The Efficiency of VAT and the Quality of Governance
(2016) , 24 pages
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- Authors
- Abstract
- Taxation is the subject of much theoretical, empirical and policy oriented research; and it is a powerful tool for domestic resource mobilization in order to reinforce ownership of public policy and to achieve financial autonomy. Against that framework we want to test whether the level of development and the quality of governance, next to other indicators and control variables, increase the efficiency of the Value Added Tax (VAT) device. Therefore, we use a database of 154 countries, of which 41 are African, observed over a six-year period. Both our cross-sectional study and our panel data analysis show that an increased quality of governance and a higher level of development are key drivers of VAT efficiency, at least up to a threshold of development. Although the paper focuses on VAT, results are likely to hold for a larger range of taxes.
- Affiliations
Louvain School of Management Accounting & Finance
Citations
Sanna, A., & GĂ©rard, M. (2016). The Efficiency of VAT and the Quality of Governance (ATRN Working Paper 02). https://hdl.handle.net/2078.5/47439