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Assessing the impact of tax administration reforms in Sub-Saharan Africa

Mavungu, Marina Ngoma and Krsic, Nikolina (2017): Assessing the impact of tax administration reforms in Sub-Saharan Africa.

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Abstract

This proposal investigates the impact of adopting tax reforms such as the Value Added Tax (VAT), the Large Taxpayers Unit (LTU), and the Semi-Autonomous Revenue Agency (SARA) on tax revenue performance revenues in Sub-Saharan Africa. Despite the increasing adoption of these reforms, the literature on tax reforms effectiveness in Sub-Saharan is controversial. This proposal adds to the debate by using an Ordinary Least Square Fixed effect model controlling for countries and years fixed effects as well as a set of relevant covariates. We use a panel dataset of 46 countries from 1980 to 2013 and show that, in contrast to existing findings, there is no robust evidence that the three tax reforms increased tax collection performance in Sub-Saharan Africa. We find that controlling for time fixed effects and relevant covariates removes the statistical significance of all the tax reforms. Therefore, we conclude that there is little statistical robustness to support a significance of these reforms on tax collection in Sub-Saharan Africa.

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