African Multidisciplinary Tax Journal

Publisher:
Juta Journals
Publication date:
2021-07-19
ISBN:
2709-8575

Description:

The African Multidisciplinary Tax Journal (AMTJ ) is an annual, applied scientific journal that is double-blind peer-reviewed. The journal publishes original high-quality research papers that use analytical, empirical and contemporary methods across the whole spectrum of taxation research. It is an initiative of the African Tax Administration Forum (ATAF), an international organisation that acts as a platform for promoting co-operation, knowledge sharing and capacity building among African revenue administrations (RAs) thereby reducing duplication of work. From its inception in 2009, when it was formally launched in Kampala, Uganda, ATAF has grown in stature and in influence. Today, ATAF is an important voice in taxation globally with its membership at 40 African tax administrations.

Issue Number

Latest documents

  • Does the Quality of ICT Have An Effect On Tax Revenue Collection In Africa?

    This article examines the effect of the quality of information and communication technologies (ICT) on tax revenue collection in Africa. Starting with a sample of 48 countries, observed over the period 1986–2017, we use a cointegration model in panel data using fully modified ordinary least squares (FMOLS) technique for the basic analysis. To check robustness, we use dynamic ordinary least squares (DOLS) and canonical cointegration regression (CCR). The results show that the quality of ICT measured in terms of its bandwidth in kilobits per second, contributes positively and significantly to the collection of tax revenues. The findings suggest that development policies should be geared towards fostering both more and better ICTs. In this sense, African states should invest massively in high-speed fibre optic networks, serving the entire extent of their countries to allow tax administrations use of more advanced technologies.

  • The Effect of Regional Electronic Cargo Tracking Systems on Cargo Safety at the Kenya Revenue Authority

    The regional electronic cargo tracking system (RECTS) was adopted by the Kenya Revenue Authority (KRA) to enhance cargo security and boost revenue collection. RECTS is aimed at addressing inefficiencies in vendor-operated electronic cargo tracking systems (ECTs) whose geo-fence routes can be manipulated, making it challenging to determine the exact location of the cargo. Their failure to send alerts on seal tampering and diversions has resulted in a substantial loss of revenue. This study sought to assess the impact of RECTS on cargo security with a focus on KRA customs operations. The study addressed the impact of RECTS cargo tracking on cargo security, the impact of RECTS cargo monitoring on cargo security, and the measurement of the impact of RECTS real-time response on cargo security at KRA. The research adopted a descriptive research design. The target population for this study was the 140 rapid response units (RRUs) and the cargo monitoring unit (CMU) staff working at the five designated RRU stations along the Northern Corridor. Stratified simple random sampling was used to select 104 KRA staff to participate in the study. The primary data was collected by means of a self-administered questionnaire provided to the staff working at the five designated stations. Secondary data was collected from the records of the Cargo Monitoring Unit on incidents of theft, tampering and damage of cargo. The data was analysed using SPSS to compute descriptive and inferential statistics. The study established that the independent variables of cargo tracking, cargo monitoring and real-time response, significantly influence the dependent variable as they account for an 82.90% variation in cargo security. The results of a multiple regression analysis established that cargo tracking has a positive and significant effect on cargo security (β 1=0.873, p=0.000); that cargo monitoring has a positive and significant effect on cargo security (β 2=0.175, p=0.015); and that real-time response has a positive and significant effect on cargo security (β 3=0.222, P=0.000). The findings of the study revealed that cargo tracking enhances the security of the cargo by deterring cases of cargo diversion and by providing the exact location of the stolen, damaged or tampered cargo, enabling the rapid response unit to locate the cargo and resolve the situation immediately. Cargo monitoring enhances cargo security by providing real-time alerts in respect of cargo seal tampering, which minimises the tampering that previously occurred during changeover of seals at border points. Additionally, real-time response enhances the security of cargo by reducing the time taken by the rapid response unit to respond to and resolve cases of theft, tampering and cargo accidents during transit.

  • Tax Instruments for the Mining Sector: Profit-Based Taxes Versus Production-Based Taxes

    The sharing of mining rents is a particular challenge for African countries. To explain the determinants of profit-based and production-based taxes, we use a panel of 22 gold-producing countries in Africa between 2000 and 2020 using the ordinary least squares (OLS) method controlled for time and country fixed effects. Our empirical results show that the road distance between the capital of the country and its relevant port is an important indicator in the choice of rent taxation instruments. The road distance between the capital of a country and its relevant port tends to reduce the average effective tax rate (AETR) through the share of profit-based taxes in AETR. Thus, countries that do not have direct access to the sea should favour production based taxes over profit-based taxes in the taxation of mining rents.

  • Taxation of E-Commerce Activities and Revenue Potential In Ghana

    Electronic commerce (e-commerce) businesses have become a common mode of transaction in Ghana. However, Ghana Revenue Authority (GRA) has struggled to assess and maximise its revenue potential due to technical challenges and the complex nature of the market. The main objective of this research was therefore to identify the entities, goods and services involved in online transactions and estimate the total monetary value and revenue potential of online transactions in Ghana. To achieve this, both qualitative and quantitative research methodologies were adopted. The study found that resident and non-resident entities constitute 19% and 81%, respectively, of those entities engaged in e-commerce activities in Ghana. Further, it was found that about 20% of students, 45% of people in formal employment, 30% of the self-employed and 5% of the unemployed are engaged in e-commerce. In addition, it appears that groceries constitute 47,5% of all goods traded online, with the rest of the goods constituting 52,5%. Again, as many as 31% of the e-commerce businesses identified in this study had not registered with GRA. Of those registered with GRA, 45% had not filed their corporate income tax (CIT) or personal income tax (PIT). Thirty-eight per cent had not filed their value added tax (VAT), 28% had not filed or paid their pay-as-you-earn (PAYE), and 72,4% of the businesses did not withhold taxes. The paper recommends creating a database for all e-commerce businesses, including those with resident and non-resident status. The estimated revenue potential for e-commerce transactions by resident persons across all types of tax is over GH₡1.39 billion.

  • The Need for A Responsive African Business Community in International Tax Cooperation

    The paper examines how the African business community can complement the efforts of the African states in international tax reforms. It argues that international tax cooperation is not exclusive to state actors; non-state actors, particularly businesses, have significant roles to play, considering their expertise in the global business environment. The noticeable absence of African businesses in public engagement with the Organisation for Economic Cooperation and Development's (OECD's) work on the tax consequences of a digital economy justifies the need to undertake this study to demonstrate how African businesses can support their home governments in demanding international tax reforms. It seeks to demonstrate to African business actors the significant role played by shadow treaty negotiators and other business actors in negotiating tax treaties that may significantly impact the African market. The paper presents three reasons why African business actors should be proactive in international tax cooperation. It also provides a practical framework for how they can engage with international tax initiatives. As a case study, the paper adopts a descriptive and analytical-qualitative approach to examine the OECD BEPS Inclusive Framework's Two-Pillar proposal to address the tax consequences of the digital economy.

  • Budget Deficit Financing and Economic Well-Being in Benin: A Verification of the Ricardian Equivalence Theory

    This article examines the validity of Ricardian equivalence theory in Benin over the period 1980 to 2020. The study uses a time series with the Autoregressive Long-Lived Regressions (ARDL) model. The results show that budget deficit financing has a positive effect on household consumption in the short term, and a negative effect in the long term. On the other hand, budget deficit financing has a positive effect on gross domestic product in the short term and no significant effect in the long term. These results suggest that budget deficit financing has different short-and long-term effects on economic well-being in Benin. Consequently, policymakers should consider complementary strategies to support long-term economic growth and ensure the sustainability of fiscal policies.

  • An Appraisal of Carbon Taxes for Alignment to Socio-Economic Realities of Africa

    Weather fluctuations are negatively impacting global growth; hence, continued calls for global carbon mitigation are being made. Research, especially in the European Union (EU), reveals that carbon pricing and emission trading systems are innovative and flexible enough to address market failures caused by externalities linked to carbon emissions. However, these countries lack proxies in Africa, and there is a research gap on how such taxes could be designed to align with Africa's socioeconomic realities. Through a literature review of open-source, but recent, studies on the subject, this paper seeks to fill this research gap, while creating a foundation for next-generation research in this area. The paper argues that, despite Africa's low carbon footprint, economic realities and prospects, the implementation of the Carbon Border Adjustment Mechanism (CBAM) by the EU (one of Africa's major trading partners) has rendered such taxes inevitable in Africa; hence, implementable policy alternatives aligned with the region's socio-economic realities are needed.

  • Does Tax Promote Industrial Development in Africa?

    This research mainly examines the effect of taxation on industrial development in Africa using group average and aggregate group models with correlated common effects on a panel of 39 African countries over the period 1983–2020. Our results suggest that in the short term, taxation does not affect industrial development, but does affect industrial development in the long term. Thus, in the long term, a tax pressure rate lower than 33,88% would favor industrial development, on the other hand a tax pressure rate higher than 33,88% would disadvantage industrial development. It also emerges from our results that economic activity, financial development, the quality of institutions, gross fixed capital formation and foreign direct investment are the channels through which taxation affects industrial development in the long term. This study urges African states to adopt tax policies aimed at improving these channels.

  • Assessing Tanzanians’ Response To the Implementation of A Mobile Money Transaction Levy

    This paper analyses the effects of the mobile money transaction levy in Tanzania. The data used in the study was obtained from the Bank of Tanzania and the Tanzania Communications Regulatory Authority. The study employs interrupted time series analysis to determine the impact of the government levy on mobile money transactions. The results show a significant decrease in the total amount transacted and the average amount per subscriber after the introduction of the levy. The results indicate that the intervention had a significant impact on the average money transacted by subscribers. The study suggests that policymakers should consider alternative revenue sources other than those which affect the government revenue negatively. Further, the government should encourage people to use mobile money to pay for goods and services to increase government revenue.

  • Dynamics of Taxation and Economic Governance: What Design for the Uemoa Zone?

    Financing development is an imperative for any system of governance. Failure in the resource mobilisation process undermines economic growth. The objective of this paper is to analyse the effect of economic governance on public contributions in UEMOA countries. The econometric estimation carried out using the generalised least squares method over the period from 2009 to 2020 shows that governance has a positive and significant effect on total tax revenue. The governments of these WAEMU countries must put in place more effective mechanisms to accelerate the collection of tax revenues while protecting vulnerable taxpayers.

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