Does the Quality of ICT have an Effect on Tax Revenue Collection in Africa?

ISSN: 2709-8575
Source: African Multidisciplinary Tax Journal, 2024 Issue 1

Abstract

This article examines the effect of the quality of information and communication technologies (ICT) on tax revenue collection in Africa. Starting with a sample of 48 countries, observed over the period 1986 – 2017, we use a cointegration model in panel data using fully modified ordinary least squares (FMOLS) technique for the basic analysis. To check robustness, we use dynamic ordinary least squares (DOLS) and canonical cointegration regression (CCR). The results show that the quality of ICT measured in terms of its bandwidth in kilobits per second, contributes positively and significantly to the collection of tax revenues. The findings suggest that development policies should be geared towards fostering both more and better ICTs. In this sense, African states should invest massively in high-speed fiber optic networks, serving the entire extent of their countries to allow tax administrations use of more advanced technologies.