Driving information communication technology for tax revenue mobilization in Sub-Saharan Africa

Abstract

This study explores whether increasing Information and Technology Communication (ICT) boosts government revenue mobilization for sustainable development in 48 Sub-Saharan African countries from 2004 to 2020. While total tax revenue non-resource as a percentage of GDP and tax revenue as a percentage of GDP are used to proxy for tax revenue mobilization, three ICT measures are used, namely; the telephone penetration rate, the mobile phone penetration rate and internet penetration rate. To perform the analysis, we adopt the Generalized Method of Moments (GMM). The empirical findings are as follows. First, while the calculated net impacts are substantially positive, the corresponding marginal ICT effects utilized for calculating net effects are extremely negative. Second, an extensive study is carried out to determine complementing policy thresholds. These thresholds include: 21.959 (per 100 people) telephone penetration for total income from tax revenue; 16.333 (per 100 people) internet penetration for total income from tax; 21.125 internet penetration (per 100 people) for the income from the tax on non-resource income. This study has policy relevance, and implications as the penetration of the ICT rate can be influenced by policies to mobilize government revenue effectively.