Investigating the dynamics of tax evasion and revenue leakage in somali customs

This study aims to investigate the dynamics of tax evasion and revenue leakage in the
Somali customs framework, providing insights into the systemic opportunity structures, tax
governance deficiencies, and personal incentive structures that facilitate these practices. By
applying agency theory and rent-seeking theory, this research seeks to deepen the understanding of the complex relationship between individual motivations and systemic vulnerabilities in exacerbating corruption and tax evasion in a post-conflict governance context. By
employing structural equation modeling (SEM) within the ADANCO-SEM analysis framework, this study analyzes primary survey data. This approach allows for a comprehensive
examination of the relationships between systemic, governance, and personal factors contributing to corruption and tax evasion. The findings reveal a significant positive relationship
between systemic opportunity structures, tax governance deficiencies, and personal incentive structures and the prevalence of tax evasion and corruption. Specifically, systemic
opportunity structures were found to significantly influence both tax governance deficiencies
and personal incentive structures, highlighting the intertwined nature of these factors in facilitating corrupt practices and tax evasion in Somali customs. This study underscores the
urgent need for comprehensive reforms targeting systemic vulnerabilities, enhancing tax
governance frameworks, and aligning personal incentives with the public interest. Practical
applications include the adoption of advanced technological solutions for improved monitoring and transparency, as well as the development of targeted training programs for customs
officials to foster ethical standards and compliance. This research contributes to the existing
body of knowledge by providing a unique empirical examination of corruption and tax evasion in the context of Somali customs, a largely underexplored area in the literature. By integrating agency theory and rent-seeking theory, this study offers novel insights into the
mechanisms of corruption and tax evasion, highlighting the importance of addressing both
systemic and individual factors in combating these issues.