Impact of taxation on growth in Subsaharan Africa: new evidence based on a new data set

GBATO, ANDRE (2017): Impact of taxation on growth in Subsaharan Africa: new evidence based on a new data set.

Abstract

In this study, we empirically test the impact of taxation on the long-term growth of a sample of 32 countries in sub-Saharan Africa. The results indicate a zero effect of taxation on long-term growth. Moreover, the results suggest a significant negative effect of indirect taxes and taxes on individuals in short term. Consequently, the use of taxation as an instrument of intervention is not appropriate in the region. The countries of the region could therefore increase their growth, if the design of fiscal policy rests solely on logic of fiscal neutrality.

• Item Type: MPRA Paper
• Language: English
• Keywords: Growth, Taxation, Heterogeneous panels, Cross-sectional dependence
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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