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Determinant of Tax Revenue Effort in Sub-Saharan African Countries: A Stochastic Frontier Analysis

Agumas Alamirew Mebratu


Fentaw Leykun


Merouane Lakehal-Ayat

Agumas Alamirew Mebratu 1 ,

Fentaw Leykun 1 Merouane Lakehal-Ayat 1 
  1. Bahir Dar University, College of Business and Economics, Department of Accounting and Finance, Ethiopia. 1

Pages: 47-71

DOI: 10.18488/journal.26.2020.91.47.71

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Article History:

Received: 10 February, 2020
Revised: 13 March, 2020
Accepted: 15 April, 2020
Published: 29 May, 2020


The main objective of this paper was empirically examined the trend and its drivers of tax revenue effort in Sub- Saharan African countries using panel data and stochastic frontier analysis techniques inter alia:- random effect, fixed effect, half-normal, exponential-normal, and truncated-normal analysis for a period of 2000 to 2018. The estimation result shows that tax effort is positively and significantly related to openness, Share of agriculture sector, external debt, share of the construction sector, population growth, age dependency, corruption and GDP per capita and negatively and significantly related with a share of the service sector, official development assistance, foreign direct investment, population density, literacy and official exchange rates. In general, depending on the choice of analysis technique, both supply- side factors and demand - side factors are highly affected tax revenue effort and before designing tax policy, therefore, those concerned bodies be going to first determine their tax revenue effort.
Contribution/ Originality
This study uses the new estimation methodology of stochastic frontier analysis to examine tax revenue effort in 23 Sub-Saharan African countries over 19 year’s panel data set from 2000-2018 and the paper's primary contribution finding is that economic, demographic, policy and institutional factors have a significant effect on tax revenue effort.


Determinant, Tax revenue effort, Sub Saharan Africa, Stochastic frontier analysis, Panel data, Random effect, Truncated normal.


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This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


All authors contributed equally to the conception and design of the study.

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