The Impact of Taxes on Capital Formation in Tanzania

Ephraim Oswald Mdee, Jehovaness Aikaeli and Eliab Luvanda

African Journal of Economic Review, 2022, vol. 10, issue 5

Abstract: This paper investigatesthe impact of taxation on capital formation in Tanzania through application of Autoregressive distributed lag (ARDL) model, using the data sourced from National Bureau of Statistics (NBS) and Tanzania Revenue Authority (TRA) for 1966 – 2019. The results show that corporate income tax has a negative impact on capital formation in both the short-run and longrun, the exception being the magnitude. The paper recommends the need to review the taxation policies so as to attract more investment in the country in order to foster economic growth. This, among others, can be done through putting more emphasis on the implementation of the already established Blueprint for Regulatory Reforms to Improvement of Business Environment that aims at improving business environment climate in the country. Additionally, there is a need to keep encouraging more private sector participation in the economy, especially in those sectors which are not considered as a high priority sector, as well as encouraging the Public Private Partnership (PPP) initiative.

Keywords: Public; Economics (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/330380/files/2 ... 03-1-10-20221212.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:afjecr:330380

DOI: 10.22004/ag.econ.330380

Access Statistics for this article

More articles in African Journal of Economic Review from African Journal of Economic Review
Bibliographic data for series maintained by AgEcon Search ().