Role Of Taxation In Populism,Financial Inclusion And Firm Performance In The African Economy

The role of government is essential in Africa's Millennium Development Goals achievement.These goals include poverty eradication,income equality,child mortality reduction,health,and environmental stability.Taxation is the main channel for the government to intervene in the economy to achieve these goals.It also helps sustainable growth by supplying appropriate funds to governments.This thesis tries to answer the following issues to understand the nature of the government role on taxation in the African economy.African economy needs to find an appropriate government regime that helps to address poverty and inequality issues through taxation.They also need to investigate the relationship between recent financial development and tax revenue to finance funds.Weak tax administration and corruption harm businesses in Africa,and a weak economy worse government funding.Chapter Two studies the impact of the government's political regime on income inequality and poverty through the taxation channel.One of the main political regimes in the African economy is populism.Using Fixed Effects(FE)and Two-Stage Least Squares(2SLS)econometric strategies on the cross-country panel data,this paper finds that the populist regime effectively solves income inequality through taxation but increases poverty through taxation.Chapter Three investigates the effect of financial inclusion on tax revenue in African countries.That is,it seeks to address whether tax revenue changes are linked to the evolution in financial inclusion using Fixed Effects(FE)and Generalized Method of Moment(GMM)econometric strategies on the World Bank Global Findex dataset.The main finding is that improvement in financial inclusion increases tax revenue.Chapter Four examines the impact of tax administration and corruption on firm self-financing and the level at which tax administration and corruption harm firm financing in Africa.Using the Tobit model,Instrument variable estimation of Tobit model,and Multinomial Probit model econometric strategies on the firmlevel survey in Africa,World Bank Enterprise,this paper finds that weak tax administration and corruption reduce the firm's self-financing and are serious obstacles to its self-financing.