Nepal Center for Contemporary Research

Inception of the Project: Taxation and Livelihood, A study from Nepal

Lead organization: International Center for Taxation and Development/Secure Livelihood Research Consortium

Partners: Overseas Development Institute (ODI), Nepal Centre for Contemporary Research (NCCR)

This proposed research project will investigate the relationships between taxation and livelihoods in Nepal, with a particular focus on conflict-affected rural areas. Drawing on joint work by ICTD/SLRC the study’s analytical point of departure is that focusing exclusively on taxes administered and collected through statutory frameworks and procedures (‘formal tax’) will generate only a partial understanding of the ways in which taxation and livelihoods are connected. As such, we are taking up to widen our analytical lens to include what might be referred to as ‘informal tax’ – that is, payments and costs (e.g. in relation to labour time) which are incurred outside formal statutory arrangements, the benefits of which may be accrued by a variety of state, non-state and community actors / institutions. A similar kind of study has been conducted in Africa taking the conflict affected situation and this is an attempt to examine the situation from Nepal.
In looking to operationalize this broader conceptualisation of taxation, our study will answer three interlinked research questions which focus respectively on: the kinds of formal and informal taxes that people incur; the effects of formal and informal taxes on livelihoods and household economies;  the effects of formal and informal taxes on governance outcomes (e.g. perceptions of legitimacy).