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The Power to Tax in Sub-Saharan Africa: LTUs, VATs, and SARAs

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  • Christian EBEKE

    ()

  • M MANSOUR
  • Grégoire ROTA-GRAZIOSI

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

Abstract

In the context of achieving the new Sustainable Development Goals, revenue mobilization is a high priority in developing countries and in Sub-Saharan Africa, where governments’ ability to tax remains limited. Using a unique revenue dataset spanning the period 1980-2010, we analyze three important tax reforms: the Large Taxpayers Unit (LTU), the Value Added Tax (VAT), and the Semi-Autonomous Revenue Agency (SARA). We propose an ex-post impact assessment of these tax reforms in SSA countries based on propensity-score matching methodology (PSM) and synthetic control method (SCM). VAT and SARA are found to have an unambiguously large and positive effect on non-resource taxes, while the impact of LTU is insignificant—LTU seems however an important precondition for the adoption of the first two reforms. We conclude also that VAT and SARA display some synergy, and their positive effects strengthen several years after their adoption.

Suggested Citation

  • Christian EBEKE & M MANSOUR & Grégoire ROTA-GRAZIOSI, 2016. "The Power to Tax in Sub-Saharan Africa: LTUs, VATs, and SARAs," Working Papers 201611, CERDI.
  • Handle: RePEc:cdi:wpaper:1816
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    Keywords

    Tax reforms; Africa; Revenue mobilization; Causality.;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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