Examen de l'optimalité de la performance fiscale dans les pays en développement : le cas de l’UEMOA

AMEDANOU, Yawovi M. Isaac (2018): Examen de l'optimalité de la performance fiscale dans les pays en développement : le cas de l’UEMOA.

Abstract

This article highlights the existence of a non-linear relationship between the tax rate and economic growth in the West African Economic and Monetary Union (WAEMU) and determines the threshold at which a high economic activities would result in negative externalities. Using a Scully optimization model, and an alternative quadratic model, and using data covering the period from 1980 to 2016, this study confirms the existence of non-linear effects of taxation on growth and suggests that the tax burden rate that would maximize economic growth in the WAEMU is 21.04% and 23.8% of GDP, respectively. We also estimate the optimal tax burden for the ECOWAS countries - a wider regional economic integration zone to which all WAEMU member countries belong - and we find that the optimal tax rate is 21.5% and 24.2%. Therefore, we retain that the optimal tax pressure rate for WAEMU countries is 24% of GDP. Our results highlight the inability of WAEMU countries to mobilize tax revenues up to the required tax threshold. Based on the results and analyzes, this study recommends taking measures focused on the modernization of tax administrations, such as the introduction of anti-fraud and tax evasion measures, as well as the promotion of fiscal citizenship.

• Item Type: MPRA Paper
• English Title: Review of the optimality of tax performance in developing countries: evidence from WAEMU
• Language: French
• Keywords: Optimal taxation, government spending, economic growth
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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