The challenges faced by four African economies : Zimbabwe, Zambia, Tanzania, and the Sudan / 958

Includes bibliographical references

Excise taxes

The author contrasts excise taxes with sales taxes, consumption taxes, licenses, stamp, duties, and other indirect taxes. He describes different types of excises, their relative tax burdens, and how progressive and economically efficient they may be. The main argument for traditional excise taxes, he says, is that they yield substantial revenue with relatively little complaint. A second justification is that the cost of the excessive use of commodities is borne by the purchasers, not by society at large. A third argument is to penalize people for a commodity's use (especially popular with commodities such as alcohol). Arguments against traditional excises: they tend to be regressive, because of the low income elasticity of demand, and they place an unequal burden on families at given income levels. They deprive families of the funds for milk and other essential items, without reducing consumption of taxed goods. High rates tend to increase smuggling and illicit production, often of inferior, even dangerous, substitutes. And the case for them is not strong, resting as it often does on moral grounds. But excise taxes are sure to continue as they yield revenues and are generally more acceptable than other sources of revenue, such as income taxes. Taxes on motor fuel and related motor vehicle levies are among the three most productive excises. They are justified as a charge for the use of roads, in lieu of tolls. In Western Europe, they are seen as progressive, as reaching the people most able to pay -- and incidentally as reducing road congestion. Criticism of such taxes centers on how best to attain desired goals -- for example, sorting out the relative burdens on light and heavy vehicles. Luxury excises tend to be applied to commodities and services with a high income-elasticity of demand, the assumption being that they will reach the people best able to pay them -- achieving equity without relying on increased income taxes, which are difficult to enforce in developing countries and hurt incentives. A luxury excise tax, limited to certain items, is viewed as being progressive, which a sales tax rarely is. But if various rates apply, compliance and administration become complex, and consumers may discriminate among closely related commodities. Moreover, the goods taxed are often widely used by lower income groups (sugar and kerosene are prime examples). For these reasons, many countries are introducing sales taxes, with few rates or a single rate (with exemptions), with simplified processing, and with less ambiguity about what is or is not taxed.Environmental Economics&Policies,Public Sector Economics&Finance,Municipal Financial Management,Urban Economics,Economic Theory&Research

A comparison of four African manufacturers sales taxes and two retail sales taxes

This paper presents information on manufacturers sales taxes in four African countries — Kenya, Tanzania, Zambia and Ghana. Because there are no retail sales taxes in tropical Africa, a comparison is made with the retail sales taxes of two relatively small non-African countries — Barbados and Iceland. Topics discussed in this paper include the coverage of the taxes, the rates, the revenue importance, the numbers of registered firms, the administration and operation of the taxes, inspection and audit programmes and the problem of delinquency. Finally, a number of merits and criticisms of these taxes are pointed out. A number of general conclusions are suggested from the inspection of these six sales taxes. It is found that in a developing country a sales tax can be a very significant revenue source and sales taxes at the manufacturing level can function extremely well. A general problem has been the failure to develop adequate audit programmes, and also the need for simplicity in tax structure and operation has often been overlooked. There are serious dangers in placing sales tax administration under the jurisdiction of customs and excise departments because the personnel in these departments generally lack the accounting knowledge necessary to effectively administer a sales tax. Finally, it appears that the exemption of basic foods from sales tax has effectively lessened possible complaints against the taxes on equity grounds

The Life of Rev. Thomas Scott La Due

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The Nature and Structure of Sales Taxation

Sales taxation has, in the course of 25 years, become the chief single source of state tax revenue, now yielding about $2.5 billion or 21 per cent of total state tax revenue in the 1955 fiscal year.\u27 In the 31 states using the tax, it yields approximately one third of state tax revenues, with yields of over 40 per cent in Washington, Georgia, Michigan, and Missouri. The tax has also been growing in importance at the local level, now yielding about$400 million, the bulk of this being obtained by a relatively few large cities. The federal government has never employed a general sales tax, despite considerable pressure for the tax at various times. Such taxes are used extensively by other national governments in various parts of the world--but in most of these countries there is no similar use at lower levels of government