The Impact of Trade Policy Reforms on International Tax Revenue in Ghana

ABSTRACT

The trade sector is generally considered as one that can set the stage for the development of an economy, as evidenced by the immense economic developments attained by Japan and China as a result of their good performance in the trade sectors. Ghana had hopes of achieving such success in the trade sector owing to the abundance of natural resources in the country but within 25 years of independence, the economy had cave in as a result of poor economic performance in the trade sector. Reforms were put in place to salvage the situation with minimal success. This study analyses the impact of trade policy reforms on international trade tax revenue in Ghana from the period 1980 to 2017. The Autoregressive Distributive Lag (ARDL) model is employed to estimate the long-run relationship among the variables and further, the short-run dynamics of the variables are examined using the Error Correction Model (ECM). The empirical results show that whereas trade openness has a positive and significant effect on international trade tax revenue in both the long-run and short-run models, the average tariff rate influences international trade tax revenue positively in the short-run but adversely in the long-run. Also, a Pairwise Granger Causality test is performed to determine the causal relationship between trade openness, average tariff rate, and international trade tax revenue, we found unidirectional causality running from trade openness to international trade tax revenue. In conclusion, the results suggest that Ghana should utilize the benefits accompanying trade policy reforms without apprehension about its effects on trade tax revenue. DEDIC

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APA

ASOMANING, A (2021). The Impact of Trade Policy Reforms on International Tax Revenue in Ghana. Afribary. Retrieved from https://afribary.com/works/the-impact-of-trade-policy-reforms-on-international-tax-revenue-in-ghana

MLA 8th

ASOMANING, AFUA "The Impact of Trade Policy Reforms on International Tax Revenue in Ghana" Afribary. Afribary, 07 Apr. 2021, https://afribary.com/works/the-impact-of-trade-policy-reforms-on-international-tax-revenue-in-ghana. Accessed 23 Jul. 2024.

MLA7

ASOMANING, AFUA . "The Impact of Trade Policy Reforms on International Tax Revenue in Ghana". Afribary, Afribary, 07 Apr. 2021. Web. 23 Jul. 2024. < https://afribary.com/works/the-impact-of-trade-policy-reforms-on-international-tax-revenue-in-ghana >.

Chicago

ASOMANING, AFUA . "The Impact of Trade Policy Reforms on International Tax Revenue in Ghana" Afribary (2021). Accessed July 23, 2024. https://afribary.com/works/the-impact-of-trade-policy-reforms-on-international-tax-revenue-in-ghana