An event held at the World Bank Group Office in Rome from 1 to 5 December 2025 was attended by experts from the World Bank, the Ghana Revenue Authority (GRA) and some Italian institutions. The participants examined the effect of data-driven risk analysis on tax compliance and enforcement in the Global South. The participants shared strategies to make tax systems fairer and more effective.
It is increasingly recognised that tax systems are essential for boosting economic development. Improved data systems can lead to evidence-based tax risk assessment and identify gaps in compliance. Tax policy decisions based on real data can increase tax revenue without unfairly burdening taxpayers.
A presentation by participants from the Bank of Italy noted that the shadow economy can be reduced if there are strong institutions, digital technologies and strong enforcement. Tools such as electronic invoicing can reduce VAT fraud, and VAT gap analysis can be improved by distinguishing policy gaps from compliance gaps. Audit selection and tax collection can be improved with the use of AI, put to use within a strong governance framework.
A lesson from the meeting is that improved data for the tax administration can lead to improved tax policy and better monitoring of measures to ensure continued effectiveness. Strategies driven by data can improve voluntary compliance by taxpayers. The use of digital technology by the tax administration can simplify the compliance process for taxpayers, improve transparency and build trust. It also provides for more efficient risk-based auditing.
The World Bank introduced the DaTax Initiative, which supports tax administrations in the move to intelligent analytics with a focus on fairness and transparency. Tax compliance can be modernised using risk-based approaches to achieve intelligent audit selection. The use of AI tools can support, but not replace, human judgment. The discussion covered the integration of diverse data sources. Various internal and external data sources can be combined in achieving effective risk assessment. The session examined the taxation of high-net-worth individuals (HNWIs) and the use of international automatic exchange of information (CRS), emphasising the importance of data quality, targeted communications and continuous improvement. Tax authorities in developing countries, such as the GRA, can begin by introducing small pilot schemes that are then validated and scaled up to build a transparent risk analysis framework.
The countries of the global South, including Ghana, are looking for measures to improve tax compliance and collection, to enable them to increase domestic revenue and face global challenges. Data driven tax policies can unlock the domestic resources required for greater development. Evidence-based compliance and efficient risk-based auditing, with strong enforcement, can achieve the required revenue increases.
