The Revenue Implications of Trade Liberalization in Tanzania

Manamba Epaphra

doi:doi:10.11648/j.jwer.20140303.12

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The Revenue Implications of Trade Liberalization in Tanzania

Manamba Epaphra

Published in Journal of World Economic Research (Volume 3, Issue 3)

Received: 19 July 2014 Accepted: 29 July 2014 Published: 10 August 2014

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Abstract

This paper examines the argument that trade liberalization depresses the import duty revenue, and consequently adversely affects the total tax revenue. The study is thought to be significant because Tanzania experiences difficulty in replacing import duty revenue loss as a consequence of trade reform by strengthening its consumption tax system. In the course of analysis, cointegration analysis and error correction modelling are employed over the 1979/80-2009/10 period. The empirical results show that import duty revenue-to-GDP ratio is positively related to tariff rates, implying that a reduction in the tariff rates results in a significant loss of import duty revenue. The results also show that the removal of protectionist policies led to an increase in import-to-GDP ratio which in turn led to rising shares of import duty revenue in GDP. Finally, the results generate some policy implications. The proper issue in tax design under trade liberalization, Tanzania needs to strengthen the domestic tax system and raise tax revenue without increasing tax rates by reinforcing tax and customs administrations so as to maintain fiscal stability.

Published in	Journal of World Economic Research (Volume 3, Issue 3)
DOI	10.11648/j.jwer.20140303.12
Page(s)	25-36
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Imports, Import Duty Revenue, Trade Liberalization, Tanzania

References

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APA Style

Manamba Epaphra. (2014). The Revenue Implications of Trade Liberalization in Tanzania. Journal of World Economic Research, 3(3), 25-36. https://doi.org/10.11648/j.jwer.20140303.12

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ACS Style

Manamba Epaphra. The Revenue Implications of Trade Liberalization in Tanzania. J. World Econ. Res. 2014, 3(3), 25-36. doi: 10.11648/j.jwer.20140303.12

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AMA Style

Manamba Epaphra. The Revenue Implications of Trade Liberalization in Tanzania. J World Econ Res. 2014;3(3):25-36. doi: 10.11648/j.jwer.20140303.12

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@article{10.11648/j.jwer.20140303.12,
  author = {Manamba Epaphra},
  title = {The Revenue Implications of Trade Liberalization in Tanzania},
  journal = {Journal of World Economic Research},
  volume = {3},
  number = {3},
  pages = {25-36},
  doi = {10.11648/j.jwer.20140303.12},
  url = {https://doi.org/10.11648/j.jwer.20140303.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20140303.12},
  abstract = {This paper examines the argument that trade liberalization depresses the import duty revenue, and consequently adversely affects the total tax revenue. The study is thought to be significant because Tanzania experiences difficulty in replacing import duty revenue loss as a consequence of trade reform by strengthening its consumption tax system. In the course of analysis, cointegration analysis and error correction modelling are employed over the 1979/80-2009/10 period. The empirical results show that import duty revenue-to-GDP ratio is positively related to tariff rates, implying that a reduction in the tariff rates results in a significant loss of import duty revenue. The results also show that the removal of protectionist policies led to an increase in import-to-GDP ratio which in turn led to rising shares of import duty revenue in GDP. Finally, the results generate some policy implications. The proper issue in tax design under trade liberalization, Tanzania needs to strengthen the domestic tax system and raise tax revenue without increasing tax rates by reinforcing tax and customs administrations so as to maintain fiscal stability.},
 year = {2014}
}

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TY  - JOUR
T1  - The Revenue Implications of Trade Liberalization in Tanzania
AU  - Manamba Epaphra
Y1  - 2014/08/10
PY  - 2014
N1  - https://doi.org/10.11648/j.jwer.20140303.12
DO  - 10.11648/j.jwer.20140303.12
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
SP  - 25
EP  - 36
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20140303.12
AB  - This paper examines the argument that trade liberalization depresses the import duty revenue, and consequently adversely affects the total tax revenue. The study is thought to be significant because Tanzania experiences difficulty in replacing import duty revenue loss as a consequence of trade reform by strengthening its consumption tax system. In the course of analysis, cointegration analysis and error correction modelling are employed over the 1979/80-2009/10 period. The empirical results show that import duty revenue-to-GDP ratio is positively related to tariff rates, implying that a reduction in the tariff rates results in a significant loss of import duty revenue. The results also show that the removal of protectionist policies led to an increase in import-to-GDP ratio which in turn led to rising shares of import duty revenue in GDP. Finally, the results generate some policy implications. The proper issue in tax design under trade liberalization, Tanzania needs to strengthen the domestic tax system and raise tax revenue without increasing tax rates by reinforcing tax and customs administrations so as to maintain fiscal stability.
VL  - 3
IS  - 3
ER  -

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Author Information

Manamba Epaphra

Department of Accounting and Finance, Institute of Accountancy Arusha, Arusha, Tanzania

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APA Style

Manamba Epaphra. (2014). The Revenue Implications of Trade Liberalization in Tanzania. Journal of World Economic Research, 3(3), 25-36. https://doi.org/10.11648/j.jwer.20140303.12

Copy | Download

ACS Style

Manamba Epaphra. The Revenue Implications of Trade Liberalization in Tanzania. J. World Econ. Res. 2014, 3(3), 25-36. doi: 10.11648/j.jwer.20140303.12

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AMA Style

Manamba Epaphra. The Revenue Implications of Trade Liberalization in Tanzania. J World Econ Res. 2014;3(3):25-36. doi: 10.11648/j.jwer.20140303.12

Copy | Download

@article{10.11648/j.jwer.20140303.12,
  author = {Manamba Epaphra},
  title = {The Revenue Implications of Trade Liberalization in Tanzania},
  journal = {Journal of World Economic Research},
  volume = {3},
  number = {3},
  pages = {25-36},
  doi = {10.11648/j.jwer.20140303.12},
  url = {https://doi.org/10.11648/j.jwer.20140303.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20140303.12},
  abstract = {This paper examines the argument that trade liberalization depresses the import duty revenue, and consequently adversely affects the total tax revenue. The study is thought to be significant because Tanzania experiences difficulty in replacing import duty revenue loss as a consequence of trade reform by strengthening its consumption tax system. In the course of analysis, cointegration analysis and error correction modelling are employed over the 1979/80-2009/10 period. The empirical results show that import duty revenue-to-GDP ratio is positively related to tariff rates, implying that a reduction in the tariff rates results in a significant loss of import duty revenue. The results also show that the removal of protectionist policies led to an increase in import-to-GDP ratio which in turn led to rising shares of import duty revenue in GDP. Finally, the results generate some policy implications. The proper issue in tax design under trade liberalization, Tanzania needs to strengthen the domestic tax system and raise tax revenue without increasing tax rates by reinforcing tax and customs administrations so as to maintain fiscal stability.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - The Revenue Implications of Trade Liberalization in Tanzania
AU  - Manamba Epaphra
Y1  - 2014/08/10
PY  - 2014
N1  - https://doi.org/10.11648/j.jwer.20140303.12
DO  - 10.11648/j.jwer.20140303.12
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
SP  - 25
EP  - 36
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20140303.12
AB  - This paper examines the argument that trade liberalization depresses the import duty revenue, and consequently adversely affects the total tax revenue. The study is thought to be significant because Tanzania experiences difficulty in replacing import duty revenue loss as a consequence of trade reform by strengthening its consumption tax system. In the course of analysis, cointegration analysis and error correction modelling are employed over the 1979/80-2009/10 period. The empirical results show that import duty revenue-to-GDP ratio is positively related to tariff rates, implying that a reduction in the tariff rates results in a significant loss of import duty revenue. The results also show that the removal of protectionist policies led to an increase in import-to-GDP ratio which in turn led to rising shares of import duty revenue in GDP. Finally, the results generate some policy implications. The proper issue in tax design under trade liberalization, Tanzania needs to strengthen the domestic tax system and raise tax revenue without increasing tax rates by reinforcing tax and customs administrations so as to maintain fiscal stability.
VL  - 3
IS  - 3
ER  -

Copy | Download