IDEAS home Printed from https://ideas.repec.org/a/bla/afrdev/v37y2025i4ne70026.html
   My bibliography  Save this article

Tax Transition Impact on Fiscal Balance in WAEMU Countries: A Difference‐in‐Difference Approach

Author

Listed:
  • Vigninou Gammadigbe

Abstract

West African Economic and Monetary Union (WAEMU) initiated a tax transition program in 2006 to substitute trade taxes with domestic taxes. This paper assesses the impact of this tax reform on WAEMU countries' fiscal balance and total revenues, using difference‐in‐difference methods. The results showed that the tax transition effect on the structural fiscal balance is marginal. Despite the presence of hard‐to‐tax sectors such as the informal and agricultural sectors, the reform has had a positive impact on tax revenues. This effect is permanent and grows stronger over time. To enhance the effectiveness of the program, the paper suggests to modernize tax administrations in WAEMU countries, to develop digital tools for domestic revenue collection and design policies to reduce the size of the informal sector. Furthermore, for the other Regional Economic Communities and African countries, the results show that fiscal transition could be an effective tool to counter the decline in border tax revenues linked to the implementation of the African Continental Free Trade Area.

Suggested Citation

  • Vigninou Gammadigbe, 2025. "Tax Transition Impact on Fiscal Balance in WAEMU Countries: A Difference‐in‐Difference Approach," African Development Review, African Development Bank, vol. 37(4), December.
    • Handle: RePEc:bla:afrdev:v:37:y:2025:i:4:n:e70026
    DOI: 10.1111/1467-8268.70026
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-8268.70026
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-8268.70026?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:afrdev:v:37:y:2025:i:4:n:e70026. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/afdbgci.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.