Does the Quality of ICT have an Effect on Tax Revenue Collection in Africa?

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Does the Quality of ICT have an Effect on Tax Revenue Collection in Africa?

Author: Katamantou Woenagnon

ISSN: 2709-8575
Affiliations: Gestionnaire des déclarations fiscales à l’Office Togolais des Recettes (OTR)
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 187–207
https://doi.org/10.47348/AMTJ/V4/i1a10

Abstract

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 fiber optic networks, serving the entire extent of their countries to allow tax administrations use of more advanced technologies.

The Effects of Exchange Rate Dynamics on Tax Revenues Collection: Evidence from Malawi Between 1990 and 2022

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

The Effects of Exchange Rate Dynamics on Tax Revenues Collection: Evidence from Malawi Between 1990 and 2022

Author: Khumbolane George Chavula

ISSN: 2709-8575
Affiliations: Malawi Revenue Authority, Policy Planning and Research, P/Bag 247, Msonkho House
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 208–226
https://doi.org/10.47348/AMTJ/V4/i1a11

Abstract

Exchange rate dynamics play a critical role in the determination of tax revenue collection yet remain underexplored in the literature for both Malawi and other sub-Saharan countries. This study addresses this gap by examining the impact of exchange rate dynamics, including devaluation policies and changes in exchange rate regimes on tax revenue collection in Malawi. Using time series secondary data from 1990 to 2022 and employing vector autoregressive (VAR) estimation techniques, the study finds that changes in factors such as exchange rates and the exchange rate regime Granger cause variations in Malawi’s tax revenues. The findings suggest that aligning tax reforms with the recognition of foreign exchange gains or losses could enhance domestic revenue mobilisation efforts, particularly through effectively taxing external currency-denominated assets and broadening the tax base.

Budget Deficit Financing and Economic Well-Being in Benin: Testing the Ricardian Equivalence Theory

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Budget Deficit Financing and Economic Well-Being in Benin: Testing the Ricardian Equivalence Theory

Authors: Ahouidji Tanguy Agbokpanzo*, Symphorien Zogbasse†, Prince Kuessi Houssou‡, Jonhson Lazare Amèdjiko Houessou§, Alastaire Sèna Alinsato¶

ISSN: 2709-8575
Affiliations: * Université d’Abomey-Calavi (UAC), Laboratoire d’Economie Publique (LEP), † Université d’Abomey-Calavi (UAC) Laboratoire d’Economie Publique (LEP), ‡ Université d’Abomey-Calavi (UAC), Laboratoire d’Economie Publique, § Laboratoire d’Economie Publique (LEP), ¶ Université d’Abomey-Calavi (UAC), Laboratoire d’Economie Publique (LEP).
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 227–248
https://doi.org/10.47348/AMTJ/V4/i1a12

Abstract

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.

Effects of the Macroeconomic Environment, Policy and Administrative Measures on Revenue Performance: The Case of Nigeria (2010–2021)

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Effects of the Macroeconomic Environment, Policy and Administrative Measures on Revenue Performance: The Case of Nigeria (2010–2021)

Authors: Zainab Sindigawo Mohammed*, Olakunle O. Oke†, Muhammad Salisu Aminu‡, Aisha Mahmoud Hamman§, Joy Agbo Ojobo¶

ISSN: 2709-8575
Affiliations: * PhD (Sud), MA (Nig), PGDE (Nig), BA History (Nig); Federal Inland Revenue Service (FIRS), No.16, Annex 2, Sokode Crescent, Wuse Zone 5, Abuja, Nigeria, Department of Research and Statistics, † BSc, Information Systems Science; FIRS, Department of Research and Statistics; Université d’Abomey-Calavi, Benin, ‡ BSc, Economics; FIRS. Department of Research and Statistics, § PhD, MSc, MBF, BSc, CAN, ACTI; FIRS, Department of Research and Statistics, ¶ BSc, Economics; FIRS, Department of Research and Statistics
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 249–264
https://doi.org/10.47348/AMTJ/V4/i1a13

Abstract

This study examines the impact of specific macroeconomic variables on tax revenue performance in Nigeria. Utilising quarterly time series data from 2010 to 2021, sourced from various secondary references, the study employs a variance inflation factor (VIF) test to check for multicollinearity. The analysis is conducted using a multiple regression model. The findings indicate that the gross domestic product (GDP) has an insignificant positive effect on tax revenue in Nigeria. Conversely, the inflation rate and employment negatively affect tax revenue generation, although the influence of unemployment on tax revenue is statistically insignificant. The f-statistic value of the model confirms that the combination of the variables studied significantly impacts tax revenue. Therefore, the study concludes that macroeconomic variables are crucial determinants of tax revenue generation in Nigeria. It recommends that the Nigerian Revenue Authority should take measures to strengthen the relationship between GDP and tax revenue.

Does Tax Promote Industrial Development in Africa?

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Does Tax Promote Industrial Development in Africa?

Authors: Akouété Paulin Bate*, Doouda Guedikouma†

ISSN: 2709-8575
Affiliations: * Docteur en économie, Chargé de la planification stratégique à la Direction des études et de
la planification stratégique de l’Office Togolais des Recettes (OTR), † Inspecteur des impôts, Chef section de vérification à la Direction des grandes entreprises de l’Office Togolais des Recettes (OTR).
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 265–291
https://doi.org/10.47348/AMTJ/V4/i1a14

Abstract

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.

Determinants of Implicit Tax in Kaduna State, Nigeria

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Determinants of Implicit Tax in Kaduna State, Nigeria

Authors: Alhasan Usman*, Aisha Musa Bindawa†, Bilkisu Inuwa Jibril‡

ISSN: 2709-8575
Affiliations: * PhD; Federal Inland Revenue Service, Nigeria, † Federal Inland Revenue Service, Nigeria, ‡ Federal Inland Revenue Service, Nigeria,
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 292–316
https://doi.org/10.47348/AMTJ/V4/i1a15

Abstract

This paper investigates the impact of the tax compliance rate and corruption perception on implicit tax in Kaduna State, Nigeria. Data was collected through questionnaires and analysed using Endogeneity, Breusch-Pagan-Godfrey heteroskedasticity and Variance Inflation Factor tests. A Two Stage Least Square Regression Model was used to analyse the data, involving 523 questionnaires. The study found that income levels, corruption perception and public confidence in government have a significant positive impact on implicit tax in the state, and the tax compliance rate has an insignificant negative impact on implicit tax in the state. The study concluded that corruption is the main factor affecting the ability of the Kaduna State government to provide adequate public services in the state, and corruption increases the level of implicit tax. The Kaduna State government should make fighting corruption a priority, as this will help the government to save more, and to provide more public goods and services in the state.

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

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

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

Author: Carolyn Gitegi Wakuka

ISSN: 2709-8575
Affiliations: Kenya Revenue Authority
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 317–343
https://doi.org/10.47348/AMTJ/V4/i1a16

Abstract

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 (RRU) 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 per cent variation in cargo security. The results of a multiple regression analysis established that cargo tracking has a positive and significant effect on cargo security (β1=0.873, p=0.000); that cargo monitoring has a positive and significant effect cargo security (β2=0.175, p=0.015); and that real-time response has a positive and significant effect cargo security (β3=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.

Obstacles and Opportunities for Labour Dispute Resolution Using Videoconferencing Technology

by | Jun 15, 2024 | ILJ, ILJ V45 I2

Obstacles and Opportunities for Labour Dispute Resolution Using Videoconferencing Technology

Authors Nicci Whitear-Nel & Cecile de Villiers

ISSN: 2413-9874
Affiliations: Senior Lecturer, University of KwaZulu-Natal; Postdoctoral Fellow in Law, Stellenbosch University
Source: Industrial Law Journal, Volume 45 Issue 2, 2024, p. 663 – 691
https://doi.org/10.47348/ILJ/v45/i2a1

Abstract

While labour dispute resolution processes are typically conducted in person, rapid advances in technology coupled with the need for speedy, fair and accessible dispute resolution encourages the use of videoconferencing technology in such processes. This article considers the use of videoconferencing in dispute resolution processes by the Commission for Conciliation, Mediation and Arbitration (CCMA) and the Education Labour Relations Council (ELRC), a bargaining council operating in the public basic education sector. Although its use was primarily in response to the Covid-19 pandemic, the success of remote hearings has sparked a willingness to incorporate this approach permanently. We identify three advantages occasioned by the flexibility of remote processes. Firstly, hearings may be fully remote or in a hybrid format, increasing available options. Secondly, remote processes offer vulnerable witnesses greater protection and may increase the witness participation rate. Thirdly, they remove many logistical challenges associated with in-person processes and may reduce the number of postponements. Remote processes are, however, not without obstacles. We explore a number of objections to such processes, which are broadly divided into objections related to infrastructure (the digital divide, technological failures, power supply) and those related to procedural and testimonial integrity (the impact of remote processes on formality, representatives, interpreters and intermediaries, data privacy, document management and issues related to witness testimony). Although these are real obstacles to effective remote processes, we argue that the problems are not insurmountable and that remote labour dispute resolution holds benefits for both the CCMA (and bargaining councils) as well as its users.

‘Numerical Targets’ or ‘Quotas’? The Draft Employment Equity Regulations 2023 in Perspective

by | Jun 15, 2024 | ILJ, ILJ V45 I2

‘Numerical Targets’ or ‘Quotas’? The Draft Employment Equity Regulations 2023 in Perspective

Author Davy Rammila

ISSN: 2413-9874
Affiliations: Senior Lecturer, University of South Africa; LLB LLM cum laude (University of Johannesburg); LLD Candidate (University of Johannesburg)
Source: Industrial Law Journal, Volume 45 Issue 2, 2024, p. 692 – 719
https://doi.org/10.47348/ILJ/v45/i2a2

Abstract

The 2022 amendments to the Employment Equity Act (EEA) introduced s 15A which empowers the Minister of Employment and Labour to adopt regulations determining sector-specific numerical targets to be taken into account by designated employers in implementing their employment equity plans. Through these regulations, the Minister is able to influence directly the contents of employers’ affirmative action measures. Empowered thereby, the Minister published the Draft Employment Equity Regulations, 2023 that have drawn the ire of certain sections of the public who claim that the draft’s numerical targets are tantamount to quotas operating against certain racial groups. This contribution investigates the validity of the draft regulations within the framework of the EEA and the Constitution. It notes that although the regulations are poorly drafted, the numerical targets are justifiably based on regional demographics and are generally not in violation of the Act. Furthermore, it argues that the numerical targets are designed as affirmative action allocations which the Minister has designated, within each sector, to be subject to his determinations. Ultimately, it concludes that a violation of these instruments occurs only in circumstances involving ‘skilled’ occupational levels for which the Minister appears to impose targets covering all available occupations with no room for the employer’s discretion.

Rethinking Fair Processes for Dealing with Poor Conduct in the Workplace

by | Jun 15, 2024 | ILJ, ILJ V45 I2

Rethinking Fair Processes for Dealing with Poor Conduct in the Workplace

Authors Chris Todd & Nikita Reddy

ISSN: 2413-9874
Affiliations: Partner, Bowmans; Business Partner, Ninety One, formerly Senior Associate, Bowmans
Source: Industrial Law Journal, Volume 45 Issue 2, 2024, p. 720 – 738
https://doi.org/10.47348/ILJ/v45/i2a3

Abstract

Nearly three decades after the legislature enacted the 1995 Labour Relations Act with its accompanying Code of Good Practice: Dismissal, and two decades after the Labour Court made it clear, in Avril Elizabeth, that a formal enquiry is not a necessary element of fair procedure before dismissal, formal adversarial criminal justice style disciplinary processes continue to be regarded as the norm in many workplaces.
This article explores why this is so. It considers whether formal adversarial processes are fairer to employees than informal ones (it concludes that they are not). It identifies challenges with formal processes in the workplace against criteria of efficiency, authority and fairness, and revisits the basic purpose of workplace discipline and the principles that apply.
Finally it puts forward some practical suggestions on an inquisitorial investigation process for dealing with workplace discipline that the authors believe is more appropriate and fair (to both employers and employees) and is better suited to most modern workplaces. It concludes that less formal investigation and decision-making processes of this kind are more efficient for employers, preserve workplace relations, and are ultimately better for employees than their adversarial counterparts.