An Estimation of the Taxable Capacity, Tax Effort and Tax Burden of an Emerging Economy: Evidence from Ghana

Authors

  • John Kwaku Amoh Faculty of Accountıng and Fınance, Department of Accountıng, University of Professional Studies, Accra, Ghana, West Africa.

Abstract

This paper estimates taxable capacity, tax effort and tax burden with a view to examining the tax fairness perceptions and tax system efficiency. The study employed ordinary least squares (OLS) regression and vector autoregressive (VAR) model for historical time series data sourced from the World Development Indicators (WDI) and Bank of Ghana (BoG). We found that Ghana's overall tax burden and average post-tax reform efforts are low suggesting tax fairness and tax system inefficiency respectively. We conclude that post-tax reform dispensation has not generated the much-needed tax revenues because of low tax efforts. Thus, tax revenue could be significantly maximized to aid the achievement of the sustainable development goals (SDGs) to move Ghana Beyond Aid. This paper extends literature by relying on estimates of taxable capacity, tax effort and tax burden to assess the tax fairness perceptions and tax administrative efficiency of an emerging economy. We posit that these triad terminologies move pari passu in assessing the efficiency and fairness of a country's tax system. We recommend that embarking on jurisdictional tax reforms should not only be about appropriate and a plethora of tax laws and multiplicity of taxes but also on the efficiency and integrity of tax administration. The judicious use and prompt accountability of tax revenues could help address tax unfairness perceptions in emerging economies.

Keywords: Taxable capacity, tax effort, tax burden, fairness, Ghana, tax revenue

JEL Classifications: H2, Q2, Q3

DOI: https://doi.org/10.32479/ijefi.7549

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Author Biography

John Kwaku Amoh, Faculty of Accountıng and Fınance, Department of Accountıng, University of Professional Studies, Accra, Ghana, West Africa.

John Kwaku Amoh is a Lecturer in Accounting and a Course Lead (Taxation and Computerised Accounting Information Systems) of the Department of Accounting, Faculty of Accounting and Finance of the University of Professional Studies, Accra. He is currently a representative of Department of Accounting on the Accounting and Finance Faculty Board. His teaching and research interests are focused in the areas of Taxation and Public Policy and Computerised Accounting Information Systems. John holds Master of Philosophy (MPhil) in Accounting and Bachelor of Science Administration (Accounting Option) from University of Ghana Business School in 2008 and 1999 respectively. He is currently pursuing Doctor of Philosophy (PhD) programme with Ghana Institute of Management and Public Administration (GIMPA), Ghana, a programme he has been pursuing since August 2015. He is a Chartered Accountant and was admitted into membership in 2008. Before migrating into academia, John gathered over ten years of Senior Level Managerial working experience providing complete financial management of all accounting and finance activities in a fast-paced world-class multinational company. He was appointed as a Lecturer in Accounting at University of Professional Studies Accra in January 2011. John is a learner-centred lecturer who seeks to impart knowledge, inspire and support his students toward the realisation of their respective goals. He is a calm and a highly motivated person.

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Published

2019-04-16

How to Cite

Amoh, J. K. (2019). An Estimation of the Taxable Capacity, Tax Effort and Tax Burden of an Emerging Economy: Evidence from Ghana. International Journal of Economics and Financial Issues, 9(3), 12–21. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/7549

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