Effect of Import Liberalization on Tariff Revenue in Ghana
Loading...
Files
Date
2008-06-01
Authors
Willi am Gabriel Brafu-Insaidoo
Camara Kwasi Obeng
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
In contributing to the ongoing debate on the impact of trade liberalization, this paper
investigates the quantitative effect of import liberalization on tariff revenue in Ghana. A
decomposition analysis was conducted to determine the relative effects of the different
features of the import policy reforms. In addition, the impact of tariff rate reductions on
tariff revenue was inferred using estimated results from the real imports equation. The
study indicates that import tariff revenue is neither buoyant nor elastic in Ghana. Even
though exchange rate depreciation over the liberalization period has increased tariff
revenue, it is offset by the revenue-reducing effect of tariff reductions over this period.
Moreover, the net effect of import liberalization in the form of reductions in the average
tariff rate has been negative. The study recommends further improvements in customs
administration and duty collection mechanisms to reduce leakage, an effective detection
of evasion, enforcement of penalties, and tax replacements as key complementing
measures.
Description
HC 800 .A1 A342
Keywords
Free Trade - Ghana , Tariff - Ghana , Ghana - Commercial Policy