Theodora Aba Kwegyeba Brown, Godfred A. Bokpin and Emmanuel Sarpong-Kumankoma
This study aims to determine how taxes can be used to bridge income inequality gap in sub-Saharan Africa (SSA).
Abstract
Purpose
This study aims to determine how taxes can be used to bridge income inequality gap in sub-Saharan Africa (SSA).
Design/methodology/approach
A panel data set of 36 SSA countries was analysed using generalised method of moments.
Findings
The results suggest that an increase in direct taxes relative to indirect taxes has a positive significant impact on income inequality. This is mostly due to the progressive nature of direct taxes as compared to indirect taxes.
Originality/value
This research contributes to the scant literature on how specific tax components affect income inequality, especially in developing countries.