IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i7p5891-d1109822.html
   My bibliography  Save this article

The Effect of Property Tax on Income Redistribution in Selected African Countries

Author

Listed:
  • Ireen Choga

    (School of Economics Sciences, North-West University, Mmabatho 2735, South Africa)

  • Fiyinfoluwa Giwa

    (School of Economics Sciences, North-West University, Mmabatho 2735, South Africa)

Abstract

Tax plays an important role in the redistribution of income, and property tax is no exception. One key area that income redistribution curbs is the area of income inequality, and, statistically, most African countries have a high level of income inequality due to their high Gini coefficient. This study examines the effect of property tax on income redistribution in seven Africa countries from 1990 to 2019. The variables used in the study are property tax, Gini coefficient (proxy for income redistribution), income tax, employment rate, GDP per capita growth, and corruption. The panel autoregressive distributed lag (PARDL) was employed as the econometric technique approach. The findings of the study reveal that property taxes have a positive and significant relationship with income redistribution in the long run in the seven African countries studied. This study recommends the effective administration of property tax. If property tax is effectively administered, it can fulfil its redistributive role.

Suggested Citation

  • Ireen Choga & Fiyinfoluwa Giwa, 2023. "The Effect of Property Tax on Income Redistribution in Selected African Countries," Sustainability, MDPI, vol. 15(7), pages 1-15, March.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:7:p:5891-:d:1109822
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/7/5891/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/7/5891/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jorge Martínez-Vázquez & Violeta Vulovic & Blanca Moreno Dodson, 2012. "The Impact of Tax and Expenditure Policies on Income Distribution: Evidence from a Large Panel of Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 200(1), pages 95-130, March.
    2. Ana Manero, 2017. "Income inequality within smallholder irrigation schemes in Sub-Saharan Africa," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 33(5), pages 770-787, September.
    3. Sanjeev Gupta & João Tovar Jalles, 2020. "Tax Revenue Reforms and Income Distribution in Developing Countries," Working Papers REM 2020/0137, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    4. Omesi Israel & Appah Ebimobowei, 2021. "Taxes and Income Inequality in Nigeria: Cointegration and Error Correction Mechanisms Evidence from 1980 – 2018," The Journal of Accounting and Management, Danubius University of Galati, issue 2(11), pages 14-30, August.
    5. Alfani, Guido & Tadei, Federico, 2017. "Income Inequality In Colonial Africa: Building Social Tables For Pre-Independence Central African Republic, Ivory Coast And Senegal," African Economic History Working Paper 33/2017, African Economic History Network.
    6. Samuel Adams & Edem Kwame Mensah Klobodu, 2019. "Urbanization, Economic Structure, Political Regime, and Income Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(3), pages 971-995, April.
    7. repec:eme:ijlma0:ijlma-09-2017-0214 is not listed on IDEAS
    8. Elin Halvorsen & Thor O. Thoresen, 2021. "Distributional Effects of a Wealth Tax under Lifetime‐Dynastic Income Concepts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 184-215, January.
    9. Kazuyuki Inagaki, 2010. "Income inequality and the suicide rate in Japan: Evidence from cointegration and LA-VAR," Journal of Applied Economics, Universidad del CEMA, vol. 13, pages 113-133, May.
    10. Paul Anthony Bowen & Peter J. Edwards & Keith Cattell, 2012. "Corruption in the South African construction industry: a thematic analysis of verbatim comments from survey participants," Construction Management and Economics, Taylor & Francis Journals, vol. 30(10), pages 885-901, October.
    11. Arshad Ali Bhatti & Zakia Batool & Hasnain A. Naqvi, 2015. "Fiscal Policy and Its Role in Reducing Income Inequality- A CGE Analysis for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 843-864.
    12. Yuriy Bilan & Halyna Mishchuk & Natalia Samoliuk & Halyna Yurchyk, 2020. "Impact of Income Distribution on Social and Economic Well-Being of the State," Sustainability, MDPI, vol. 12(1), pages 1-15, January.
    13. Constantine Angyridis & Brennan Scott Thompson, 2016. "Negative income taxes, inequality and poverty," Canadian Journal of Economics, Canadian Economics Association, vol. 49(3), pages 1016-1034, August.
    14. Keneck-Massil, Joseph & Nomo-Beyala, Clery & Owoundi, Ferdinand, 2021. "The corruption and income inequality puzzle: Does political power distribution matter?," Economic Modelling, Elsevier, vol. 103(C).
    15. Sheriff Folarin, 2021. "Corruption, Politics and Governance in Nigeria," Advances in African Economic, Social and Political Development, in: Rotimi Ajayi & Joseph Yinka Fashagba (ed.), Nigerian Politics, chapter 0, pages 377-394, Springer.
    16. Orsetta Causa & Anna Vindics & Oguzhan Akgun, 2018. "An empirical investigation on the drivers of income redistribution across OECD countries," OECD Economics Department Working Papers 1488, OECD Publishing.
    17. Ayoki, Milton, 2017. "The reform of the tax system in Swaziland," MPRA Paper 84739, University Library of Munich, Germany.
    18. Alvaro Aguirre, 2016. "Fiscal Policy and Civil Conflict in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 25(4), pages 614-636.
    19. Yang, Yiwen & Greaney, Theresa M., 2017. "Economic growth and income inequality in the Asia-Pacific region: A comparative study of China, Japan, South Korea, and the United States," Journal of Asian Economics, Elsevier, vol. 48(C), pages 6-22.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chu, Lan Khanh & Hoang, Dung Phuong, 2020. "How does economic complexity influence income inequality? New evidence from international data," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 44-57.
    2. Francesca Gastaldi & Paolo Liberati & Elena Pisano & Simone Tedeschi, 2014. "Progressivity-Improving VAT Reforms in Italy," Working papers 6, Società Italiana di Economia Pubblica.
    3. Ionuț Jianu & Marin Dinu & Dragoș Huru & Alexandru Bodislav, 2021. "Examining the Relationship between Income Inequality and Growth from the Perspective of EU Member States’ Stage of Development," Sustainability, MDPI, vol. 13(9), pages 1-16, May.
    4. Franzini, Maurizio & Raitano, Michele, 2019. "Earnings inequality and workers’ skills in Italy," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 215-224.
    5. Ibrahim Mohamed Ali Ali & Imed Attiaoui & Rabeh Khalfaoui & Aviral Kumar Tiwari, 2022. "The Effect of Urbanization and Industrialization on Income Inequality: An Analysis Based on the Method of Moments Quantile Regression," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 29-50, May.
    6. Cong Minh Huynh & Nam Hoai Tran, 2023. "Financial development, income inequality, and institutional quality: A multi-dimensional analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2242128-224, June.
    7. Mengmeng Meng & Weiguo Fan & Jianchang Lu & Xiaobin Dong & Hejie Wei, 2020. "Research on the Influence of Energy Utilization and Economic Development on Human Well-Being in Qinghai-Tibet Plateau," Sustainability, MDPI, vol. 13(1), pages 1-26, December.
    8. Valeria Bonis & Luca Spataro, 2018. "Optimal income taxation and migration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 867-882, August.
    9. Mitch Kunce, 2022. "The Tenuous Ecological Divorce and Unemployment Link with Suicide: A U.S. Panel Analysis 1968-2020," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 11(3), pages 1-2.
    10. Ofori, Isaac K. & Dossou, Marcel A.M. & Asongu, Simplice A. & Armah, Mark K., 2023. "Bridging Africa’s income inequality gap: How relevant is China’s outward FDI to Africa?," Economic Systems, Elsevier, vol. 47(1).
    11. Zhipeng Gao & Zhenyu Wang & Mi Zhou, 2023. "Is China’s Urbanization Inclusive?—Comparative Research Based on Machine Learning Algorithms," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    12. Ponce, Pablo & Yunga, Fernando & Larrea-Silva, Jhohana & Aguirre, Nikolay, 2023. "Spatial determinants of income inequality at the global level: The role of natural resources," Resources Policy, Elsevier, vol. 84(C).
    13. Alvaredo, Facundo & Cogneau, Denis & Piketty, Thomas, 2021. "Income inequality under colonial rule. Evidence from French Algeria, Cameroon, Tunisia, and Vietnam and comparisons with British colonies 1920–1960," Journal of Development Economics, Elsevier, vol. 152(C).
    14. Hakki HakanYilmaz & Mehmet Ali Ozyer & Serap Inci Ozyer, 2019. "Redistribution Effects of Taxes on Expenditure: The Case of Turkey (2002-2013)," Hacienda Pública Española / Review of Public Economics, IEF, vol. 230(3), pages 11-40, September.
    15. Conrad Scheibe, 2016. "Fiscal Consolidations and Their Effects on Income Inequality," UCL SSEES Economics and Business working paper series 2016-4, UCL School of Slavonic and East European Studies (SSEES).
    16. Yusuf Ekrem AKBAS & Fuat LEBE, 2023. "The effect of poverty and income inequality on CO2 emission based on Environmental Kuznets Curve analysis: Empirical evidence from selected developing countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(635), S), pages 103-118, Summer.
    17. Sungik Kang & Ja-Hoon Koo, 2023. "Exploring Social Capital Level in Regions with Large and Increasing Wealth Inequality: Lesson from Seoul, South Korea," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 168(1), pages 165-183, August.
    18. Njangang, Henri & Beleck, Alim & Tadadjeu, Sosson & Kamguia, Brice, 2022. "Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis," Telecommunications Policy, Elsevier, vol. 46(2).
    19. Henri Njangang & Alim Beleck & Sosson Tadadjeu & Brice Kamguia, 2021. "Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis," Working Papers of the African Governance and Development Institute. 21/057, African Governance and Development Institute..
    20. Eiji Yamamura, 2015. "Comparison of Social Capital's Effect on Consideration of Suicide between Urban and Rural Areas," ISER Discussion Paper 0933, Institute of Social and Economic Research, Osaka University.

    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:gam:jsusta:v:15:y:2023:i:7:p:5891-:d:1109822. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.