How are data-driven policies transforming tax compliance in the Global South?

This blog documents a five-day learning and engagement event held at the World Bank Group Office in Rome from December 1 to 5, bringing together officials from the Ghana Revenue Authority, the World Bank Group, and Italian institutions. 

In early December, experts and policymakers gathered at the World Bank Group’s Rome Office to explore one powerful idea: how can data-driven risk analysis transform tax compliance and enforcement strategies in the Global South?

The five-day event, co-organized by the World Bank Data Academy, the Institute for Economic Development, the Development Economics Research Group, and the Center for Development Data, welcomed a delegation from the Ghana Revenue Authority (GRA) for an intensive set of sessions. The goal? To learn, share, and design strategies that make tax systems smarter, fairer, and more effective.

Why data matters for tax reform

Tax systems are the backbone of development. Yet, in many countries, enforcement still relies on perception rather than evidence. This visit highlighted how data systems — from tax records to compliance indicators — can drive reforms that are grounded in facts, not assumptions.

Delegates explored how digital tools and analytics can:

• Monitor compliance in real time.
• Identify risks and gaps.
• Inform policy decisions that boost revenue without burdening taxpayers.

Global insights, local impact

The event program featured case studies and presentations from leading initiatives worldwide:
 

Lessons from South Africa: SA-TIED

Aimable Nsabimana, Senior Statistician at International Finance Corporation (IFC) presented the South Africa–Toward Inclusive Economic Development (SA‑TIED) program. By using anonymized administrative tax data, SA-TIED generated relevant research across six thematic areas, including firm dynamics, labor markets, and climate and energy.  The program has produced a wealth of research, built capacity through training, and fostered collaboration between government and academia. Its ultimate mission: connect evidence with action to drive inclusive growth.

The Institute for Economic Development (IED) Growth Program

Francesca Lotti, Lead Economist & Program Manager at the World Bank, presented insights from the Growth Program, an initiative that places firms at the center of economic transformation. Building on the World Development Report 2024, the program shows that sustained growth depends on creative destruction, where innovative firms expand and resources are reallocated for greater efficiency and long-term development.

Instead of relying only on macro-level policies, the Growth Program uses firm-level diagnostics to analyze market dynamics and identify where investment, technology diffusion, and innovation are blocked. Anchored in country partnerships and capacity building, it aims to turn global insights into national reform agendas that foster job creation. Africa is the first continent-wide rollout, chosen for its readiness and needs to overcome growth barriers, create jobs, complementing initiatives like the Mattei Plan.

Insights from the Bank of Italy

With thanks to Miriam Di Battista (International Relations Directorate), Marzia Romanelli (Structural Economic Analysis Directorate); Fabrizio Borselli, Giulio Mangiafico and Alessandra Sanelli (Tax Directorate), the Bank of Italy offered practical sessions on how:

• Reducing the shadow economy requires strong institutions, digitalization, and credible enforcement;
• VAT gap analysis benefits from distinguishing policy gaps from compliance gaps, with tools such as electronic invoicing playing a critical role in fraud reduction;
• Artificial intelligence can support smarter audit selection and collection, when embedded within robust governance frameworks.

Seminar: Policy Evaluation using tax data, lessons from Italy  

Paolo Acciari, Director in Charge of Consultancy, Study and Research at the Italian Ministry of Economy and Finance, delivered a seminar on Italy’s Transition 4.0 Policy Evaluation Plan and the potential of Country-by-Country reporting data. The presentation was also an opportunity for peer learning and for exchanging ideas on how to broaden the tax base.

Modernizing compliance with DaTax

Dario Tortarolo, Economist at the World Bank, introduced the DaTax Initiative, which is helping modernize tax compliance through AI-driven risk engines. Moving from rule-based systems to intelligent analytics, DaTax focuses on fairness, transparency, and human oversight — critical for building trust in tax systems.

The session focused on modernizing tax compliance through risk-based approaches, highlighting the need for intelligent audit selection. It emphasized the importance of robust governance, transparency, and fairness in risk modeling, with AI seen as tools to support — not replace—human judgment. The discussion covered the integration of diverse data sources (internal, external, and unstructured) and the careful engineering of predictive features for effective risk assessment.

Case studies from countries like Italy, Pakistan, Argentina, and Colombia illustrated practical applications, including the use of machine learning to improve audit outcomes and the challenges of data sharing in developing countries. Special attention was given to the taxation of High-Net-Worth Individuals (HNWIs) and the use of international automatic exchange of information (CRS), with lessons on the importance of data quality, targeted communications, and continuous improvement. The overall recommendation was to start with small, well-governed pilots, validate rigorously, and scale up thoughtfully to build a fair, efficient, and transparent risk engine, as GRA is aiming to do.

These comparative experiences underscored that while contexts differ, the principles of data‑driven compliance—trust, transparency, and technology—are universal. For Ghana, benchmarking against these models provides a roadmap for strengthening its own systems.

Presentation of the report “Expanding the Frontier of Taxation: Technology, Transparency, and Trust” by Dario Tortarolo

Most of the Emerging Markets and Developing Economies (EMDEs) face significant challenges: their tax systems are often inadequate, inefficient, and inequitable, with stagnant tax-to-GDP ratios and rising fiscal deficits. Also, corporate income tax structures are inefficient, and fiscal systems do little to reduce poverty or promote fairness. Many EMDEs operate below their potential, held back by weak rule of law and limited administrative capacity, but improvements in technology, transparency, and trust can help.

Digital tools and better data sharing are enabling progress, but rebuilding trust between citizens and governments remains crucial. The report highlights the need for fairer, simpler international tax rules, especially for taxing multinational enterprises and high-net-worth individuals, and stresses that with the right mix of technology, transparency, and political will, EMDEs can simultaneously improve revenue, equity, and efficiency.

Key themes and takeaways

Across sessions, five messages stood out:

1.      Data is a catalyst: Administrative and survey data enable smarter policies and better monitoring.

2.      Evidence beats perception: Data-driven strategies improve voluntary compliance.

3.      Digitalization builds trust: Simplified processes and transparency strengthen taxpayer confidence.

4.      Risk-based auditing works: Algorithms make enforcement fairer and more efficient.

5.      Collaboration is essential: Partnerships—like those with the Bank of Italy and World Bank initiatives — accelerate learning and reform.

What this means for the GRA

For the GRA, this was more than a learning event — it was a roadmap to lay the foundation for continued collaboration with the World Bank Group, and its partners, ensuring that Ghana remains at the forefront of data‑driven fiscal innovation in the Global South.

“The insights, shared experiences, and practical approaches presented on the use of tax administrative data for taxation have been very valuable, particularly its application to risk-based tax audits, which was at the heart of this engagement. The sessions, ranging from the overview of IED’s work through to the presentation on Transparency, Technology, and Trust, were both engaging and highly informative. These are important takeaways for us and have been incorporated into our ongoing implementation of reflections,” said Ezekiel Ferguson Arthur, Data Mining and Analytics Engineer at the Ghana Revenue Authority.

As Ghana looks ahead, the lessons shared in Rome will serve as a catalyst for turning data into decisions that drive compliance, trust, and development.

By benchmarking against global best practices, Ghana can modernize its tax administration, enhance enforcement, and improve taxpayer services. The result? A system that is practical, scalable, and tailored to Ghana’s unique context.

Looking ahead

As the Global South navigates economic challenges, data-driven tax policies offer a powerful tool for progress. They foster transparency, strengthen institutions, and unlock resources for development. The Rome study visit was a step toward that future — where decisions are informed by evidence, and trust between taxpayers and authorities is built on transparency and technology.