Browsing by Author "Kumonika, Lukas"

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    An investigation of the relationship between tax revenues and economic growth: The case of Namibia
    (University of Namibia, 2024) Kumonika, Lukas
    This study empirically investigated the relationship between tax revenue and economic growth in Namibia using the annual data for 1981-2020. The time series on GDP, net tax, private consumption and gross capital formation were extracted from annual national accounts tables available on Namibia Statistics Agency’s web site. The ARDL bound test confirmed no cointegration between tax revenue and GDP growth hence, the short-run ARDL was employed. The results of the short-run ARDL revealed a positive and significant contemporaneous relationship between taxation and economic growth. It is therefore, inferred that Namibia conforms to the hypothesis that economic growth and tax revenue reinforce each other In the same vein economic growth is significantly and negatively affected by the some historical values (lags) of net tax.. Moreover, the Granger causality test divulged neither unidirectional nor bidirectional causal relationship between tax revenue and GDP growth. In the final analysis, it is recommended that tax policies should be concurrently implemented with accelerated supply side policies such as business financing, product cost subsidization, entrepreneurial skill acquisition, especially in growth-driving sectors and eventually broaden the tax base. In other words, the results of the study implies that growth policies should be supplemented by a strong tax system so as to optimize revenue collection. The consistence of the findings of this study with the optimal tax theory implies that excessive taxation can distort economic activity, therefore, slow down production