Estimating Ghana's Tax Capacity and Effort
Date
2019-11-03
Authors
Brafu-Insaidoo, William Gabriel
. Obeng, Camara K
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
The main objective of the study is to estimate and analyze Ghana’s tax potential
and effort and to determine how much more tax the country could generate
based on its desired expenditure needs. To achieve this objective, a stochastic
tax frontier model has been analyzed using annual secondary data, covering
the period 1985 to 2014. The analyses indicate that an increase in the taxable
base and institutional improvements help to increase Ghana’s optimum tax
potential. The study also reveals that political institutional improvement reduces
inefficiency in Ghana’s tax system. In addition, the study finds that Ghana has
enough of a tax gap to be exploited to meet its rising expenditure needs.