VIVA VOCE 25th JANUARY, 2024 - TIME 09:00AM
Venue: Room 210, Second Floor, CoSS Tower.
EPHRAIM OSWALD MDEE (REG NO: 2017-07-00011)
PANEL
|
NAME |
POSITION |
|
Prof. Deograsias Mushi |
Chairperson |
|
Dr. Innocent Pantaleo |
External Examiner/Representative |
|
Dr. Wilhelm Ngasamiaku |
Internal Examiner |
|
Prof. Jehovaness Aikaeli |
Supervisor |
|
Dr. Kenneth Mdadila |
Nominee of the Head |
|
Dr. Rosemary Taylor |
Co-opted Member |
|
Dr. John Mtui |
Co-opted Member |
|
Dr. Dimpna Mosha |
Co-opted Member |
|
Dr. Elinami Minja |
Nominee of the Dean |
Title: “Effects of Taxation on Capital Formation, Foreign Direct Investment Inflows and Economic Growth in Tanzania”
This thesis analyzed the impact of taxation on economic growth, capital formation and Foreign Direct Investment (FDI) inflows in Tanzania. The thesis applied the Nonlinear Auto-Regressive Distributed Lag (NARDL) model for the estimation of effects of taxes on economic growth, whereby, the Auto-Regressive Distributed Lag (ARDL) model was used in estimating the effect of taxes on capital formation. Finally, the thesis applied the Cross Sectional Autoregressive Distributed Lag (CS-ARDL) to estimate the impact of taxes on FDI inflows.
The findings have revealed that not only in the long run but also in the short run the total tax revenue affects economic growth significantly through its pass-through effects on human capital channel. The study results show that Corporate Income Tax has a negative impact on investment dynamics in both the short and long-run. Nonetheless, the study found no significant evidence on impact of VAT on investment in the long run, while in the short run, changes VAT leads into a decrease in investment. Finally, the study found that both the Effective Average Tax Rate (EATR) and Effective Marginal Tax Rate (EMTR) have positive and statistically significant relationship to the FDI inflows.
The thesis recommends the Government to invest more into creation of the skilled human capital in the country, who later adds into the growth of the country through the taxes they pay for the economic activities undertaken. Further, the Government needs to re-examine its taxation policies so as to attract more investment in the country in order to foster economic growth. Additionally, incentives provided by the Government to attract foreign investment has yielded the anticipated results for the country in the long-run, but more still needs to be done, which can be done through facilitating the integration of the Tanzanian economy into the regional and global value chains by promoting import-substitution industries and broaden products mix.