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- Title
Analysis of tax effort in WAEMU: How important are institutional/administrative reforms?
- Authors
Diabate, Nahousé; Koffi, Mounoufié V.
- Abstract
This paper examines, in depth, the hypotheses explaining the tax effort of seven West African Economic and Monetary Union (WAEMU) countries over the period 1996–2018. The studies of Karakaplan and Kutlu were applied to the stochastic tax frontier model. This provides a new method for analyzing tax effort that solves potential endogeneity problems, especially those of income. This study confirms the positive impact of income, trade openness, urbanization, government capital spending and anticorruption on tax revenue mobilization, while the size of the agricultural sector has a negative impact on tax revenue. On the other hand, reforms of tax institutions have no effect on tax effort. The average tax revenue of the countries of the WAEMU is 11.34 and the average tax effort is estimated at 0.7901 over the period 1996–2018. Thus, these countries could achieve a tax revenue to GDP ratio of 13.72% if they fully exploit their potential.
- Subjects
ADMINISTRATIVE reform; INTERNAL revenue; PUBLIC spending; CONSUMPTION tax; MONETARY unions; TAX reform; ENDOGENEITY (Econometrics)
- Publication
African Development Review / Revue Africaine de Développement, 2023, Vol 35, Issue 1, p1
- ISSN
1017-6772
- Publication type
Article
- DOI
10.1111/1467-8268.12680