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Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies

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  • Christian Hubert Ebeke

    () (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Hélène Ehrhart

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper focuses on the sources and consequences of the instability of tax revenue in Sub-Saharan African countries. We took advantage of a unique and extraordinarily rich data set on the composition of tax revenues for a large number of countries. Using panel data for thirty-seven countries observed over the period 1980-2005, we find that our results are twofold. First, the instability of government tax revenue leads to the instability of both public investment and government consumption and also reduces the level of public investment. Second, the reliance on domestic indirect taxation-based systems appears to have a robust stabilising effect.

Suggested Citation

  • Christian Hubert Ebeke & Hélène Ehrhart, 2012. "Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies," Post-Print halshs-00667877, HAL.
  • Handle: RePEc:hal:journl:halshs-00667877
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00667877
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    Citations

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    as


    Cited by:

    1. Christian EBEKE, 2010. "Remittances, Value Added Tax and Tax Revenue in Developing Countries," Working Papers 201030, CERDI.
    2. Vitor Gaspar & Laura Jaramillo & Philippe Wingender, 2016. "Tax Capacity and Growth; Is there a Tipping Point?," IMF Working Papers 16/234, International Monetary Fund.
    3. Moore, Mick, 2014. "Revenue Reform and Statebuilding in Anglophone Africa," World Development, Elsevier, vol. 60(C), pages 99-112.
    4. Marius Ikpe & Alwell Nteegah, 2013. "Value Added Tax and price stability in Nigeria: A partial equilibrium analysis," European Journal of Government and Economics, Europa Grande, vol. 2(2), pages 137-147, December.
    5. Christian EBEKE & Hélène EHRHART, 2011. "Does VAT reduce the instability of tax revenues?," Working Papers 201124, CERDI.
    6. repec:ejn:ejefjr:v:6:y:2018:i:1:p:107-132 is not listed on IDEAS
    7. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
    8. Janet Gale Stotsky & Lisa L Kolovich & Suhaib Kebhaj, 2016. "Sub-Saharan Africa; A Survey of Gender Budgeting Efforts," IMF Working Papers 16/152, International Monetary Fund.
    9. Christian von Haldenwang & Maksym Ivanyna, 2017. "Does the political resource curse affect public finance? The vulnerability of tax revenue in resource-rich countries," WIDER Working Paper Series 007, World Institute for Development Economic Research (UNU-WIDER).
    10. Kaisa Alavuotunki & Mika Haapanen & Jukka Pirttilä, 2017. "The Consequences of the Value-Added Tax on Inequality," CESifo Working Paper Series 6318, CESifo Group Munich.
    11. Morrissey, Oliver & von Haldenwang, Christian & von Schiller, Armin & Ivanyna, Maksym & Bordon, Ingo, 2018. "Tax Revenue Performance and Vulnerability in Developing Countries," Working Papers 13998, Institute of Development Studies, International Centre for Tax and Development.
    12. Kearney, Colm, 2012. "Emerging markets research: Trends, issues and future directions," Emerging Markets Review, Elsevier, vol. 13(2), pages 159-183.
    13. Museru, Malimu & Toerien, Francois & Gossel, Sean, 2014. "The Impact of Aid and Public Investment Volatility on Economic Growth in Sub-Saharan Africa," World Development, Elsevier, vol. 57(C), pages 138-147.
    14. repec:aes:amfeco:v:46:y:2017:i:19:p:640 is not listed on IDEAS
    15. Kaisa Alavuotunki, & Jukka Pirttilä2, 2015. "The consequences of the value-added tax on inequality," WIDER Working Paper Series 111, World Institute for Development Economic Research (UNU-WIDER).
    16. repec:kap:itaxpf:v:24:y:2017:i:6:d:10.1007_s10797-016-9406-3 is not listed on IDEAS

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    Keywords

    cerdi;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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