‘Render unto Caesar the things that are Caesar’s and unto God the things that are God’s’? Making sense of tax non-compliance among small business owners in Addis Ababa, Ethiopia

Abstract

ABSTRACT Taxation practices are embedded in a complex web of institutional and social factors, norms and values, some of which encourage, some of which depress tax compliance. Rather than simply constituting a revenue generating practice, taxation also represents a powerful tool to govern citizens. Studying the everyday practices of paying taxes means analysing how tax rules are applied, respected, contested and subverted in real life. Contributing to a growing canon on the social practices of taxation, this article asks: How do small- and medium-sized business owners navigate their relationship with tax authorities and attempt to make sense of their compliance and non-compliance? Through an in-depth study of the everyday practices of taxpaying in Ethiopia’s capital Addis Ababa using interviews with business owners, this article demonstrates that taxpayers apply two different forms of reasoning to describe their taxation practices, a business logic and an emotional response. Taxation practices are governed by the double aim of reducing the financial, as well as the emotional burden associated with paying taxes.