Is value-added tax a moneymaking-machine for developing economies? Evidence from Ghana

Value-added tax (VAT) became a tax of choice recommended by the Breton Wood Institutions to boost tax revenue shares in developing countries. However, after several decades of VAT implementation globally, empirical evidence on its revenue effects is still inconclusive. The key question in this paper is: has the adoption of value-added tax (VAT) really made Ghana’s tax revenue mobilisation better off? This paper employs both the Fully Modified OLS and Autoregressive Distributed Lag (ARDL) approaches to test the moneymaking hypothesis for Ghana’s VAT. On the whole, the study fails to uphold the view that the VAT is a money-machine for Ghana. This implies that its adoption has not really brought about any dramatic improvement in aggregate tax shares. The study therefore recommends a reduction in the over concentration on VAT. An appropriate balance of tax-mix is therefore recommended.JEL classification: H25, E62, O23Keywords: value-added tax, fiscal policy, government revenue, development polic

Changing tax elasticities over time : the case of Tanzania / 91-0119

Includes bibliographical references (p. 16-17)

The moderating effect of audit quality on the relation between shareholder activism and earnings management: Evidence from France

The present paper aims to provide empirical evidence regarding the impact of shareholder activism on earnings management. Specifically, it is focused on investigating the moderating role of an external governance mechanism such as external audit quality. Based on a sample of French companies listed on the French stock market index (SBF 120 index) from 2008 to 2012, we apply several multiple regressions using a standard methodology devised by Aiken and West (1991). We find that external audit quality plays a moderating role between shareholder activism and earnings management in such a way that it greatly helps to attenuate the relationship in the presence of high-quality external audits

Is Value-added Tax a Moneymaking-Machine for Developing Economies? Evidence from Ghana

Value-added tax (VAT) became a tax of choice recommended by the Breton Wood Institutions to boost tax revenue shares in developing countries. However, after several decades of VAT implementation globally, empirical evidence on its revenue effects is still inconclusive. The key question in this paper is: has the adoption of value-added tax (VAT) really made Ghana’s tax revenue mobilisation better off? This paper employs both the Fully Modified OLS and Autoregressive Distributed Lag (ARDL) approaches to test the moneymaking hypothesis for Ghana’s VAT. On the whole, the study fails to uphold the view that the VAT is a money-machine for Ghana. This implies that its adoption has not really brought about any dramatic improvement in aggregate tax shares. The study therefore recommends a reduction in the over concentration on VAT. An appropriate balance of tax-mix is therefore recommended