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Tax Revenue Instability in sub-Saharan Africa: Consequences and Remedies

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Abstract

This paper focuses on the sources and consequences of the instability of tax revenue in Sub-Saharan African countries. We took advantage of a unique and extraordinarily rich dataset on the composition of tax revenues for a large number of countries. Using panel data for 37 countries observed over the period 1980-2005, our results are twofold. First, the instability of government tax revenue leads to the instability of both public investment and government consumption, and also reduces the level of public investment. Second, the reliance on domestic indirect taxation-based systems appears to have a robust stabilising effect.

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  • Ebeke, C. & Ehrhart, H., 2013. "Tax Revenue Instability in sub-Saharan Africa: Consequences and Remedies," Working papers 418, Banque de France.
    • Handle: RePEc:bfr:banfra:418
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    More about this item

    Keywords

    Tax instability; tax composition; public spending; Sub-Saharan Africa.;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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