PhD defence Kwami Obossou

Kwami Obossou
Cerdi-UCA-CNRS
Togo Revenue Authority (OTR)

Examiners

Akoete Ega Agbodji, Professor, Université de Lomé
Arnaud Bourgain, Professor Université du Luxembourg
Jean-Francois Brun, Professor, Université Clermont Auvergne
Fouzi Mourji, Professor, Université Hassan II
Pascale Phelinas, Research Director, IRD

Abstract

Faced with the decline in public development assistance and the challenges of financing the sustainable development objectives by 2030, the mobilization of internal resources remains the only credible alternative to guarantee stable sources for the national budget. However, developing countries are faced with a low level of tax revenue mobilization which remains below 20% of GDP compared to at least 33% in developed countries. Among the sectors expected to contribute to broadening the tax base is the financial sector which, due to its importance and its multiple functions in the economy, constitutes a tax potential that is under-exploited by developing countries. Thus, the objective of this thesis is to analyze the contribution of the banking sector to the mobilization of tax revenues in developing countries on the one hand and on the other hand to show how taxation could compromise the level of performance of banks. This thesis is composed of three (03) essays.

The first essay is devoted to analyzing the impact of access to taxpayers' banking information on tax revenues both in terms of direct taxes and indirect taxes. From a sample of 62 developing countries over the period from 1995 to 2016 and using the generalized method of moments, we showed that an increase of 1 point in the index of access to banking information leads to an increase of 1.1 percentage points of the tax pressure rate. This effect is 2.0 percentage points for direct taxes and 0.98 points for indirect taxes. These effects are reinforced within the framework of the promotion of good governance and the participation of countries in public finance consolidation programs generally carried out by the IMF. In the second essay, it is a question of analyzing the relationship between taxation and the financial intermediation activity of banks in WAEMU member countries. Thus, by applying the fixed effect estimation method to a panel of eight (08) WAEMU countries over the period 2000-2018, we have shown that the taxation applied to banks has a crowding out effect on the banking intermediation in the case of WAEMU countries. Thus, an increase of 1% in the amount of taxes on profits and other levies paid by banks (without the tax on financial activities) reduces the credit granted to the private sector by 0.24%. The third essay deals with the problem of imposing value added tax (VAT) on banking operations. VAT, which is an indirect tax, represents in most countries that have adopted it, almost half of the tax revenue collected by tax administrations. But, it’s subject to several exemptions which hamper its performance. This is the case for banks where operations are exempt from VAT. This exemption, which compromises the economic neutrality of VAT, also leads to distortions and consequences on banking services. Despite these reasons, some countries have introduced VAT taxation of banking operations into their legislation in order to reduce distortions and residual VAT. Thus, the estimate carried out for the case of Togo using the turnover of banks as a taxable base over the period 2015-2018 shows that the VAT imposition of banking operations could generate, ceteris paribus, tax revenue additional of 11.1 billion FCFA per year, or 0.3% of GDP compared to the tax on financial activities. The imposition of VAT on banking operations in Togo could contribute significantly to increasing tax revenues while restoring the normal functioning mechanism of VAT in the economy.

Keywords

Pays en développement, taxe sur la valeur ajoutée, TVA, recettes fiscales, crédit bancaire, opérations de banque, exonération.