The determinants of the vat potential in Benin: an econometric analysis
Author: Tidjani Ousmaïla Awe Obinti (email@example.com)
Affiliations: Economètre-Chercheur à la Direction Générale des Impôts du Bénin
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 169-188
This paper aimed to analyse the determinants of VAT potential in Benin over the period 1991 to 2017. The results of the estimation, conducted using Engle Granger’s cointegration model, showed that the latter is, on the whole, lower than the actual level of VAT collection over the period of analysis. This means that the VAT potential is relatively well developed, insofar as the tax capacity of the Beninese economy remains insufficient to mobilise more VAT revenue. However, this observation must be put into perspective as the capacity to mobilise VAT lost momentum from 2013 after a remarkable performance for over 23 years. This result calls for an improvement in tax reforms implemented in order to optimise the capacity of the tax administration in VAT mobilisation. Furthermore, the estimate showed that structural factors such as the degree of openness of the economy and the real gross domestic product per capita have had a positive and significant impact on VAT revenue mobilisation.