The impact of trade liberalization on tax productivity and tax system in Tanzania (1978-2003)

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University of Dar es Salaam
This study explores the implications of trade liberalization on international trade tax revenue (Customs revenue) and the Macroeconomic implications thereof in the context of the Tanzania economy. The study focuses on quantitative restrictions in the form of tariffs. The study first establishes an econometric analysis of the relationship between custom revenue and trade liberalization in Tanzania. This followed by a measure of productivity of trade tax revenue in Tanzania. The estimation results show that customs revenue is highly productive i.e. trade liberalization has a significant influence on customs revenue. The study observes that trade has a direct contribution to the national economy. The contribution of trade to total GDP has been fluctuating due to the reforms which started since 1987, this includes trade liberalization. Both foreign and local trade exclusive of increasing informal trade accounts for nearly 13 percent of total GDP. The study concludes that macroeconomic policies that support the prevailing macroeconomic environment can significantly facilitate successful trade liberalization. In this regard, the government can take advantage of the depreciation of the shillings to increase exports and thus economic growth while offsetting the reduction in trade revenue due to lower tariffs with higher import values and hence higher trade revenue due to the depreciation.
Available in printed form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HJ 2351.T34 N28)
Tax management, Tax administration and production, Tanzania
Ndunguru, E.G (2005) The impact of trade liberalization on tax productivity and tax system in Tanzania (1978-2003).Master dissertation, University of Dar es Salaam, Dar es Salaam.