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Import Base and Revenue Improvement Possibilities in Tanzania

Fulgence Dominick Waryoba ()

Academic Journal of Economic Studies, 2018, vol. 4, issue 1, 21-28

Abstract: This paper analyzes buoyancy and elasticity estimates of different tax items on import base. Using the Divisia Index approach, the buoyancy estimates have been used to estimate elasticity estimates. The findings reveal positive buoyancy and elasticity estimates. Since the Divisia Index values are positive but less than unit, their logarithm values are negative, making the discretionary portion of the buoyancy estimate to be negative. The negative discretionary portion of the buoyancy estimates resulted into higher values of elasticity compared to buoyancy estimates. The government should broaden the tax base, reduce tax rates and reduce tax exemption in order to improve revenue collection without resorting to higher tax rates. With lower tax rates and higher penalties on tax evasion and tax avoidance, higher government revenue can be realized to meet growing government expenditure.

Keywords: Tax base; tax buoyancy; tax elasticity; Divisia index (search for similar items in EconPapers)
JEL-codes: H2 H21 H26 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:khe:scajes:v:4:y:2018:i:1:p:21-28