No food for lazy man: The struggle for corporation tax in undeveloped economies
Squeezing out corporate tax. Source: Stears Business


It is a classic case of the free-rider problem; a type of market failure that occurs when those who benefit from resources, public goods, or services that are a communal nature do not pay for them or under-pay. We (collectively referring to economists) dislike free riders because while not paying for the good, e.g. directly through fees or indirectly through taxes, they continue to access or use it. 

Companies, in this case, benefit from the infrastructure and support systems set up in a country and there are many equitable, practical, and political arguments for why they should pay tax e.g. growing inequality, the cost of doing business on the environment; and maintaining the infrastructure they need to grow. But when there is little to no infrastructure in the first place or the collection system itself is onerous, the incentive to pay tax is skewed, and you start to get

This story is only available to Premium subscribers Subscribe or sign in to finish reading

Not ready to subscribe? Register to read a selection of free stories

Abdul Abdulrahim

Abdul Abdulrahim

Read Latest

Unemployment or inflation: which should the next president prioritise?

PREMIUM - 26 MAY 2023

What does the new labour force methodology mean for foreign investment?

PREMIUM - 25 MAY 2023

Explainer: Nigeria's new unemployment methodology

PREMIUM - 24 MAY 2023

Nigeria’s underemployment is worse than its unemployment problem

PREMIUM - 23 MAY 2023

Download our mobile app for a more immersive reading experience

Scan QR code
mobile download