Category Issue 5

Can Remittance Boost Tax Revenue Collections: A case study of Zimbabwe

Abstract – The study investigates whether remittances can help developing countries increase their tax revenue collections. For the period from the second quarter of 2009 through the fourth quarter of 2017, the study used quarterly secondary time series analysis. The study used the Ordinary Least Squares (OLS) methodology to construct two basic regression models that take into account two major tax heads that are linked to remittances: income tax and value-added tax. Remittances are measured using three different methods: current period remittances, one period lagged remittances, and remittance squared. Remittances boost both income tax and VAT, according to empirical evidence derived…