Effect of Reforms on Tax Revenue Performance in Senegal

The tax administration in Senegal has experienced several reforms in the period 1970- 2014, but little is known about the performance of those reforms in terms of tax revenue mobilization. The literature on what drives domestic resource mobilization has indeed paid little attention to reform as a determinant of tax revenue. Considering various aspects of reforms in the tax administration, including tax-related reforms and institutions related reforms, and using various econometric methods based on ordinary least squares, instrumental variable two-stage least squares, and iteratively reweighted least squares, the paper assesses whether reforms are important for increasing tax revenue. The results show that, tax reforms, institutional reforms, and all reforms combined have contributed to significantly increased tax revenue performance. The key implication is that more tax-related reforms and more institutions-related reforms are crucial to sustainably improved tax revenue mobilization.