TAX REVENUE AND ECONOMIC INDICES OF WEST AFRICAN COMMONWEALTH COUNTRIES

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ABSTRACT

This dissertation is an accounting research attempt to explore the impact of tax revenues on the economic indices of West African Commonwealth Countries from 1981 to 2018. In line with the altruistic behavior theory of taxation, it seeks to answer questions on the relevance of tax revenue to various indicators of citizens’ economic welfare such as gross domestic product growth rate, per capita income, gross fixed capital formation growth rate, unemployment rate and human development index. Data were electronically obtained from the official websites of International Center for Tax and Development, World Bank and Federal Inland Revenue Services of Nigeria. Ordinary least square regression analysis was employed in the analyses of hypotheses and findings show that direct tax revenue of West African Commonwealth countries has positive and significant impact on their economic indices whereas the indirect tax revenue relates inversely with the economic indices. The study concludes that taxation remains a potent tool for development of the group whereas indirect tax revenue specifically, provides an avenue for further tax revenue optimization for these countries. Therefore, the study calls for optimization of both tax revenues for adequate mobilization of government revenue; and also suggests that government revenue should be properly channeled to boost the economy and overall welfare of the people as this will promote fiscal responsibility and discipline among the people of this region.







TABLE OF CONTENTS

Cover Page                                                                                                                 i

Title Page                                                                                                                    ii

Declaration                                                                                                                 iii

Certification                                                                                                               iv

Dedication                                                                                                                  v

Acknowledgements                                                                                                    vi

Table of contents                                                                                                        vii

List of Tables                                                                                                              x

Abstract                                                                                                                      xiii


CHAPTER 1   INTRODUCTION                                                                              1

1.1   Background to the Study                                                                                    1

1.2   Statement of the Problem                                                                                   4

1.3   Objectives of the Study                                                                                      7

1.4   Research Questions                                                                                            8

1.5   Research Hypotheses                                                                                          9

1.6   Significance of the Study                                                                                   10

1.7   Scope of the Study                                                                                              11

1.8   Assumption of the Study                                                                                    12

1.9   Operational Definition of Terms                                                                        12


CHAPTER 2   REVIEW OF RELATED LITERATURE                                          14

2.1       Conceptual Framework                                                                                  14

2.1.1    The meaning of taxation                                                                                 14

2.1.2    Origin of taxation                                                                                           15

2.1.3    Kinds and classifications of taxes                                                                  21

2.1.4    Tax systems                                                                                                    23

2.1.5    Historical development of taxation in Nigeria                                               26

2.1.6    Historical development of taxation in Ghana                                                 32

2.1.7    History of taxation in the Gambia                                                                  35

2.1.8    History of taxation in Sierra Leone                                                                38

2.1.9    Tax administration in developing economies                                                41

2.1.10  Taxation and economic growth                                                                      45

2.1.11  Effect of taxation on per capita income                                                         46

2.1.12  Effect of taxation on gross fixed capital formation                                        47

2.1.13  Relationship between taxation and unemployment rate                                 49

2.1.14  Taxation and human development index                                                       50

2.2       Theoretical Framework                                                                                  52

2.2.1    Altruistic behavior theory of taxation                                                            52

2.2.2    Ability to pay theory                                                                                       54

2.2.3    Optimum tax theory                                                                                        55

2.2.4    Theory of optimal commodity taxation                                                          56

2.3       Review of Empirical Literature                                                                      57

2.4       Summary of Empirical Reviews                                                                     75

2.5       Gap in Literature                                                                                            85


CHAPTER 3   METHODOLOGY                                                                             87

3.1       Research Design                                                                                             87

3.2       Area of Study                                                                                                  88

3.3       Sources and Methods of Data Collection                                                       89

3.4       Data Analysis Technique                                                                               90

3.5       Specification of Model                                                                                   91


CHAPTER 4   RESULTS AND DISCUSSIONS                                                       94

4.1       Tax Revenues and Economic Indices of the Gambia                                     94

4.1.1    Descriptive analysis                                                                                        94

4.1.2    Unit root results for the Gambia                                                                     97

4.1.3    Co-integration analysis for the Gambia                                                         99

4.1.4    Granger causality test between tax revenues and economic indices of the

 Gambia                                                                                                          100

4.1.5    Regression results of tax revenues and economic indices of the Gambia           104

4.2       Tax Revenues and Economic Indices of Ghana                                             112

4.2.1    Descriptive analysis for Ghana                                                                       113

4.2.2    Unit root results for Ghana                                                                             115

4.2.3    Co-integration analysis for Ghana                                                                  117

4.2.4    Granger causality test between tax revenues and economic indices of

 Ghana                                                                                                             118

4.2.5    Regression of tax revenues on the economic indices of Ghana                        121

4.3       Tax Revenues and Economic Indices of Nigeria                                           130

4.3.1    Descriptive analysis of selected variables for Nigeria                                   131

4.3.2    Unit root test results for Nigeria                                                                     134

4.3.3    Co-integration analysis for Nigeria                                                                136

4.3.4    Granger causality test for tax revenues and economic indices of Nigeria            137

4.3.5    Regression results of tax revenues on economic indices of Nigeria                        139

4.4       Tax Revenues and Economic Indices of Sierra Leone                                   148

4.4.1    Descriptive analysis    of variables for Sierra Leone                                      149

4.4.2    Unit root test results of variables for Sierra Leone                                        152

4.4.3    Co-integration analysis for Sierra Leone                                                        153

4.4.4    Granger causality test for Sierra Leone                                                          155

4.4.5    Discussions of regression results for Sierra Leone                                         157

4.5       Analyses for all the West African Commonwealth Countries                        167

4.5.1    Descriptive analysis    of selected variables                                                   168

4.5.2    Panel unit root test results of variables                                                          171

4.5.3    Panel co-integration analysis                                                                          173

4.5.4    Granger causality test results                                                                          174

4.5.5    Test of hypotheses                                                                                          176

4.6       Summary of Discussions                                                                                194


CHAPTER 5   SUMMARY, CONCLUSION AND RECOMMENDATIONS        199

5.1       Summary of Findings                                                                                     199

5.2       Conclusions                                                                                                    201

5.3       Recommendations                                                                                          201

Contribution to Knowledge                                                                                        203

References                                                                                                                  205

Appendices                                                                                                                 219

 

 

 

 

 

 

 

 

 

LIST OF TABLES

2.1       Summary of empirical reviews                                                                       75

4.1       Descriptive analyses for the Gambia                                                              94

4.2       Unit root at level                                                                                             97

4.3       Unit root at first differencing                                                                         98

4.4       Co-integration test results for the Gambia                                                     99

4.5       Granger causality test results                                                                          102

4.6       Direct and indirect tax revenues and GDP growth rate estimation                        104

4.7       Direct and indirect tax revenues and per capita income estimation                        106

4.8       Direct and indirect tax revenues and gross fixed capital formation

growth rate estimation                                                                                                108

 4.9      Direct and indirect tax revenues and unemployment rate estimation                        109

4.10     Direct and indirect tax revenues and human development index                 113

4.11     Descriptive analyses for Ghana                                                                      117

4.12     Unit root at level                                                                                             116

4.13     Unit root at first differencing                                                                         116

4.14     Co-integration test results for Ghana                                                              117

4.15     Granger causality test results                                                                          119

4.16     Direct and indirect tax revenues and GDP growth rate estimation                        121

4.17     Direct and indirect tax revenues and per capita income estimation                        123

4.18     Direct and indirect tax revenues and gross fixed capital formation

 growth rate estimation                                                                                   125

4.19     Direct and indirect tax revenues and unemployment rate estimation                        127

4.20     Direct and indirect tax revenues and human development index                 129

4.21     Descriptive analyses for Nigeria                                                                    131

4.22     Unit root at level                                                                                             134

4.23     Unit root at first differencing                                                                         135

4.24     Co-integration test results for the Gambia                                                     136

4.25     Granger causality test results                                                                          138

4.26     Direct and indirect tax revenues and GDP growth rate estimation                        140

4.27     Direct and indirect tax revenues and per capita income estimation                        142

4.28     Direct and indirect tax revenues and gross fixed capital formation

growth rate estimation                                                                                                143

4.29     Direct and indirect tax revenues and unemployment rate estimation                        145

4.30     Direct and indirect tax revenues and human development index                 147

4.31     Descriptive analyses for Sierra Leone                                                            149

4.32     Unit root at level                                                                                             152

4.33     Unit root at first differencing                                                                         153

4.34     Co-integration test results for Sierra Leone                                                   154

4.35     Granger causality test results                                                                          155

4.36     Direct and indirect tax revenues and GDP growth rate estimation                        158

4.37     Direct and indirect tax revenues and per capita income estimation                        160

4.38     Direct and indirect tax revenues and gross fixed capital formation

growth rate estimation                                                                                                162

4.39     Direct and indirect tax revenues and unemployment rate estimation                        164

4.40     Direct and indirect tax revenues and human development index                 166

4.41     Descriptive analyses for the Gambia                                                              168

4.42     Panel unit root at level                                                                                    171

4.43     Panel unit root at first differencing                                                                172

4.44     Panel co-integration test result                                                                       173

4.45     Granger causality test results                                                                          175

4.46     Hausman test for fixed and random effects model                                         177

4.47     Direct and indirect tax revenues and GDP growth rate estimation                        178

4.48     Hausman test for fixed and random effects regression models                    181

4.49     Direct and indirect tax revenues and per capita income estimation                        181

4.50     Hausman test for fixed and random effects regression models                    184

4.51     Direct and indirect tax revenues and gross fixed capital formation

growth rate estimation                                                                                                185

4.52     Hausman test for fixed and random effects regression models                    187

4.53     Direct and indirect tax revenues and unemployment rate estimation                        188

4.54     Hausman test for fixed and random effects regression models                    191

4.55     Direct and indirect tax revenues and human development index                 192

 

 

 

 


 

 

CHAPTER 1

INTRODUCTION


            1.1           BACKGROUND TO THE STUDY

Revenue generation is critical to the success of any government administration. It is also a necessary factor to the success of all economies of the world irrespective of their developmental stages. One of the various means through which government administrations of different countries have raised revenues at various periods in the human history is taxation. It is an obvious knowledge among tax accounting scholars that taxation is as old as government administration and its earliest forms are seen in the payments of tributes by conquered kingdoms and subjects to the ruling empire as recorded in the Bible (King James Version, 1993, Matt. 17:27); and some historic documents. Carlson (2004) submitted that evidence of the earliest practices of taxation dates back to six thousand years B.C, suggesting the ever relevant and useful nature of taxation to the success of governance and growth of the economy of nations at any time.

Tax in the contemporary sense, can be considered as a compulsory levy imposed on people by the government of their land of residence or income generation; through which the government raises revenue and controls the economic and social welfare of its people. The above definition of tax therefore entails that tax revenues of any government includes all incomes of the government generated through the imposition and collection of taxes within its economy. Although various government administrations in the world have peculiar means of sourcing revenue due to the varying degrees of opportunities available to them, generation of government revenues through taxation has remained handy and relevant over the years. Also, various governments have sought to exercise control over the economic and social activities of its people through tax policies and laws instituted and enforced in the land.

Ortiz-Ospina and Roser (2019) opined that the methods of governments’ revenues generation and spending have a substantial impact on the economic and social development of nations. The above position of the tax scholars underscores the critical relevance of tax revenue to the performance of any nation’s economic indices since taxation is one of the chief sources of government revenues generation in the world. A nation’s economics can be regarded as its condition or position with respect to material wealth which can be measured in numbers and also evidenced in the living standards of its people. Afful (2008) described economy as consisting of economic systems in a given country which includes the production, distribution or trade and consumption of limited goods and services in that country. Economic indices therefore underscore all indicators of economic activity for any group, region or nation. According to Boelhouwer (2010), economic indices of nations form the evidence that back up national progress or otherwise as they reduce the size of national data without dropping the information carried by such variables thus promoting communications and accountability. So the pursuit of economic welfare of any country which forms the primary goal of any well-meaning government administration in the world can be deciphered by its attainment of favourable level of economic condition traceable to such nation’s economic indices.

Economic indices is a compound name that encompasses many factors or measures among which this study covers gross domestic product growth rate, per capita income, gross fixed capital formation growth rate, unemployment rate and human development. These indices capture the progress of nations in economic output growth, individual wealth, investments, employment opportunities or otherwise; and human development.

The possibility of tax revenues contributing massively to the wealth of nations is undoubtedly an obvious certainty because all the sovereign nations of the world have a tax collection system often administered by a designated government establishment created for that particular purpose. However, the transmission of this wealth to account for the welfare of the people in developing nations, in terms of material wealth evident in their economic indices; remains a question of research interest and of which various attempts have been made by scholars. Albeit the results of the research efforts on this topic tend to vary in the same clime and in varying degrees and this is the focal point of our study. The tax systems of a country backed by their policies often accounts for the level of revenue which can be generated from its tax administrative efforts.

The administrative systems of Ghana, Nigeria, Sierra Leone and the Gambia are similar on various grounds which include legal, social and economic aspects. And this is due to the fact that these four countries were colonized by the Britain and their affairs overseen by the government of United Kingdom for nearly a century thus they are regarded as members of the Commonwealth of Nations. Though these countries differ in their political structures, but the foundations of their economic structure which includes sourcing of government revenue and responsible spending were laid by various English leaders who administered the affairs of these countries with the approval of the Queen of England. The legal structures including tax laws in West African Commonwealth countries, some of which are still in use were introduced by these English administrators and the changes made to them have mostly been in terms of reflecting current realities rather than changing them entirely. In addition the early political actors in the administrative systems of these countries were indoctrinated under the tutelage of the English political experts and educationist thus underscoring the fact that West African Commonwealth countries as former ‘apprentices’ of the United Kingdom should have comparable ideology in terms of sourcing government revenues from various means which obviously includes taxation.

This study is a research attempt towards analyzing the influences of tax revenues on the economic indices of West African Commonwealth countries on individual and general bases. The study will analyze the effects of tax revenues on the economic growth of the countries, attempt to ascertain the similarity or otherwise of tax administration of the countries with the ultimate aim of assessing the influence of tax revenues in promoting the economic welfare of West African Commonwealth countries from 1981 – 2018.


            1.2           STATEMENT OF THE PROBLEM

Gross domestic product growth rate as economic growth indicator provides information on the rate at which the size of economic activities within an economy changes from time to time. The efficiency of taxation and particularly the tax structure plays important role in achieving economic growth and fiscal consolidation. Stoilova and Patonov (2012) noted that efficiently designed taxation for any country aims to achieve desired fiscal policy objectives which include allocation, redistribution, and stabilization in the most efficient way by limiting undesired distortions, minimizing the cost of tax collection and promoting economic growth. However, this assertion also contradicts the economic theory which views taxation as being an inhibiting factor to economic growth. This is evident from the report of Organization for Economic Cooperation and Development (2008) which shows that corporate and personal income taxes are out rightly detrimental to growth. A simple production function also reveals that taxation can influence economic growth by its effect on physical capital, human capital and through its effect on the total factor productivity (Stoilova and Patonov, 2012). So if the fiscal policy of government can be linked to the advancement of national economy, it is essential to explore the relationship between tax revenues and economic growth of West African Commonwealth Countries.

Per capita income measures on the average, income made by individuals within a given country. Gale and Samwick (2014) opined that efficient taxation undoubtedly will lead to a larger economy through better economic wellness of individual units within the economy but this is not as simple as it appears since taxation will involve amassing and transferring funds from individual units to the government, so taxation is also viewed from the standpoint of its influence on people’s ability or incentive to earn, invest and save. So government policies on taxation whether to increase taxes or grant tax cuts should be viewed through two conflicting perspectives of which one refers to the individual economic growth of the citizens within that economy whereas the other refers to limitation of disposable private incomes. It therefore forms an issue for research analyses to consider the possible relation between taxation and economic standard of individuals within a given macroeconomic domain.

Tax administration is expected to aid proper and effective implementation of the government fiscal policies through government capital expenditures which are geared towards provision of basic infrastructures and social amenities. The proper execution and attainment of value for money in the capital expenditures will offset in the growth of capital investments of any country in form of additions to the fixed assets in the economy plus changes in the levels of inventories. However, this fact may not be the case for some developing countries which spend more on recurrent items and also have their budget executions depend hugely on revenues from natural resources. Odusila (2006) pointed out that Nigeria as a developing Commonwealth nation depends on taxation and other revenues to fund just about 30% of her budget leaving out 70% on oil revenues alone. Thus the problematic nature of proper implementation and particularly, the analysis of the association between the taxpayers’ funds and growth of capital investments as represented by gross fixed capital formation annual growth becomes a worthwhile exercise.

Taxation as part of government fiscal policy thrusts in every nation is applied by the government in the manipulation of the economy towards achieving social and economic objectives of such government. Any well-meaning government of the people ear marks employment creation as one of its core values; thus it views high unemployment rate as inimical to the progress of its administration. Ozurumba (2012) described fiscal policy package as the government’s management of the economy through the manipulation of its income and spending power to actualize some desired macroeconomic objectives of which minimal unemployment rate is central. So the use of taxpayers’ money to create and influence optimal employment rate within the country is one of the true test of the accountability in the administration of taxes. This suggests that increase of national wealth through taxation should be channeled towards minimizing unemployment rate in any socio-political setting and such possibility deserves an empirical support to complement its theoretical assumption.

The historical account of taxation in the history of man tends to portray tax as an agent of economic development by all standards. It is important to appreciate that economic development sufficiently captured by the human development index is a broader perspective of positive tendency in the economic power of any country than gross domestic product because it cuts across certain important indicators of human progress which includes life expectancy, rate of poverty and education to measure the extent of development which has been witnessed by a particular group of people over the years. Bhartia (2009) and Ola (2007) believe that taxation’s major role in the hands of the administering government is to enable her finance its project which is obviously targeted towards the improvement of the citizens welfare and ultimately lead to economic development of the country. So this study intends to explore the assumption that tax revenues should, in the long run, lead to greater freedom for the people in terms of improved human development index as a combined measure of health, wealth and literacy.

The need for developing countries to boost their tax revenues possibly through improved voluntary compliance to taxation is a panacea for inadequate government funding; however, this possibility is also linked to the general perception of the people regarding government’s responsiveness to their welfare. This also suggests a possible linkage between tax revenue and economic performance of the countries; so this study is an attempt to analyze the influence of tax revenues of West African Commonwealth countries on some of their economic indices.


1.3       OBJECTIVES OF THE STUDY

This study has a broad objective of assessing the influence of tax revenues on economic indices of West African Commonwealth nations. To achieve the broad objective, the specific objectives are to:

i.               Assess the influence of direct tax revenue on the gross domestic product growth rate of West African Commonwealth nations

ii.              Determine the effect of indirect tax revenue on the gross domestic product growth rate of West African Commonwealth nations

iii.            Analyze the effect of direct tax revenue on per capita income of West African Commonwealth nations

iv.            Study the nature and direction of association existing between indirect tax revenue and per capita income of West African Commonwealth nations

v.              Analyze the effect of direct tax revenue on the gross fixed capital formation annual growth of West African Commonwealth nations

vi.            Assess the effect of indirect tax revenue on the gross fixed capital formation annual growth of West African Commonwealth nations

vii.           Assess the influence of direct tax revenue on the unemployment rates of West African Commonwealth nations

viii.         Analyze the effect of indirect tax revenue on the unemployment rates of West African Commonwealth nations

ix.            Research on the influence of direct tax revenue on human development indices of West African Commonwealth nations

x.              Explore the possible association between indirect tax revenue and human development indices of West African Commonwealth nations


1.4             RESEARCH QUESTIONS

The following questions were drawn from the specific objectives in pursuance of the broad objective of this dissertation:

i.               What is the effect of direct tax revenue on the gross domestic product growth rate of West African Commonwealth nations?

ii.              What is the effect of indirect tax revenue on the gross domestic product growth rate of West African Commonwealth nations?

iii.            What is the effect of direct tax revenue on per capita income of West African Commonwealth nations?

iv.            How does indirect tax revenue associate with per capita income of West African Commonwealth nations?

v.              What is the effect of direct tax revenue on annual growth rate of gross fixed capital formation of West African Commonwealth nations?

vi.            What is the effect of indirect tax revenue on the annual growth rate of gross fixed capital formation of West African Commonwealth nations?

vii.           How does direct tax revenue associate with unemployment rates of West African Commonwealth nations?

viii.         How does indirect tax revenue associate with the unemployment rates of West African Commonwealth nations?

ix.            What is the effect of direct tax revenue on human development index of West African Commonwealth nations?

x.              What is the effect of human development index of West African Commonwealth nations on their indirect tax revenue?


1.5       RESEARCH HYPOTHESES

To answer the research questions of this study, the following hypotheses were formulated and presented in their null forms:

      i.         Direct tax revenue does not have significant influence on the gross domestic product growth rate of West African Commonwealth Nations

     ii.         Indirect tax revenue does not have significant influence on the gross domestic product growth rate of West African Commonwealth Nations

   iii.         Direct tax revenue does not significantly influence per capita income of West African Commonwealth Nations

   iv.         Indirect tax revenue does not significantly influence per capita income of West African Commonwealth Nations

     v.         Direct tax revenue does not have significant effect on the gross fixed capital formation annual growth of West African Commonwealth Nations

   vi.         Indirect tax revenue does not have significant effect on the gross fixed capital formation annual growth of West African Commonwealth Nations

  vii.         Direct tax revenue has no significant effect on the unemployment rates of West African Commonwealth Nations

viii.         Indirect tax revenue has no significant effect on the unemployment rates of West African Commonwealth Nations

   ix.         Direct tax revenue has no significant effect human development indices of West African Commonwealth Nations

     x.         Indirect tax revenue has no significant effect on human development indices of West African Commonwealth Nations.


1.6       SIGNIFICANCE OF THE STUDY

It is expected that every academic exercise of this manner provides solution to certain problems in the society as well as additional insight to the body of knowledge hence this dissertation will attempt to do the same.

i.               Governments: this study will provide an empirical explanation to the behavior of some selected economic growth and development indicators as individual variables in response to changes that occur in the direct and indirect tax revenues of the West African commonwealth nations as developing countries thus bringing to limelight the performances of the various government administrations in ensuring proper collection of government revenues with respect to taxation, and further converting these revenues to economic progress and development through proper accountability and effective development plans.

ii.              Academics and Researchers: various scholars at different junctures have sought to establish a statistical link between tax revenues and economic growth of some West African countries separately. Most research works try to concentrate either on a particular tax type or class of tax. This work will attempt to take a holistic approach towards all the taxes administered and accounted for by the central tax revenue services of both countries, while studying their effects on different selected measures of economic growth and development, as well as make comparisons for the four countries. The study will therefore attempt to see the effectiveness of taxation towards economic growth and development of West African Commonwealth nations as former colonists of the United Kingdom. So, it is believed that this study will provide a fulcrum for appreciating the efforts of the various governments in harnessing the benefits accruable to them from taxation towards the bettering of lives and progress of their economies asides the popular mere establishment of statistical link between tax and economic indices of developing countries. This is a step beyond what is currently and popularly obtained in the accounting research.

iii.            Taxpayers: the taxpayers and citizens of West African commonwealth nations will be able to appreciate the role of taxation in ensuring that most public goods which is outside the wherewithal of an average person is provided for by the government. They will also see the need for being tax compliant if it is established in this work that taxation promotes their economic welfare especially as all West African commonwealth nations have lower rate of voluntary tax compliance (McNabb and LeMay-Boucher; 2014)  as compared to the United Kingdom who is their former colonialist.


1.7       SCOPE OF THE STUDY

This study will cover all taxes administered and reported by the Revenue Services of Ghana, Nigeria, Sierra Leone and The Gambia which will be categorized into direct and indirect taxes to provide a comparable stance for all the countries.

The study will also be covering a thirty-eight years period starting from 1980 – 2018 except in the cases of some variables which have not been compiled nor reported in the 1980s such as unemployment rate for Nigeria and human development index for the countries in this study.

Asides data, the study will also cover the concepts and theories of taxation, economic and development with the aim of providing adequate insight on the topic of this research exercise.


1.8       ASSUMPTION OF THE STUDY

The study assumes that tax revenue represents the income generated by the governments of the West African Commonwealth countries from tax imposition which forms the a tool in their hands to provide for the welfare of their citizens. This dissertation also assumes that tax revenue will ordinarily be applied to boost economic development as well as its administration utilized to control economic factors.


1.9       OPERATIONAL DEFINITION OF TERMS

1.     Commonwealth countries: For the purpose of this dissertation, commonwealth countries will be described as the former colonies of the Great Britain. These countries have continued to associate with United Kingdom and share cordial diplomatic ties with the country.

2.     West African Commonwealth countries: Though some members of the Commonwealth nations were not colonized by the Britain, the study terms all the former colonies of the Britain located on the western region of Africa as the West African Commonwealth countries. The countries that fit in to this description are; the Gambia, Ghana, Nigeria and Sierra Leone.

3.     Altruistic behavior: the feeling of being responsible by doing compliant to civic and legal responsibilities due to the trust and confidence entrusted to another by virtue of his past or present abilities

4.     Developing countries: These are countries with low capacity of industrialization, technology and human development index. This study regards all the West African Commonwealth countries also as developing nations.

5.     Commodity taxation: This is the process of administering tax on goods and services. Commodity taxation produces indirect tax revenues which is the opposite of direct tax revenue.



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