Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU)

Aichatou Mourfou; Idrissa Mohamed Ouedraogo

doi:doi:10.11648/j.ajtab.20210701.12

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Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU)

Aichatou Mourfou, Idrissa Mohamed Ouedraogo

Published in American Journal of Theoretical and Applied Business (Volume 7, Issue 1)

Received: 18 January 2021 Accepted: 27 January 2021 Published: 2 February 2021

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Abstract

This research examines the effect of different types of tax revenues on income inequality in WAEMU countries over the period 1996 to 2015. Double least squares (2SLS) are used as an estimation technique to analyze the effect of these different types of tax revenues, including total tax revenues (the sum of all revenues), direct tax revenues (which include profit and income taxes), domestic indirect tax revenues (e.g., value added tax and excise duties) and commercial tax revenues (e.g., customs duties). The results show that an increase in direct tax revenues leads to a reduction in income inequality. In other words, progressive income taxation allows for an efficient redistribution of income from richer to poorer people, which contributes strongly to the reduction of income inequality. On the other hand, indirect domestic tax revenues and commercial tax revenues are found to be neutral in income distribution. In fact, WAEMU countries, in order to compensate for the fiscal losses resulting from the reduction of customs tariffs, have adopted a reform of domestic taxation focused mainly on the development of non-progressive indirect taxes, i.e., taxes governed by liberal principles of fiscal neutrality: taxation must not disrupt individual choices of resource allocation. These tax reforms thus explain the neutrality of the effects of indirect taxation in the WAEMU zone. In the light of these results, the paper suggests that WAEMU countries should strengthen the progressivity of direct taxes and always maintain the neutrality of indirect taxes.

Published in	American Journal of Theoretical and Applied Business (Volume 7, Issue 1)
DOI	10.11648/j.ajtab.20210701.12
Page(s)	8-15
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Total Fiscal Pressure, Direct Fiscal Pressure, Domestic Indirect Fiscal Pressure, Commercial Fiscal Pressure, Income Inequality, 2SLS, WAEMU

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APA Style

Aichatou Mourfou, Idrissa Mohamed Ouedraogo. (2021). Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU). American Journal of Theoretical and Applied Business, 7(1), 8-15. https://doi.org/10.11648/j.ajtab.20210701.12

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ACS Style

Aichatou Mourfou; Idrissa Mohamed Ouedraogo. Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU). Am. J. Theor. Appl. Bus. 2021, 7(1), 8-15. doi: 10.11648/j.ajtab.20210701.12

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AMA Style

Aichatou Mourfou, Idrissa Mohamed Ouedraogo. Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU). Am J Theor Appl Bus. 2021;7(1):8-15. doi: 10.11648/j.ajtab.20210701.12

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@article{10.11648/j.ajtab.20210701.12,
  author = {Aichatou Mourfou and Idrissa Mohamed Ouedraogo},
  title = {Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU)},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {7},
  number = {1},
  pages = {8-15},
  doi = {10.11648/j.ajtab.20210701.12},
  url = {https://doi.org/10.11648/j.ajtab.20210701.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20210701.12},
  abstract = {This research examines the effect of different types of tax revenues on income inequality in WAEMU countries over the period 1996 to 2015. Double least squares (2SLS) are used as an estimation technique to analyze the effect of these different types of tax revenues, including total tax revenues (the sum of all revenues), direct tax revenues (which include profit and income taxes), domestic indirect tax revenues (e.g., value added tax and excise duties) and commercial tax revenues (e.g., customs duties). The results show that an increase in direct tax revenues leads to a reduction in income inequality. In other words, progressive income taxation allows for an efficient redistribution of income from richer to poorer people, which contributes strongly to the reduction of income inequality. On the other hand, indirect domestic tax revenues and commercial tax revenues are found to be neutral in income distribution. In fact, WAEMU countries, in order to compensate for the fiscal losses resulting from the reduction of customs tariffs, have adopted a reform of domestic taxation focused mainly on the development of non-progressive indirect taxes, i.e., taxes governed by liberal principles of fiscal neutrality: taxation must not disrupt individual choices of resource allocation. These tax reforms thus explain the neutrality of the effects of indirect taxation in the WAEMU zone. In the light of these results, the paper suggests that WAEMU countries should strengthen the progressivity of direct taxes and always maintain the neutrality of indirect taxes.},
 year = {2021}
}

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TY  - JOUR
T1  - Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU)
AU  - Aichatou Mourfou
AU  - Idrissa Mohamed Ouedraogo
Y1  - 2021/02/02
PY  - 2021
N1  - https://doi.org/10.11648/j.ajtab.20210701.12
DO  - 10.11648/j.ajtab.20210701.12
T2  - American Journal of Theoretical and Applied Business
JF  - American Journal of Theoretical and Applied Business
JO  - American Journal of Theoretical and Applied Business
SP  - 8
EP  - 15
PB  - Science Publishing Group
SN  - 2469-7842
UR  - https://doi.org/10.11648/j.ajtab.20210701.12
AB  - This research examines the effect of different types of tax revenues on income inequality in WAEMU countries over the period 1996 to 2015. Double least squares (2SLS) are used as an estimation technique to analyze the effect of these different types of tax revenues, including total tax revenues (the sum of all revenues), direct tax revenues (which include profit and income taxes), domestic indirect tax revenues (e.g., value added tax and excise duties) and commercial tax revenues (e.g., customs duties). The results show that an increase in direct tax revenues leads to a reduction in income inequality. In other words, progressive income taxation allows for an efficient redistribution of income from richer to poorer people, which contributes strongly to the reduction of income inequality. On the other hand, indirect domestic tax revenues and commercial tax revenues are found to be neutral in income distribution. In fact, WAEMU countries, in order to compensate for the fiscal losses resulting from the reduction of customs tariffs, have adopted a reform of domestic taxation focused mainly on the development of non-progressive indirect taxes, i.e., taxes governed by liberal principles of fiscal neutrality: taxation must not disrupt individual choices of resource allocation. These tax reforms thus explain the neutrality of the effects of indirect taxation in the WAEMU zone. In the light of these results, the paper suggests that WAEMU countries should strengthen the progressivity of direct taxes and always maintain the neutrality of indirect taxes.
VL  - 7
IS  - 1
ER  -

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Author Information

Aichatou Mourfou

Department of Economics and Management, University Thomas Sankara, Ouagadougou, Burkina-Faso
Idrissa Mohamed Ouedraogo

PhD School, University Aube Nouvelle, Ouagadougou, Burkina-Faso

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APA Style

Aichatou Mourfou, Idrissa Mohamed Ouedraogo. (2021). Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU). American Journal of Theoretical and Applied Business, 7(1), 8-15. https://doi.org/10.11648/j.ajtab.20210701.12

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ACS Style

Aichatou Mourfou; Idrissa Mohamed Ouedraogo. Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU). Am. J. Theor. Appl. Bus. 2021, 7(1), 8-15. doi: 10.11648/j.ajtab.20210701.12

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AMA Style

Aichatou Mourfou, Idrissa Mohamed Ouedraogo. Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU). Am J Theor Appl Bus. 2021;7(1):8-15. doi: 10.11648/j.ajtab.20210701.12

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@article{10.11648/j.ajtab.20210701.12,
  author = {Aichatou Mourfou and Idrissa Mohamed Ouedraogo},
  title = {Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU)},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {7},
  number = {1},
  pages = {8-15},
  doi = {10.11648/j.ajtab.20210701.12},
  url = {https://doi.org/10.11648/j.ajtab.20210701.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20210701.12},
  abstract = {This research examines the effect of different types of tax revenues on income inequality in WAEMU countries over the period 1996 to 2015. Double least squares (2SLS) are used as an estimation technique to analyze the effect of these different types of tax revenues, including total tax revenues (the sum of all revenues), direct tax revenues (which include profit and income taxes), domestic indirect tax revenues (e.g., value added tax and excise duties) and commercial tax revenues (e.g., customs duties). The results show that an increase in direct tax revenues leads to a reduction in income inequality. In other words, progressive income taxation allows for an efficient redistribution of income from richer to poorer people, which contributes strongly to the reduction of income inequality. On the other hand, indirect domestic tax revenues and commercial tax revenues are found to be neutral in income distribution. In fact, WAEMU countries, in order to compensate for the fiscal losses resulting from the reduction of customs tariffs, have adopted a reform of domestic taxation focused mainly on the development of non-progressive indirect taxes, i.e., taxes governed by liberal principles of fiscal neutrality: taxation must not disrupt individual choices of resource allocation. These tax reforms thus explain the neutrality of the effects of indirect taxation in the WAEMU zone. In the light of these results, the paper suggests that WAEMU countries should strengthen the progressivity of direct taxes and always maintain the neutrality of indirect taxes.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Effect of Tax Revenue Mobilization on Income Inequalities in West African Economic and Monetary Union Countries (WAEMU)
AU  - Aichatou Mourfou
AU  - Idrissa Mohamed Ouedraogo
Y1  - 2021/02/02
PY  - 2021
N1  - https://doi.org/10.11648/j.ajtab.20210701.12
DO  - 10.11648/j.ajtab.20210701.12
T2  - American Journal of Theoretical and Applied Business
JF  - American Journal of Theoretical and Applied Business
JO  - American Journal of Theoretical and Applied Business
SP  - 8
EP  - 15
PB  - Science Publishing Group
SN  - 2469-7842
UR  - https://doi.org/10.11648/j.ajtab.20210701.12
AB  - This research examines the effect of different types of tax revenues on income inequality in WAEMU countries over the period 1996 to 2015. Double least squares (2SLS) are used as an estimation technique to analyze the effect of these different types of tax revenues, including total tax revenues (the sum of all revenues), direct tax revenues (which include profit and income taxes), domestic indirect tax revenues (e.g., value added tax and excise duties) and commercial tax revenues (e.g., customs duties). The results show that an increase in direct tax revenues leads to a reduction in income inequality. In other words, progressive income taxation allows for an efficient redistribution of income from richer to poorer people, which contributes strongly to the reduction of income inequality. On the other hand, indirect domestic tax revenues and commercial tax revenues are found to be neutral in income distribution. In fact, WAEMU countries, in order to compensate for the fiscal losses resulting from the reduction of customs tariffs, have adopted a reform of domestic taxation focused mainly on the development of non-progressive indirect taxes, i.e., taxes governed by liberal principles of fiscal neutrality: taxation must not disrupt individual choices of resource allocation. These tax reforms thus explain the neutrality of the effects of indirect taxation in the WAEMU zone. In the light of these results, the paper suggests that WAEMU countries should strengthen the progressivity of direct taxes and always maintain the neutrality of indirect taxes.
VL  - 7
IS  - 1
ER  -

Copy | Download