Effect of structural transformation on tax revenue mobilisation in sub-Saharan African countries
DOI:
https://doi.org/10.18559/rielf.2025.2.3000Keywords:
tax revenues, structural transformation, sub-Saharan Africa, Generalised Moment Methods, agriculture, industry, servicesAbstract
Purpose: The objective of this study is to estimate the effect of structural transformation on tax revenue mobilisation in 33 sub-Saharan African countries over the period 2000–2018.
Design/methodology/approach: The analysis is based on the estimation of a Generalised Method of Moments (GMM) model.
Findings: The results show that structural transformation positively and significantly affects tax revenue mobilisation. Furthermore, the positive effect of structural transformation on tax revenue mobilisation is channeled through GDP per capita, trade openness, institutional capacity and the industrial and service sectors. In the case of sectors, our results show that the effect of structural transformation on tax revenues is greater via the industrial channel than the services channel.
Originality/value: So, to better mobilise tax revenues, sub-Saharan African countries need to work towards a genuine structural transformation that promotes industrialisation, favours the development of services, improves incomes and strengthens institutional capacities.
JEL Classification
General (H20)
General (H30)
Macroeconomic Analyses of Economic Development (O11)
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