Determinants of tax Revenue Performance in the East African Countries

Amos J. Ibrahim and Isaya J. Jairo

African Journal of Economic Review, 2023, vol. 11, issue 2

Abstract: This study explores the determinants of tax revenue performance in the East African Community (EAC) partner states of Burundi, Kenya, Rwanda, Tanzania, and Uganda. Using a panel dataset that spans over 10 years (2009-2018), the study specifically investigates whether administration efficiency impacts revenue performance. The study measures administration efficiency by using three indicators; a ratio of taxpayers to staff, a ratio of revenue generated to staff, and the cost of collection as a share of total collection. The estimated results from the random effect model show that administrative efficiency exerts a positive and significant effect on revenue performance. The pooled mean group (PMG) results show that in the short run, the administration efficiency indicators have a positive impact. However, in the long run the estimated results show that these variables have a negative impact on revenue collection. The study also shows that per capita income has a positive impact when interacted with the quality of institutional variable. This implies that in a short run revenue administration should consider increasing the number of staff to serve taxpayers and strengthen the quality of institutions by ensuring fairness in tax collection.

Keywords: Public; Economics (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:afjecr:333991

DOI: 10.22004/ag.econ.333991

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