## Resource Dependence and Fiscal Effort in Sub-Saharan Africa

_IMF Working Papers, August 28, 2013_

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## Bibliographic details
- Authors: Alun H. Thomas, Juan P Trevino
- Published: August 28, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484391501.001

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### Summary
- Authors: Alun H. Thomas, Juan P Trevino
- Date: August 28, 2013
- Core question: Whether the availability of higher resource revenue in resource-exporting countries in sub-Saharan Africa has led to lower taxation effort of other revenue categories.
- Analytical focus: Relationship between non-resource tax revenue and (a) resource revenue, and (b) statutory tax rates.
- Key contextual point: High natural resource prices in recent years have resulted in sizeable increases in fiscal revenue for many resource-exporting countries in sub-Saharan Africa, but this revenue source is volatile.

### Main findings
- Evidence suggests that nonresource revenue is negatively influenced by a higher resource revenue-to-GDP ratio.
- The lower take up of nonresource taxes in resource-rich countries is correlated with higher levels of corruption.
- The correlation with corruption suggests weaker institutions affect nonresource revenue through incentives for tax evasion and/or large tax exemptions.

### Policy implications and interpretation
- Resource-rich countries should rely on other forms of taxation to help fund public expenditure, given the volatility of resource revenue.
- Institutional quality matters: higher corruption is associated with weaker nonresource tax performance, indicating that addressing corruption and strengthening institutions could mitigate the negative impact of resource dependence on nonresource revenue.

### Subject areas and keywords
- Subjects: Corporate income tax, Corruption, Crime, Environment, Natural resources, Revenue administration, Tax evasion, Taxes, Value-added tax
- Keywords: Corporate income tax, Corruption, exhaustible resources, natural resource export, Natural resources, oil, resource, resource booms, resource country, resource revenue, resource rich, revenue effort, revenue ratio, Sub-Saharan Africa, Tax law, taxation, Value-added tax, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/resource-dependence-and-fiscal-effort-in-sub-saharan-africa-40900_