COMPARATIVE ANALYSIS OF THE EFFECTS OF TAX REVENUE ON ECONOMIC PERFORMANCE OF WEST AFRICAN COMMONWEALTH COUNTRIES

COMPARATIVE ANALYSIS OF
THE EFFECTS OF TAX REVENUE
ON ECONOMIC PERFORMANCE
OF WEST AFRICAN
COMMONWEALTH COUNTRIES
Silvia Nwakaego Onyekachi& John
Uzoma Ihendinihu
Department of Accounting,
College of Management Sciences
Michael Okpara University of Agriculture,
Umudike,
onyekachi.silvia@mouau.edu.ng and
ihendinihu.john@gmail.com
ABSTRACT
The study compares the effects of tax
revenue on economic performance of West
African Commonwealth countries. The
objective is to evaluate the relative influence
of direct and indirect tax revenues on Gross
Domestic Product (GDP) growth rate and per
capital income of four selected West African
countries in the region. Time series data on
GDP growth rate, per capital income, direct
and indirect tax revenues were collected from
the websites of International Centre for Tax
and Development, and the World Bank for a
period of 39 years (1980 to 2018). Ordinary
Least Squares (OLS) technique was used inBook of Abstract
evaluating the country-by-country and
aggregate effects of tax revenue on the
chosen economic performance indicators.
Comparative results indicate that Direct and
Indirect tax revenues have significant effects
on GDP growth rates in Ghana and Nigeria,
while their effects in Gambia and Sierra Leone
were not significant. The results also indicate
that the effect of the two major components
of tax revenue on per capital income in each
of the four countries were statistically
significant. On the aggregate, the findings
provide evidence for a conclusion that direct
and indirect tax revenues significantly
influence economic performance of West
African Commonwealth countries The paper
therefore recommends strategies which
Commonwealth West African countries could
adopt to further strengthen their tax
administrative machineries for sustainable
growths in both GDP and per capital income.
Keywords: Direct and Indirect tax revenue,
economic performance, GDP growth rate, per
capital income, tax administration machinery

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