Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/175502 
Authors: 
Year of Publication: 
2016
Series/Report no.: 
School of Economics Discussion Papers No. 1605
Publisher: 
University of Kent, School of Economics, Canterbury
Abstract: 
Despite the advent of trade liberalisation, trade taxes still remain a huge source of tax revenues in Sub-Saharan Africa. Further trade reforms in the form of the Economic Partnership Agreements (EPAs) could, however, hinder output growth in the region if these reforms lead to a decline in total tax revenues. Motivated by this conundrum, our paper adopts panel data estimators to investigate the impact of trade liberalisation on total tax revenue across 28 Sub-Saharan African countries from 1981 to 2010. We also analysed the impact of freer trade policies on trade and domestic tax revenues. The results indicate that trade liberalisation is associated with an increase in total tax revenues. Also, the reduction of trade tariffs significantly increases and decreases domestic and trade tax revenues, respectively. In addition, greater urbanisation is associated with an increase in total tax revenues while a higher inflation rate decreases tax revenues.
Subjects: 
Trade liberalisation
Generalised method of moments
Fixed effects
Tax revenue
Sub-Saharan Africa
JEL: 
C23
F13
F14
H20
O55
Document Type: 
Working Paper

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