, 193 neighborhoods (80,000 properties) were assigned either to a treatment group, where a digitized property tax census was conducted, or a control group. The program was successful in massively expanding the tax net: there was a six-fold increase in the share of property owners receiving a tax bill, and the compliance rate increased from 9 to 24%, leading to substantial revenue gains. We develop and test a framework distinguishing extrinsic incentives, intrinsic motives, and social norms as drivers of compliance. We find that “duty-to-comply” - the sense of personal liability toward the State - and social norms play a central role, that our setting uniquely allows to highlight. Perceived enforcement and fiscal exchange are ruled out as important drivers. Our findings suggest that “big push” tax base expansion programs can be successful even when enforcement is limited.