author(s)
Paschaline Ugwo and Tolulope Aladebumoye

abstract
One of the most important aspects of the changing field of digital tax administration is the use of electronic invoicing, or "e invoicing." In order to improve tax compliance and increase transparency, governments throughout East Africa are gradually requiring e-invoicing systems. Despite these changes in regulation, there is still little empirical data on how e-invoicing impacts tax compliance, especially for small and medium-sized businesses (SMEs), especially when using rigorous causal designs. This study investigates the connection between SMEs' adoption of electronic invoicing and tax compliance in a few East African economies. Using a quasi‑experimental research design that exploits transitional or staggered roll‑outs of e‑invoicing mandates, it examines whether SMEs that adopt digital invoicing systems report more accurate tax liabilities, remit taxes more consistently, and experience fewer discrepancies in filings compared to similar SMEs without such adoption. Embedded within this investigation is the role of broader contextual factors, including infrastructural readiness, regulatory enforcement capacity, and technological literacy amongst SME operators. Evidence from related settings suggests that digitalization through e‑invoicing can increase tax compliance by lowering costs associated with compliance and enhancing data transparency; in Peru, for instance, VAT e‑invoicing was found to increase reported firm activity and compliance outcomes, especially among smaller firms where underreporting was previously more prevalent. In the East African context, early administrative reforms, such as Kenya’s Tax Invoice Management System and Uganda’s Electronic Fiscal Receipting and Invoicing System, highlight the practical urgency and policy relevance of evaluating these reforms’ impacts. By applying rigorous comparative and quasi‑experimental techniques, this study contributes to a more nuanced understanding of how digital tax instruments influence SME compliance behavior. The findings are expected to have implications for tax policymakers, SMEs navigating digital transition, and scholars interested in the intersection of taxation, technology, and economic development.