Cashless Tax Systems: Voluntary vs. Mandated Digital Payments in Eswatini

<p dir="ltr">Tax payments are increasingly made digitally in low and middle income countries (LMICs), especially in Africa, where revenue mobilisation remains critical. However, there are obstacles to wider adoption, as well as limited understanding of the impacts of mandating digital tools to all taxpayers.</p><p dir="ltr">We examined these issues in Eswatini by measuring the impact of digital tax payment on tax compliance, considering both voluntary and mandated adoption, after the zero-cash-handling policy of April 2021.</p><p dir="ltr">Theoretically, digital payments can cut compliance costs, reduce bribery opportunities, and increase convenience. They create verifiable trails, improving transparency and accuracy – especially when integrated with e-filing. For administrations, they speed collection, reduce leakages, and improve monitoring via higher-quality data. Yet uptake is constrained by persistent cash use, low digital literacy, weak connectivity, and administrative barriers.</p><p dir="ltr">These reforms are directly relevant to the global digital public infrastructure (DPI) agenda, where interoperable and inclusive digital payments are recognised as a core building block alongside digital IDs and data exchange, enabling governments to deliver faster, more secure, and more integrated public services.</p><p dir="ltr">Summary of African Tax Administration Paper 43.</p>