Abstract:
This study analyzes how violent conflict influences taxation in a poor, conflict-affected country, Burkina Faso. We use a unique, large, and representative panel dataset on tax collection of firms between 2015 and 2022 and geographically match these data with indicators of violent conflict at the municipal level. We find that firms pay a lower amount of tax in areas affected by violence. We also find that both turnover and firm survival decrease in areas as they become more insecure. Our findings are an indication that conflict resolution in Burkina Faso needs to be interlinked with policy interventions towards peace and stability that help strengthen firms' possibilities to function and help them to pay more tax adding needed revenues to finance public spending.