Analysis of taxes in the SADC countries (2000-2022). A static approach using the ordinary least squares method

Abstract

We used the Ordinary Least Squares (OLS) panel data technique to examine taxes in SADC countries over the period 2000-2022 in 11 member countries, such as: South Africa, Angola, Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Tanzania, Zambia and Zimbabwe. In the model, the dependent variable is taxes on goods and services and the dependent variables are inflation, GDP, wages, real interest rates, population, military spending, manufacturing value added and Foreign Direct Investment. Despite the existence of heteroscedasticity in the model, the results show that all the independent variables in the model are statistically significant at the 1% level. Finally, with regard to magnitude, on the negative side, the results suggest that on average, a 1% increase in inflation, interest rates, military spending and manufacturing decreased taxes by 0.59, 0.08, 1.81 and 0.09 percentage points, respectively, and on the positive side, the results indicate that a 1% increase in wages, population and FDI increased taxes by 0.22, 5.80 and 0.95 percentage points, respectively.