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Indirect Taxes and Economic Growth in Zimbabwe. An ARDL Analysis

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dc.contributor.author Mangisi, Prudence Jesika
dc.contributor.author Makamba, Beatrice Simbisai
dc.contributor.author Sunge, Regret
dc.date.accessioned 2021-10-21T11:20:09Z
dc.date.available 2021-10-21T11:20:09Z
dc.date.issued 2021
dc.identifier.issn 2789-6803
dc.identifier.uri http://ir.gzu.ac.zw:8080/xmlui/handle/123456789/443
dc.description.abstract The study examined the impact of indirect taxes on economic growth in Zimbabwe for the period 1990- 2018. The emergence and growth of the informal sector in Zimbabwe has seen tax authorities responding by realigning tax systems to the informal economy. This resulted in indirect taxes increasing relative to traditional direct taxes. Nonetheless, no empirical attempt has been made to separate the effects of these tax heads. Accordingly, we disaggregate and compare the effects of indirect and direct taxes on economic growth in Zimbabwe. Applying the Auto-Regressive Distributed Lag (ARDL) estimation technique on a time series model derived from Engen and Skinner (1996) shows that direct and indirect taxes have significantly negative economic growth effects. Also, we find no significant impact difference between the two tax heads. Furthermore, ARDL Bound Tests confirmed the existence of cointegration between both tax heads and economic growth. The findings suggest that the tax being levied by the government is mainly distortionary. They discourage capital and labour productivity. Accordingly, we recommend that authorities lower the tax rates. This should be complemented by broadening the tax base and policy measures to promote tax compliance and efficiency en_US
dc.publisher Research Journal of Economic and Management Studies (RJEMS) en_US
dc.relation.ispartofseries Vol.1;No.2
dc.subject Auto-regressive distributed lag model en_US
dc.subject Cointegration en_US
dc.subject Economic growth en_US
dc.subject Indirect taxes en_US
dc.subject Cointegration en_US
dc.title Indirect Taxes and Economic Growth in Zimbabwe. An ARDL Analysis en_US
dc.type Article en_US

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