Tax Elasticity, Buoyancy and Stability in Zimbabwe

19 Pages Posted: 2 Sep 2014

See all articles by Wellington Garikai Bonga

Wellington Garikai Bonga

Liverpool John Moores University

Netsai Dhoro

Great Zimbabwe University

Fungayi Mawire-Van Strien


Date Written: September 1, 2014


Tax elasticity and buoyancy estimates are the dynamic tools for measuring the tax performance. The main objectives of the study are to explore the tax system performance of Zimbabwe through the traditional tax ratio trends, dynamic measures tax buoyancy and tax elasticity. The study has applied traditional regression approach and the Dummy Variable Approach to calculate tax buoyancy. For the study period 2000-2013, both methods have yielded a tax buoyancy statistic of 1.013 (more than unitary) implying that the tax system is responsive to growth in national income. Using the Dummy Variable Approach, the study revealed that there is no significant differences in tax performance for the Zimbabwean Dollar Era and the Dollarisation Era. In an effort to enhance efficiency in government operations, the study has highlighted parastatals inefficiency that need immediate attention. Tax ratio trend has revealed an increase in effort over the dollarisation period.

Keywords: Tax Buoyancy, Elasticity, Tax Stability, Tax Ratio, Revenue Performance, Parastatal, GDP, Zimbabwe

JEL Classification: C13, D61, D63, E60, E61, E62, H20, H21, H23, H26, K34, O11, O23

Suggested Citation

Bonga, Wellington Garikai and Dhoro, Netsai and Mawire-Van Strien, Fungayi, Tax Elasticity, Buoyancy and Stability in Zimbabwe (September 1, 2014). Available at SSRN: or

Wellington Garikai Bonga (Contact Author)

Liverpool John Moores University ( email )

Netsai Dhoro

Great Zimbabwe University ( email )

Box 1235

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