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Assessing the impact of tax administration reforms in Sub-Saharan Africa

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We investigate the impact of adopting the Value Added Tax (VAT), the Large Taxpayers Unit (LTU), and the Semi-Autonomous Revenue Agency (SARA) reforms on tax revenue performance in Sub-Saharan Africa (SSA). Despite the increasing adoption of these reforms, the literature on their effectiveness remains controversial. Using the propensity score matching and the synthetic control methods, Ebeke et al.‘s (2016) article argues the VAT and the SARA reforms had large and positive effect on non-resource taxes in SSA, while LTU‘s impact was insignificant. However, the empirical strategy in the paper has not accounted for differential trends in tax collection performance across countries. When these trends are controlled for through a fixed effects model, the statistical significance of the tax reforms vanish. Using an extended panel dataset of 46 SSA countries from 1980 to 2013, we conclude there is little robust evidence for the effectiveness of the three tax reforms to have significantly improved revenue collection

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Nikolina Krsic et Marina Mavungu Ngoma

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