Analysis of Tax Performance in Botswana: Tax effort index approach

Johane Moilwa Motsatsi ()
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Johane Moilwa Motsatsi: Botswana Institute for Development Policy Analysis

No 52, Working Papers from Botswana Institute for Development Policy Analysis

Abstract: This study estimates the impacts of different economic sectors and other determinants on tax revenue in Botswana using Two Stage Least Squares (TSLS) estimation procedure and quarterly data for the period 1994/95 (1)-2013/14 (4). The study further assesses whether Botswana has been using its average taxable capacity to an optimal level using a Tax Effort Index (TEI) approach. The results obtained suggest that the elasticities of tax revenue with respect to mineral sector, trade sector, manufacturing sector, GDP per capita and outstanding debt are positive, while that with respect to total grants is negative. However, the agricultural sector has had no impact on tax revenue collections. Therefore, policies aimed at expanding economic sectors which are positively related to tax revenue would lead to increased tax collections. Another approach for increasing tax collection is to capacitate tax collectors, so as to improve their skills and necessary infrastructure for tax collection.

Keywords: Botswana; Tax performance; Tax effort index (search for similar items in EconPapers)
Pages: 24
Date: 2018-03
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Citations: View citations in EconPapers (3)

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