Can The Payment Of The Synthetic Professional Tax By Mobile Money Improve The Tax Compliance Of Micro And Small Enterprises In Benin? A Randomized Control Trial Approach

Despite reforms to simplify taxation for micro and small enterprises (MSEs) in Benin, such as the creation of a Synthetic Professional Tax, compliance and revenue mobilization remain low. Many MSEs cite high transaction costs and limited access to tax offices as barriers. This project evaluates whether mobile money and digital messaging can address these challenges. Through a randomized pilot in Cotonou, researchers will test the impact of SMS reminders and mobile money payments, both with and without user training, on MSEs’ tax compliance. The study aims to generate evidence on the barriers to digital tax adoption and the conditions under which mobile payments can improve formalization and public revenue. Findings from the pilot will inform the design of a full-scale randomized evaluation and offer practical policy insights for Benin and other countries seeking to digitize tax collection in the informal sector.