Anna Kochanova, Cardiff University

"Mobile Technologies and Firm Formalization: Evidence from Uganda"

Abstract

Mobile technologies generate a broad range of economic benefits, but whether they affect the state's capacity to collect taxes remains unclear. Using a staggered expansion of the 3G and 4G mobile networks and administrative tax data in Uganda we assess how these technologies affect firm formalization and corporate and value added tax payments in a low-income country. We document a robust increase in the number of firms reporting to the tax authority and a broadening tax base triggered by the expansion of mobile technologies. However, the reported balance sheets do not show improvements in the aggregate performance of already existing formal firms.

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