Chapter 4 | Page 158 revenue imperative.82 This requires increased effort on the part of the government to develop the tax system. Enhancing tax compliance is another important challenge. In many developed countries, tax systems are based on taxpayer-active frameworks in which the vast majority of taxpayers comply with their tax obligations without direct intervention or enforcement from the tax administration authorities.83 Cultural and institutional structures in many poor countries, however, are not strong enough to achieve this form of compliance. Hence, by investing in strengthening these areas through tax design, institutional capacity and awareness-building can play a crucial role in improving compliance. Recommendations offered by tax scholars and international financial institutions to strengthen tax compliance in developing countries include the use of withholding taxes and advanced collection schemes to encourage and ‘tilt the balance’ towards more compliance.84 Some authors identify entities that fail to comply with tax regimes as ‘ghosts’ (unregistered for tax or remain unknown to the authorities) or ‘icebergs’ (registered but underpaying). To address these issues, the tax regime must identify and register taxpayers more effectively, conduct audits and ensure enforcement.85 4.3.1.3 Fiscal management capacity Fiscal policy tools can shift the level of aggregate demand, especially when the economy’s resources are under-utilised. It can also be argued that stronger fiscal policies help to extend the capital stock of the economy,86 which is essential not only for enhancing State resources, but also for creating an 82 Deborah A Bräutigam, 'Introduction: Taxatio and State-Building in Development Countries' in Deborah A Bräutigam, Odd-Helge Fjeldstad and Mick Moore (eds), Taxation and StateBuilding in Developing Countries (Cambridge University Press, Cambridge, 2008) 1, 1. 83 John L Mikesell and Liucija Birskyte, 'Lessons of Tax Compliance Research for Lawmakers and Tax Administrators: Getting Best Returns from Limited Resources' in Howard A Frank (ed), Public Financial Management (Taylor & Francis, London, 2006) 207, 207. 84 Keen, above n 13. 85 Ibid., 16. 86 Philip Arestis and Malcolm Sawyer, Re-examining Monetary and Fiscal Policy for the 21st Century (Edward Elgar, Cheltenham, 2004), 130.