Economic Impact of Tax Reforms in Developing Economies: Analyzing Growth, inequalities, Revenue, and Policy Moderators.
Publication Date: 07/08/2025
Author(s): Emmanuel Peprah, Evans O. N. D. Ocansey (Ph.D.), Emmanuel Kwame Asirifi.
Volume/Issue: Volume 8, Issue 3 (2025)
Page No: 91-116
Journal: African Journal of Accounting and Financial Research (AJAFR)
Abstract:
Purpose: The major goal of this research is to critically assess the economic impact of tax reforms in developing countries, with a particular emphasis on how various types of tax adjustments affect revenue mobilization, equity, and long-term economic growth. The study aims to integrate existing literature to identify major trends, conflicts, and policy gaps in the implementation of tax changes, particularly in the context of African economies like Ghana. Design/Methodology/Approach: To ensure emphasis and relevance, this study uses a Traditional Literature Review (TLR) strategy, guided by SPIDER framework features. A total of 56 publications published between 1943 and 2025 were reviewed, with Boolean operators and MeSH phrases used to search databases such as Crossref, Google Scholar, and Europe PMC. The inclusion criteria centered on studies about tax reform types, tax policy results, revenue effects, and inequality. Quality evaluation was based on citation frequency each year, authorship, publication credibility, and relevance to the research issues. Findings: The research reveals widespread agreement that well-designed tax reforms, particularly those underpinned by strong institutions and digital systems, can greatly increase domestic revenue mobilization and drive economic growth. However, the gains of reforms are frequently negated by continuing tax disparities, tax enforcement, and under taxation of the informal sector. Empirical data also show that financial growth and democratic governance are crucial in increasing the effectiveness of tax strategies. Despite substantial improvements, there are still gaps in reform type disaggregation, longitudinal data, and local government research.
Keywords:
Revenue Mobilization, Tax Inequality, Tax Incentive, Tax Administration, Tax Reforms.
