Tax Revenue Mobilization in Sub-Saharan Africa: Does political Legitimacy Matters?

Abstract

The mobilization of substantial domestic resources is required to finance human and physical capital in order to achieve the sustainable development goals. In developing countries like those of Sub-Saharan Africa, the mobilization of tax revenues remains a great challenge. In this context, identifying the determinants of fiscal capacity remains crucial to guide the adoption of appropriate fiscal reforms. Therefore, as part of the wave of literature on the institutional and political determinants of fiscal capacity, this article explores the effect of political legitimacy on tax revenues in a sample of 41 SSA countries over the period 1996-2017. The system GMM in two steps estimator is used for empirical investigation. The result shows that tax revenue increases with political legitimacy. This result suggests that political legitimization in SSA remains crucial to mobilize more resources in order to adequately finance the development.