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Fiscal revenues and macroeconomic effects : case of Burkina Faso

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  • SAWADOGO, IBRAHIM

Abstract

How to generate significant tax revenues without compromising the long-term growth potential of the economy? We address this question by estimating the lung-run relationship between, the growth, investment and tax policy. The results showed that fiscal revenues contribute positively to economic growth in the long run. A 1% increase in fiscal revenues leads to about 0.77% increase in real GDP. The impact of indirect tax revenue is more important than the direct tax revenue. In this fact, it’s very important to focus the government attention on mobilizing of resources from the indirect tax. This study indicates a 1% increase in the fiscal revenues tends to increase the investment by 0.82%. The best strategies or reform for fiscal resources mobilization in Burkina involves several critical lines, such as (i) to reduce tax exemptions, (ii) to tax optimally the informal sector, (iii) to increase the taxes for alcohol and tobacco (iv) to enhance management, governance, and human resources to support tax collection, (v) to decentralize the fiscal administration , (vi) to fight tax fraud by introducing more modern business procedures in the fiscal administration based on technologies.

Suggested Citation

  • Sawadogo, Ibrahim, 2019. "Fiscal revenues and macroeconomic effects : case of Burkina Faso," MPRA Paper 97287, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97287
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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