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Analysis of Tax Performance in Botswana: Tax effort index approach

Author

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  • Johane Moilwa Motsatsi

    (Botswana Institute for Development Policy Analysis)

Abstract

This study estimates the impacts of different economic sectors and other determinants on tax revenue in Botswana using Two Stage Least Squares (TSLS) estimation procedure and quarterly data for the period 1994/95 (1)-2013/14 (4). The study further assesses whether Botswana has been using its average taxable capacity to an optimal level using a Tax Effort Index (TEI) approach. The results obtained suggest that the elasticities of tax revenue with respect to mineral sector, trade sector, manufacturing sector, GDP per capita and outstanding debt are positive, while that with respect to total grants is negative. However, the agricultural sector has had no impact on tax revenue collections. Therefore, policies aimed at expanding economic sectors which are positively related to tax revenue would lead to increased tax collections. Another approach for increasing tax collection is to capacitate tax collectors, so as to improve their skills and necessary infrastructure for tax collection.

Suggested Citation

  • Johane Moilwa Motsatsi, 2018. "Analysis of Tax Performance in Botswana: Tax effort index approach," Working Papers 52, Botswana Institute for Development Policy Analysis.
    • Handle: RePEc:bid:wpaper:52
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    File URL: http://knowledge.bidpa.bw:8080/xmlui/handle/123456789/96
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    Citations

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    Cited by:

    1. Tshepiso Gaetsewe, 2020. "Characteristics of Firms in Botswana's Informal Economy," Working Papers 74, Botswana Institute for Development Policy Analysis.
    2. Tebogo B. Seleka, 2020. "Targetting Effectiveness of Social Transfer Programs in Botswana:Means-tested versus Categorical and Self-selected instruments," Working Papers 72, Botswana Institute for Development Policy Analysis.
    3. Christou Anna & Eriotis Nikolaos & Lomis Ioannis & Papadakis Spyros & Thalassinos Eleftherios, 2021. "The Greek VAT Gap: The Influence of Individual Economic Sectors," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 851-882.

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