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

27 Pages Posted: 31 Jan 2013

See all articles by Christian Ebeke

Christian Ebeke

Centre d’Etudes et de Recherches sur le Développement International, CERDI-CNRS

Helene Ehrhart

Banque de France

Date Written: January 1, 2013

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 dataset on the composition of tax revenues for a large number of countries. Using panel data for 37 countries observed over the period 1980-2005, 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.

Keywords: tax instability, tax composition, public spending, Sub-Saharan Africa

JEL Classification: H20, E32, O11

Suggested Citation

Ebeke, Christian and Ehrhart, Helene, Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies (January 1, 2013). Banque de France Working Paper No. 418, Available at SSRN: https://ssrn.com/abstract=2209211 or http://dx.doi.org/10.2139/ssrn.2209211

Christian Ebeke

Centre d’Etudes et de Recherches sur le Développement International, CERDI-CNRS ( email )

65 Boulevard Francois Mitterrand
63000 Clermont-Ferrand Cedex 1
France

Helene Ehrhart (Contact Author)

Banque de France ( email )

Paris
France

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