Analysis of Tax Compliance Determinants and Property Owners Socio-Economic Profile in Benin

Abstract

Implementing efficient tax policy remains a central concern to leaders. Consequently, this article seeks to analyse the determinants of property tax compliance in Benin to ultimately establish the socio-economic profile of property owners. To achieve this, the article first regresses the partial proportional odds model to identify conditional and inf luential factors to taxpayers’ compliance. This is followed by an exploratory multiple component analysis to build a property tax compliance index to establish a socio-economic profile of property owners. The results from a representative sample of 4 575 individuals have shown that in the presence of factors that measure political and social inf luences, the probability that a taxpayer has good tax morale is estimated at 71,978 per cent. The property tax compliance index value sits at 3,076, confirming that Beninese property owners are mostly non-compliant. It was deduced from these results that the typical Beninese taxpayer is a “social taxpayer” strongly inf luenced by social norms. To improve the level of property tax compliance, the tax administrations of developing countries in general and that of Benin in particular, must implement a tax policy based on taxpayers’ profiles. Further studies on the determination of the optimal property tax rate are essential in order to quantitatively assess the extent to which mobilisation performance can be enhanced by taking taxpayers’ profiles into consideration.