INDIRECT TAX COMPONENTS AND ECONOMIC GROWTH OF SELECTED AFRICAN COUNTRIES: PANEL AUTOREGRESSIVE DISTRIBUTED LAG APPROACH

  • Uche Okoro Orji Abia State University
Keywords: Custom and Excise Duties, Value Added Tax, Economic Growth, Autoregressive Distributed, Lag &Quadratic Match-sum

Abstract

This study tries to assess the causal link between components of
indirect tax namely Value added tax and Custom and Excise Duties
and economic growth measured using Real Gross Domestic Product.
The study used panel data drawn from six (6) selected African
countries namely Nigeria, Ghana, South Africa, Kenya, Egypt and
Morocco from 2000 to 2018. These are countries within the African
region that has a robust economy, broad gross domestic product and
modernized business environment. Secondary data used were
generated from World Bank World Development indicator, OECD
data base on tax revenue in Africa and Central Bank of Nigeria.
Quadratic match –Sum procedure was adopted in converting the
annual data into quarterly data from E-views and the data are in their
natural logarithm. Different econometric techniques were applied in
the study while the data was analyzed by means of Autoregressive
Distributed Lag (ARDL) Model using E views 10 and Stata version 16
packages. The study revealed that custom and excise duties had a
positive and significant relationship with economic growth of selected
African countries in the long run, while there is a positive but
insignificant influence of custom and excise duties on economic growth
of these countries in the short run. Also, the findings showed that there
is no significant influence of Value added tax (VAT) on real GDP of the
selected African countries in the long run; while Value added tax
exhibited a positive though insignificant influence on real GDP in the
short run in these countries. The study recommends among others that
a conducive environment for entrepreneurship, tax incentives, and
innovation must be offered, as well as job opportunities in order to
increase these countries’ revenue bases, particularly through business
and also these countries’ government should expand, nurture and
sustain their value added tax and other tax bases in order to continue
to support positive economic growth.

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Published
2023-04-30
How to Cite
Orji, U. (2023). INDIRECT TAX COMPONENTS AND ECONOMIC GROWTH OF SELECTED AFRICAN COUNTRIES: PANEL AUTOREGRESSIVE DISTRIBUTED LAG APPROACH. J-MACC : Journal of Management and Accounting, 6(1), 68-84. https://doi.org/https://doi.org/10.52166/j-macc.v6i1.4154
Section
Articles