The Effects of Increasing Tax Reliance on Government Accountability in Resource-Rich Country: Lessons Learned for Oman.

Abstract

This study investigates the assumption that increasing tax reliance decreases the country's dependence on oil by enhancing the government's accountability. The study used a sample of 54 resource-dependent countries (including Oman) from 1996 to 2019. The findings indicate a direct impact of taxes in reducing oil rent shares of GDP, which diversify sources of income in oil countries. In addition, taxes indirectly mitigate the resource curse by increasing the quality of the Institutions that help the oil countries overcome one of the crucial resource dependency issues. Thus, we confidently ensure that Omani policymakers increase tax reliance regardless of financial status.