EconPapers    
Economics at your fingertips  
 

Tax Buoyancy in Sub-Saharan Africa and its Determinants

Sanjeev Gupta (), Joao Jalles () and Jianhong Liu ()
Additional contact information
Sanjeev Gupta: Center for Global Development
Jianhong Liu: Center for Global Development

International Tax and Public Finance, 2022, vol. 29, issue 4, No 4, 890-921

Abstract: Abstract In this paper, we estimate short- and long-term tax buoyancy for 44 sub-Saharan African (SSA) countries during 1980–2017 using time series and panel techniques. We find that the long-term tax buoyancy is either one or slightly above one for most SSA countries. Fragile states have a lower short-term tax buoyancy reflecting their institutional weaknesses. Short-term buoyancy of personal income tax is significantly less than one. Both short- and long-run tax responses are lower than those reported in previous cross-country studies, which can be interpreted as a reduced power of both automatic stabilization in the short run and fiscal sustainability in the long run. We find that central government debt and shadow economy exert a downward pressure on tax buoyancy. An important implication of these results is that the current tax systems in SSA would not be able to generate domestic revenues to the extent needed for financing the Sustainable Development Goals (SDGs).

Keywords: Tax buoyancy; Sustainable Development Goals; Error Correction Model; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: E62 H20 H24 H25 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10797-021-09694-x Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:itaxpf:v:29:y:2022:i:4:d:10.1007_s10797-021-09694-x

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

DOI: 10.1007/s10797-021-09694-x

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-09-26
Handle: RePEc:kap:itaxpf:v:29:y:2022:i:4:d:10.1007_s10797-021-09694-x