Assessment of the impact of electronic fiscal devices on compliance and VAT collection in Malawi

Assessment of the impact of electronic fiscal devices on compliance and VAT collection in Malawi

by | Dec 18, 2020 | AMTJ, AMTJ 2020 I1

Assessment of the impact of electronic fiscal devices on compliance and VAT collection in Malawi

Authors: James Manuel Kenani (jkenani@mra.mw), Michael Masiya (mmasiya@ataftax.org), Mercy Samantha Njolomole (mnjolomole@mra.mw)

ISSN: 2709-8575
Affiliations: Manager-Tax Policy Analysis & Strategy, Policy Planning & Research Division, Malawi Revenue Authority; Researcher, Research Division, African Tax Administration Forum (ATAF); Manager-Research & Statistics, Policy Planning & Research Division, Malawi Revenue Authority
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 1-21
https://doi.org/10.47348/AMTJ/2021/i1a1

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Kenani, JM, Masiya, M and Njolomole, MS
Assessment of the impact of electronic fiscal devices on compliance and VAT collection in Malawi
African Multidisciplinary Tax Journal, 2021 Issue 1, p. 1-21
https://doi.org/10.47348/AMTJ/2021/i1a1

Abstract

The study examined the effectiveness of using electronic fiscal devices (EFDs) in revenue collection and compliance. The study used a quantitative approach for the analysis. Timely filing of tax returns was used as a measure of compliance whereas value-added tax (VAT) revenue collection as a percentage of gross domestic product (GDP) was employed as a measure of revenue collection performance. The data used for the analysis covered July 2005 to June 2019. A sample of 318 taxpayers was used for the analysis of the level of compliance and revenue collection. The sample included a segment of 244 taxpayers using EFDs and 74 taxpayers without EFDs all being small and medium taxpayers. The results indicated that using VAT collection has not increased revenue collection in the period under review as evidenced by a decline after the EFDs were rolled out. The study also found that the mean of growth of VAT revenues in the two periods (pre- and post-EFD implementation) does not reveal any significant difference. We found that taxpayers may be inflating purchases to reduce their tax liability and increase their VAT claims as evidenced by the significance of the change in purchases in pre- and post-EFD periods ‒ the same was evident in sales fluctuations. We further found that the sales-purchases gap is not different between the two periods. In the case of the compliance rate, the findings revealed that EFDs have not been effective in increasing compliance, as shown by a decrease in timely filing of tax returns in the post-EFD era. The study, therefore, concludes that the deployment of EFDs has not resulted in increased VAT collection and compliance during the study period. The study, therefore, recommends that the Authority should consider a system that should pair sales and purchases. Further, the Authority should endeavour to understand the reasons why more taxpayers do not submit returns on time despite having EFDs.

Assessment of the impact of electronic fiscal devices on compliance and VAT collection in Malawi

Analysis of the potential and fiscal effort of the countries of the West African Economic and Monetary Union

by | Dec 18, 2020 | AMTJ, AMTJ 2020 I1

Analysis of the potential and fiscal effort of the countries of the West African Economic and Monetary Union

Authors: Larba Issa Kobyagda (kobiss13@yahoo.fr), Kouadio Yves Arnaud Binin (binin_yves@outlook.fr)

ISSN: 2709-8575
Affiliations: Economiste, ancien Secrétaire permament du Comité de politique fiscale du Burkina Faso; Economiste
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 22-41
https://doi.org/10.47348/AMTJ/2021/i1a2

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Kobyagda, LI, Binin, KYA
Analysis of the potential and fiscal effort of the countries of the West African Economic and Monetary Union
African Multidisciplinary Tax Journal, 2021 Issue 1, p. 22-41
https://doi.org/10.47348/AMTJ/2021/i1a2

Abstract

This article aimed to analyse the fiscal potential of member countries of the West African Economic and Monetary Union Commission (WAEMU) space. This issue seems to be relevant insofar as fiscal resources are a function of the states’ budget. The method of analysis used in this paper is the stochastic frontier model of Kumbakar, Lien & Hardaker (2014) for the period 1987-2017. The results showed that the tax burden is determined by structural factors and that in most countries the tax potential can be further exploited. Similarly, the tax effort can be improved for a more visible performance in terms of resource mobilisation in the majority of countries. These results can contribute to improving the choice and decisions of the WAEMU Commission on fiscal policies.

A woman’s work is never done: fiscal policy and women’s labour supply in Malawi

by | Dec 18, 2020 | AMTJ, AMTJ 2020 I1

A woman’s work is never done: fiscal policy and women’s labour supply in Malawi

Author: Frank Kalizinje (fkalizinje@yahoo.co.uk)

ISSN: 2709-8575
Affiliations: Business Intelligence Analyst & Researcher: Malawi Revenue Authority
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 42-60
https://doi.org/10.47348/AMTJ/2021/i1a3

Abstract

The study sought to identify factors that fiscal policy can target to induce beneficial female labour force participation (FLFP) in formal wage, casual (ganyu) and agricultural labour. To achieve this, the study first used the Multinomial Logit Model on Malawi’s Second Integrated Household Survey dataset (IHS2) to predict the occupational distribution and to test for differences in the factors associated with the choice among the three labour outcomes. This helped to identify channels through which gender-responsive fiscal policies can target and enhance FLFP and in turn uplift women’s welfare. The empirical results revealed that when women are poor, residing in rural areas, not married or are heads of households and are least educated, they are more likely to supply casual and/or agricultural labour compared to formal wage labour. Therefore, to enhance women’s welfare through FLFP, gender-sensitive spending programmes should target women with such characteristics. The study further recommended increased gender-sensitive spending on farm credit and inputs, literacy education, girls’ education and public-works programmes. It further encouraged strict adherence to gender budgeting at national and local government level. To finance these proposals the study suggested introducing a levy on alcohol and tobacco the revenue of which should strictly be used to empower girls and enhance women’s labour supply.

Assessing the impact of ASYCUDA on customs revenue performance: evidence from the Liberia Revenue Authority

by | Dec 18, 2020 | AMTJ, AMTJ 2020 I1

Assessing the impact of ASYCUDA on customs revenue performance: evidence from the Liberia Revenue Authority

Authors: Genesis B Kollie (kolliegenesisb@gmail.com), Roosevelt S Prowd (rooseveltprowd@yahoo.com)

ISSN: 2709-8575
Affiliations: Department of Economics, University of Liberia.
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 61-79
https://doi.org/10.47348/AMTJ/2021/i1a4

Abstract

This study sought to explore empirically the impact of an Automated System for Customs Data (ASYCUDA) on customs revenue performance at the Liberia Revenue Authority (LRA). We used monthly time series data sourced from the LRA, the Central Bank of Liberia, and various series of the Harmonized Tariff of Liberia. The data spans from January 2015 to December 2018. We employed the bounds testing approach to the Cointegration and Error Correction Model that is established within the Autoregressive Distributed Lag framework. The results revealed that total trade (Import*Export), goods and services tax (GST) and ASYCUDA positively impact customs revenue performance in both the short and long run while export and inflation were found to negatively affect customs revenue performance in both the short and long run. In addition, an error correction term of -0.837 was found, indicating that 83.7 per cent of the deviation created by shocks in the short run will be corrected in the long run; thus, confirming the existence of a long-run relationship among the variables used. For policy purposes, these findings suggest that ASYCUDA be rolled out to other ports of entry and exit to boost the efficiency of customs revenue generation. Moreover, capacity building should be carried out to complement the effective use of ASYCUDA. We also recommend that policies to reduce inflation be prioritised.

Effects of modern communication channels on taxpayer service experience in Kenya

by | Dec 18, 2020 | AMTJ, AMTJ 2020 I1

Effects of modern communication channels on taxpayer service experience in Kenya

Author: Fredricke Bryan Okello (fredricke.okello@kra.go.ke)

ISSN: 2709-8575
Affiliations: Senior Data Analyst
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 80-93
https://doi.org/10.47348/AMTJ/2021/i1a5

Abstract

The objective of this research study was to establish the effect of modern communication channels on taxpayer service experience in Kenya. This was answered using three research questions which revolved around social media, mobile communication and web portals and how each affected taxpayer service experience. The targeted population for the survey were all taxpayers in the Nairobi region who were registered as taxpayers in the iTax system and who form part of the country’s tax base. This comprised the total population for this study. To arrive at the sample for the survey, stratified random sampling was employed. The probit regression results from the analysis of the survey data show that the factors that significantly influence taxpayer service experience in Kenya are the individual’s age, gender, level of education, use of social media, mobile communication and web portals.

Does digitalisation improve the mobilisation of tax revenues in Africa?

by | Dec 18, 2020 | AMTJ, AMTJ 2020 I1

Does digitalisation improve the mobilisation of tax revenues in Africa?

Author: Docteur Akouété Paulin Bate (batepaulin@gmail.com)

ISSN: 2709-8575
Affiliations: Office Togolais des Recettes (OTR)
Source: African Multidisciplinary Tax Journal, 2021 Issue 1, p. 94-112
https://doi.org/10.47348/AMTJ/2021/i1a6

Abstract

The objective of this paper is to examine the effect of digitalisation on tax revenue mobilisation in Africa. Using panel data from 40 selected african countries over the period 1980-2017, econometric estimates were implemented using the generalised method of moments. Our results indicated that digitisation has both a positive and significant effect on tax revenue mobilisation in Africa over the study period. They also revealed that economic activity, level of education, financial and industrial development are the channels through which digitalisation affects tax revenue mobilisation in Africa. These results urged policy makers to further promote the digitalisation of African economies for better tax revenue mobilisation. Finally, this study encourages African states to formulate policies with a focus on the factors that should lead to economic growth, human capital formation, financial and industrial development.