Does Financial Inclusion Impact Tax Revenue in Sub-Saharan African Countries? A Panel Data Analysis

Abstract

The issue of increasing domestic revenue mobilization remains problematic for many governments, especially in low-income countries. Leveraging systems theory and collaborative intervention theory of financial inclusion, this study examines how financial inclusion impacts tax revenues in selected sub-Saharan African countries (SSA) from 2011-2017 using data collected from subSaharan Africa. Based on the dynamic panel estimation results of the system GLS and random effect estimations, mobile money account, as well as financial inclusion, play a significant impact the tax revenue drive of SSA countries. The study concludes that financial inclusion contributes significantly to tax revenue in SSA counties. It is offered that the monetary authorities should drive towards enhancing the financial institutions to accommodate more inclusive services and as well put up strict adherence to the requirements and documentation in order to reduce perpetration of fraud and maintain sustainable tax revenue.