This paper develops an econometric technique that deals with shortcomings of existing methods for estimating the tax elasticity and the impact on revenues of discretionary tax measures. This model highlights the roles that discretionary tax measures and economic growth play in effecting the shift from the taxation of international trade to the taxation of domestic transactions. The objective of this study is twofold: first, to develop an econometric method of estimating built-in tax elasticity, and, hence, isolating the revenue impact of discretionary tax measures from that of economic growth; and second, to apply this model to selected sub-Saharan Africa countries in order to highlight the contribution of discretionary actions taken by fiscal authorities to trends of tax effort and individual tax shares during the past two decades. The structural adjustment programs of developing countries use fiscal deficit reduction as one of the policy tools for achieving real economic growth with price stability and balance of payments viability. In dealing with this deficit within such a framework, projects need to be made of the additional revenues which can be mobilized within the existing tax system as gross domestic product (GDP) grows. These projections indicate the need to activate additional means of revenue generation, particularly politically difficult discretionary tax measures.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: