Behavioral barriers to tax compliance: what the data from Lesotho tells us

Our behavioral research in Lesotho reveals that the most powerful barrier to voluntary compliance is not friction or ignorance — it is a rational calculation that compliance does not feel worthwhile.

The compliance challenge in Lesotho

Lesotho faces a compliance challenge common across Sub-Saharan Africa: a large informal economy, significant administrative constraints, and a taxpayer base that is simultaneously under-served and under-engaged. The Lesotho Revenue Authority, supported by the African Development Bank, identified that improving voluntary compliance — rather than intensifying enforcement — was both the more sustainable and the more achievable path to increasing domestic revenue mobilization.

The COM-B framework

Working alongside The Decision Lab, we applied the COM-B framework — Capability, Opportunity, Motivation, and Behavior — to structure our research. The framework asks: do taxpayers have the capability to comply? Do they have the opportunity? And are they motivated? Across 52 household surveys, 30 SME surveys, focus groups with large taxpayers, and approximately 20 structured interviews with LRA functions, we found that all three dimensions were implicated in Lesotho's compliance gap.

What the data revealed

The friction finding was striking but not surprising: individuals spent an average of 22.3 hours on tax payment activities. More revealing was the motivation data. When taxpayers were asked why they did not comply more consistently, the most frequently cited reason was not time or cost — it was perceived low benefit. Both individuals and SMEs reported that they did not see a clear connection between their tax payments and the quality of public services they received.

Supply-side constraints matter too

Our research documented a range of supply-side issues shaping the taxpayer experience: limited technology for tracking taxpayer records, inconsistent client communications, complex and bulky forms, and a perceived lack of fairness around audit selection. Trust is built through experience, not messaging, and the quality of the LRA's service experience was directly shaping taxpayer trust.

Implications for reform design

The Lesotho findings suggest that compliance interventions need to address motivation as well as friction. Communications that make the link between taxation and public value visible and credible are as important as process simplification. Effective tax reform programs in low-capacity environments do not choose between technical and behavioral interventions. They address both simultaneously.