A Scholarly Consideration on the Theories and Literature of Tax Reforms in Sierra Leone

Abstract

<p>This study examines how tax reforms have been implemented and how it has influenced Sierra Leone's ability to streamline fiscal structures. The topic of tax revenue mobilization is becoming more and more popular and crucial for emerging nations. The fiscal arrangement that exists between taxpayers and the current political administration is a fiduciary relationship that binds both parties to the right and obligation to effectively and efficiently mobilize revenues. The tax system in use has had a significant impact on government revenue since it allows for loopholes, dishonest tax authorities, inadequate data, and many other issues. This study also applauds the government for strengthening corporate tax authority plans and putting local restrictions on large corporations and foreign governments who conduct business in Sierra Leone. By doing this, taxpayers and tax authorities will be encouraged to be accountable, transparent, and compliant. Additionally, Sierra Leone's tax administration underwent a number of modifications between 2014 and 2019, although nothing is known about how well those reforms fared in terms of raising tax revenue. In fact, reform as a factor affecting tax collection has received little attention in the research on what motivates domestic resource mobilization. The paper evaluates whether reforms are crucial for raising tax revenue by taking into account various aspects of reforms in the tax administration, including tax-related reforms and reforms related to institutions, and using various econometric methods based on ordinary least squares, instrumental variable two-stage least squares, and iteratively reweighted least squares. According to the findings, tax reforms, institutional reforms, and all other reforms put together have greatly improved tax revenue performance. The main takeaway is that greater institutional and tax-related reforms are essential for sustainingly increasing tax revenue collection.</p><p><strong> </strong></p><p><strong>JEL</strong>: E61, E62, P35</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0057/a.php" alt="Hit counter" /></p>