Tax Revenue in Emerging Markets and Developing Countries: Does Digital Finance Matter?
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Working Paper 194
This paper investigates whether adopting mobile money services influences non resource tax revenues in emerging markets and developing countries. Using a sample of 97 countries over the period 1990–2021, our empirical analyses, based on instrumental variables, system-GMM, and endogenous switching regression methods, suggest that digital finance leads to more tax revenue. We also find that bill payments, merchant payments, person-to-person payments, and person-to government payments have a greater impact on tax revenues than other mobile money services. The potential positive impact mechanisms are the decline of the informal sector, the reduction of corruption, and the facilitation of international remittance inflows.
Tania M. Azoa Balengla is a PhD Student at the University of Yaoundé II
(Cameroon). She is also a researcher at the Center for Studies and Research in
Economics and Management (CEREG) and a member of the ECA Young
Economist Network (ECA-YEN). She holds a master’s degree in Ingeniérie
Économique et Financière from the University of Yaoundé II and another master’s
degree in Monnaie Banque, Finance et Assurance in partnership with the
University of Rennes (France).
Joseph Keneck Massil is currently an Associate Professor in Economics and
Head of the Department of Public Economics at the University of Yaoundé II
(Cameroon). He is also a research associate at the UMI Source research centre
(University of Versailles, France). He holds a PhD in Economics from the
University of Paris Nanterre.
Alphonse Noah is an Associate Professor in Economics at the Faculty of Law
and Economics at the University of Limoges (France), and a member of the
Laboratoire d’Analyse et de Prospective Economiques (LAPE) research centre.
His research interests include development financing issues, digital finance, fiscal
policy, informality, and climate change.
Citation: Azoa Balengla, T.M.; Keneck Massil, J.; Noah, A. and Nomo Belaya, B.C. (2024) Tax Revenue in Emerging Markets and Developing Countries: Does Digital Finance Matter?, ICTD Working Paper 194, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.042
