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Determinants of tax Revenue Performance in the East African Countries

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  • Ibrahim, Amos J.
  • Jairo, Isaya J.

Abstract

This study explores the determinants of tax revenue performance in the East African Community (EAC) partner states of Burundi, Kenya, Rwanda, Tanzania, and Uganda. Using a panel dataset that spans over 10 years (2009-2018), the study specifically investigates whether administration efficiency impacts revenue performance. The study measures administration efficiency by using three indicators; a ratio of taxpayers to staff, a ratio of revenue generated to staff, and the cost of collection as a share of total collection. The estimated results from the random effect model show that administrative efficiency exerts a positive and significant effect on revenue performance. The pooled mean group (PMG) results show that in the short run, the administration efficiency indicators have a positive impact. However, in the long run the estimated results show that these variables have a negative impact on revenue collection. The study also shows that per capita income has a positive impact when interacted with the quality of institutional variable. This implies that in a short run revenue administration should consider increasing the number of staff to serve taxpayers and strengthen the quality of institutions by ensuring fairness in tax collection.

Suggested Citation

  • Ibrahim, Amos J. & Jairo, Isaya J., 2023. "Determinants of tax Revenue Performance in the East African Countries," African Journal of Economic Review, African Journal of Economic Review, vol. 11(2), March.
    • Handle: RePEc:ags:afjecr:333991
    DOI: 10.22004/ag.econ.333991
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    References listed on IDEAS

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    1. Michael Keen & Mario Mansour, 2010. "Revenue Mobilisation in Sub-Saharan Africa: Challenges from Globalisation II - Corporate Taxation," Development Policy Review, Overseas Development Institute, vol. 28(5), pages 573-596, September.
    2. Glenn Jenkins, 1994. "Modernization Of Tax Administrations:Revenue Boards And Privatization As Instruments For Change," Development Discussion Papers 1994-01, JDI Executive Programs.
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