Article
The Effect of Tax Governance on Tax Administration Performance in the European Union: France as a Model
Tax governance has emerged as a central pillar of public financial management reform in advanced economies, encompassing transparency, accountability, digital transformation, and anti-evasion mechanisms. This study examines the quantitative effect of tax governance dimensions on tax administration performance in France over the period 1996–2025, using panel-compatible time-series data from the OECD Revenue Statistics, the OECD Tax Administration Series, IMF Fiscal Transparency Evaluations, and DGFiP Annual Performance Reports. Tax governance is operationalised through four composite sub-indices: Transparency (TRANS), Accountability (ACCT), Digital Governance (DIGI), and Anti-Evasion Capacity (ANTIEV). Performance is measured by three indicators: the Tax-to-GDP ratio (TAXGDP), the VAT Voluntary Compliance Rate (VCR), and the Cost-of-Collection Ratio (CCR). An Autoregressive Distributed Lag (ARDL) bounds-testing approach is employed to estimate long-run and short-run dynamics. Descriptive statistics reveal that France's tax-to-GDP ratio rose from 41.9% in 1996 to 46.1% in 2022, while the VAT compliance gap declined from an estimated 14% of VTTL in 1996 to 6% in 2023. ARDL estimates show statistically significant long-run effects: DIGI exerts the largest positive effect on VCR (β = 0.412, p < 0.01), while TRANS has the strongest positive effect on TAXGDP (β = 0.318, p < 0.01). The error correction coefficient is −0.287 (p < 0.01), indicating adjustment of approximately 29% per year toward long-run equilibrium. These findings provide robust empirical evidence for the governance–performance nexus and carry important policy implications for EU member states seeking to modernise their tax administrations.