Can ICT enhance tax income revenue in Sub-Saharan Africa?
摘要
The study aims to examine the effects of ICT on tax revenue in Sub-Saharan Africa spanning from 2000 to 2020. Technology is widely documented to contribute in limiting tax evasion as well as contributing to increase government revenue, though, in Africa, it remains a concern, as taxes are not paid using digital instruments. The study employs the GMM strategy to control for endogeneity. The findings reveal that ICT indicators of internet penetration, fixed broadband, fixed telephone subscription and mobile cellular subscription contribute to tax revenue mobilization. After employing the income tax and taxes on goods and services, the findings indicate that internet penetration and mobile cellular subscription are the most enhancing factors of ICT on tax income. Moreover, the net effect findings indicate that trade openness, foreign direct investments, government expenditures and domestic credit to private sector investments are important transmission mechanisms through which ICT can enhance tax revenue mobilization, with natural resource rents joining the mix only after the threshold of 1.013% of GDP. The findings suggest more investments in digital infrastructures to boost tax system mobilization. We also recommend policymakers consider protecting infant industries and investing in productive investments as enhancing determinants of growth in tax revenues.