This paper studies whether the quality of tax administration has an impact on innovation. Our key hypothesis is that firms constrained by tax administration and facing tax compliance issues would have fewer resources to spend on innovation inputs such as R&D and therefore have a lower incidence of innovation outputs. We also expect smaller firms to be affected more severely by tax administration issues. To tackle this research questions, we use World Bank Enterprise Survey (WBES), which contains firm-level information over the period 2007-2019. Tax administration is measured using 5 explanatory variables including tax inspection and frequency, tax bribes, tax constraints and tax administration constraints. We study whether these variables have an impact on product and process innovation, on product novelty and R&D spending. While the research question focuses on firms across the globe, special attention would be paid to addressing issues pertaining to firms in Developing Asia.