The Effects of Exchange Rate Dynamics on Tax Revenues Collection: Evidence from Malawi Between 1990 and 2022

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

The Effects of Exchange Rate Dynamics on Tax Revenues Collection: Evidence from Malawi Between 1990 and 2022

Author: Khumbolane George Chavula

ISSN: 2709-8575
Affiliations: Malawi Revenue Authority, Policy Planning and Research, P/Bag 247, Msonkho House
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 208–226
https://doi.org/10.47348/AMTJ/V4/i1a11

Abstract

Exchange rate dynamics play a critical role in the determination of tax revenue collection yet remain underexplored in the literature for both Malawi and other sub-Saharan countries. This study addresses this gap by examining the impact of exchange rate dynamics, including devaluation policies and changes in exchange rate regimes on tax revenue collection in Malawi. Using time series secondary data from 1990 to 2022 and employing vector autoregressive (VAR) estimation techniques, the study finds that changes in factors such as exchange rates and the exchange rate regime Granger cause variations in Malawi’s tax revenues. The findings suggest that aligning tax reforms with the recognition of foreign exchange gains or losses could enhance domestic revenue mobilisation efforts, particularly through effectively taxing external currency-denominated assets and broadening the tax base.

Budget Deficit Financing and Economic Well-Being in Benin: Testing the Ricardian Equivalence Theory

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Budget Deficit Financing and Economic Well-Being in Benin: Testing the Ricardian Equivalence Theory

Authors: Ahouidji Tanguy Agbokpanzo*, Symphorien Zogbasse†, Prince Kuessi Houssou‡, Jonhson Lazare Amèdjiko Houessou§, Alastaire Sèna Alinsato¶

ISSN: 2709-8575
Affiliations: * Université d’Abomey-Calavi (UAC), Laboratoire d’Economie Publique (LEP), † Université d’Abomey-Calavi (UAC) Laboratoire d’Economie Publique (LEP), ‡ Université d’Abomey-Calavi (UAC), Laboratoire d’Economie Publique, § Laboratoire d’Economie Publique (LEP), ¶ Université d’Abomey-Calavi (UAC), Laboratoire d’Economie Publique (LEP).
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 227–248
https://doi.org/10.47348/AMTJ/V4/i1a12

Abstract

This article examines the validity of Ricardian equivalence theory in Benin over the period 1980 to 2020. The study uses a time series with the Autoregressive Long-Lived Regressions (ARDL) model. The results show that budget deficit financing has a positive effect on household consumption in the short term, and a negative effect in the long term. On the other hand, budget deficit financing has a positive effect on gross domestic product in the short term and no significant effect in the long term. These results suggest that budget deficit financing has different short- and long-term effects on economic well-being in Benin. Consequently, policymakers should consider complementary strategies to support long-term economic growth and ensure the sustainability of fiscal policies.

Effects of the Macroeconomic Environment, Policy and Administrative Measures on Revenue Performance: The Case of Nigeria (2010–2021)

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Effects of the Macroeconomic Environment, Policy and Administrative Measures on Revenue Performance: The Case of Nigeria (2010–2021)

Authors: Zainab Sindigawo Mohammed*, Olakunle O. Oke†, Muhammad Salisu Aminu‡, Aisha Mahmoud Hamman§, Joy Agbo Ojobo¶

ISSN: 2709-8575
Affiliations: * PhD (Sud), MA (Nig), PGDE (Nig), BA History (Nig); Federal Inland Revenue Service (FIRS), No.16, Annex 2, Sokode Crescent, Wuse Zone 5, Abuja, Nigeria, Department of Research and Statistics, † BSc, Information Systems Science; FIRS, Department of Research and Statistics; Université d’Abomey-Calavi, Benin, ‡ BSc, Economics; FIRS. Department of Research and Statistics, § PhD, MSc, MBF, BSc, CAN, ACTI; FIRS, Department of Research and Statistics, ¶ BSc, Economics; FIRS, Department of Research and Statistics
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 249–264
https://doi.org/10.47348/AMTJ/V4/i1a13

Abstract

This study examines the impact of specific macroeconomic variables on tax revenue performance in Nigeria. Utilising quarterly time series data from 2010 to 2021, sourced from various secondary references, the study employs a variance inflation factor (VIF) test to check for multicollinearity. The analysis is conducted using a multiple regression model. The findings indicate that the gross domestic product (GDP) has an insignificant positive effect on tax revenue in Nigeria. Conversely, the inflation rate and employment negatively affect tax revenue generation, although the influence of unemployment on tax revenue is statistically insignificant. The f-statistic value of the model confirms that the combination of the variables studied significantly impacts tax revenue. Therefore, the study concludes that macroeconomic variables are crucial determinants of tax revenue generation in Nigeria. It recommends that the Nigerian Revenue Authority should take measures to strengthen the relationship between GDP and tax revenue.

Does Tax Promote Industrial Development in Africa?

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Does Tax Promote Industrial Development in Africa?

Authors: Akouété Paulin Bate*, Doouda Guedikouma†

ISSN: 2709-8575
Affiliations: * Docteur en économie, Chargé de la planification stratégique à la Direction des études et de
la planification stratégique de l’Office Togolais des Recettes (OTR), † Inspecteur des impôts, Chef section de vérification à la Direction des grandes entreprises de l’Office Togolais des Recettes (OTR).
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 265–291
https://doi.org/10.47348/AMTJ/V4/i1a14

Abstract

This research mainly examines the effect of taxation on industrial development in Africa using group average and aggregate group models with correlated common effects on a panel of 39 African countries over the period 1983-2020. Our results suggest that in the short term, taxation does not affect industrial development, but does affect industrial development in the long term. Thus, in the long term, a tax pressure rate lower than 33.88% would favor industrial development, on the other hand a tax pressure rate higher than 33.88% would disadvantage industrial development. It also emerges from our results that economic activity, financial development, the quality of institutions, gross fixed capital formation and foreign direct investment are the channels through which taxation affects industrial development in the long term. This study urges African states to adopt tax policies aimed at improving these channels.

Determinants of Implicit Tax in Kaduna State, Nigeria

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Determinants of Implicit Tax in Kaduna State, Nigeria

Authors: Alhasan Usman*, Aisha Musa Bindawa†, Bilkisu Inuwa Jibril‡

ISSN: 2709-8575
Affiliations: * PhD; Federal Inland Revenue Service, Nigeria, † Federal Inland Revenue Service, Nigeria, ‡ Federal Inland Revenue Service, Nigeria,
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 292–316
https://doi.org/10.47348/AMTJ/V4/i1a15

Abstract

This paper investigates the impact of the tax compliance rate and corruption perception on implicit tax in Kaduna State, Nigeria. Data was collected through questionnaires and analysed using Endogeneity, Breusch-Pagan-Godfrey heteroskedasticity and Variance Inflation Factor tests. A Two Stage Least Square Regression Model was used to analyse the data, involving 523 questionnaires. The study found that income levels, corruption perception and public confidence in government have a significant positive impact on implicit tax in the state, and the tax compliance rate has an insignificant negative impact on implicit tax in the state. The study concluded that corruption is the main factor affecting the ability of the Kaduna State government to provide adequate public services in the state, and corruption increases the level of implicit tax. The Kaduna State government should make fighting corruption a priority, as this will help the government to save more, and to provide more public goods and services in the state.