Taxation,Fiscal Decentralisation and Legitimacy: The Role of Semi‐Autonomous Tax Agencies in Peru

This article analyses the Servicios de Administración Tributaria (SAT), which currently operate in nine Peruvian cities, to show that semi‐autonomous tax agencies can play a significant role in strengthening the effectiveness, efficiency and legitimacy of decentralised tax systems. Its findings indicate that the SAT collect local taxes and non‐tax revenues more effectively than conventional tax administrations, and that, although the SAT model per se does not generate strong incentives for the promotion of efficiency, efficiency may become more important once the SAT are consolidated. Finally, there are hints that the Peruvian SAT contribute to the legitimacy of the tax system thanks to higher levels of transparency and client orientation.