The Taxpreneurship Model: Rethinking Tax Administration in Developing and Underdeveloped Economies through the Application of Entrepreneurship Principles

Abstract

One major basis for the conceptualization of the “taxpreneurship model” and experimenting with it, in the case of a particular State in Nigeria, is the obvious inefficiencies and trust issues observed in tax administration in the country, which many studies have equally reported as the case in most underdeveloped and developing countries. In most of these countries, less attention is paid to the issues of trust and efficiency of the processes of tax collection, with more attention concentrated on enforcing the collection of taxes. The experiences of some other sub-nationals who have positively reformed their internal revenue administration, coupled with the challenges of inadequate funding from the central (national) source, have given justification to the need to rethink the tax administration system in this particular sub-national in 2015. The study adopted some fundamental entrepreneurship principles in what is called the “taxpreneurship model”, an experience related in this paper, based mainly on participant observation of this sub-national internal revenue service. Introducing this model as the omnibus guide over the study period of four years resulted in significant growth in internally generated revenue, human capacity development, better taxpayer relationship management, stakeholders’ engagement in tax administration and general societal acceptability of their civic responsibility of tax payment as a social contract.