Loss due to Tax inefficency

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I have never figured a way to fix it but not keeping fifes. Read that depending on campaign difficult setting you can keep 3-6 fifes, with towns counting as two.  And, it gets worse the more you have until 65%. As far as I know nothing else affects it. Just refuse more fifes when it becomes a problem, or if you can give them away.
 
Tax inefficiency is the result of having too large a personal domain, kind of like in CKII where you can't own all the land by yourself.

If you are a king, keep a few towns and give the rest to your vassals.

If you are a vassal, turn down fiefs when your tax inefficiency becomes too high. Especially avoid villages.
 
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