The impact of indirect tax reform on tax revenue productivity in Tanzania: lessons from the 1985-1998 period.
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Date
1999
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Publisher
University of Dar es Salaam
Abstract
This study evaluates the impact of indirect tax reform on revenue productivity of sale tax, excise duty, import duty and total tax revenue on the basis of estimates of tax buoyancy and elasticity for the period 1985-1998. To test the hypotheses given in the study, regression analysis technique were employed in which tax revenue was regressed on GDP to estimate tax buoyancy and elasticity. Dummy Variable Technique was used to take care of discretionary changes of tax revenue. The findings made indicate that the tax reform has had significant impact on the productivity of excise and import duties. These taxes exhibited buoyancy and elasticity of more than unity each. This implies that the discretionary changes made on these taxes lead to more tax yield, and the automatic growth of these taxes was also effective in increasing revenue productivity. However, sales tax and total tax revenue revealed low revenue productivity, that is, they showed buoyancy of less than unity. In the context of tax reforms made on the indirect taxes, this study shows that change of tax rates structure of import and excise duties increased revenue productivity of such taxes. On the other hand, the reform did not increase revenue productivity of sales tax and total tax revenue at large. To improve elasticity on sales tax, the tax base for this tax must expand relative to GDP.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HJ4127.A5T34.M3)
Keywords
Taxation, Income tax, Tanzania
Citation
Manyanda, J. (1999). The impact of indirect tax reform on tax revenue productivity in Tanzania: lessons from the 1985-1998 period. Master dissertation, University of Dar es Salaam.