The Impact of Investment in Human Capital on Improving Tax Oversight

Abstract

This empirical study examines the impact of investment in human capital on improving tax oversight processes in the regional tax directorates of M'Sila, Bordj Bou Arreridj, and Djelfa provinces, Algeria. Drawing on survey data from 63 valid responses (out of 68 distributed) among inspectors and service heads, the research tests three hypotheses regarding human capital efficiency, competency selection criteria, and training mechanisms. Descriptive statistics and Wilcoxon tests reveal moderate to low perceived efficiency in human capital (mean = 2.57), leading to the rejection of the first two hypotheses. However, training mechanisms demonstrate a significant positive effect (supported hypothesis), highlighting their role as a key driver despite broader deficiencies in incentives and selection processes. The findings underscore the need for targeted investments in continuous training and professional development to enhance oversight effectiveness, reduce evasion risks, and safeguard public revenues. Recommendations include reforming recruitment, expanding mandatory training programs, and integrating digital tools. These results contribute to the Algerian literature on tax administration modernization and align with international calls for human capacity building in emerging economies.