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VOL. 7, ISSUE 2 (2025)
Determinants of tax ratio in selected east african community member states
Authors
Patrick Mwanza Nzula, James Murunga, David Murunga Musimbi
Abstract
This study investigates the key determinants of tax-to-GDP ratio in
selected East African Community (EAC) from 2013 to 2023. Despite sustained
economic growth, EAC member states persistently exhibit tax ratio below the 20%
threshold recommended for sustainable development. The analysis employs a fixed
effects panel regression model on data from five EAC countries namely Kenya,
Tanzania, Rwanda, Uganda, and Burundi. The study uses fixed effects model. The
results identify GDP per capita and the share of manufacturing in GDP as the
statistically significant drivers of tax-to-GDP ratio, with coefficients of β =
3.88 (p = 0.002) and β = 0.16 (p = 0.007) respectively. The study concludes
that GDP per capita and manufacturing are the foundational drivers of
sustainable revenue mobilization. Based on the results, the study recommends
East African countries should prioritize broad-based economic growth and
industrial policy in order to enhance domestic revenue generation.
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Pages:70-75
How to cite this article:
Patrick Mwanza Nzula, James Murunga, David Murunga Musimbi "Determinants of tax ratio in selected east african community member states". International Journal of Management and Economics, Vol 7, Issue 2, 2025, Pages 70-75
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