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Taxes, institutions, and illicit financial flows in Africa

Author

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  • Isaac Bentum-Ennin
  • Samuel Mensah
  • Evans Kulu

Abstract

This study investigates the effects of taxes and quality institutions on illicit financial flows (IFFs) in Africa. An annual panel data from 30 countries for the period, 2008 to 2017, was employed. The estimated general method of moments models revealed that increases in taxes on international trade provide an incentive for IFFs but this effect is ameliorated or rendered insignificant in the presence of quality institutions, especially, control of corruption, voice and accountability, rule of law, and regulatory quality. There is a need for governments in African countries to strengthen these institutions while minimising international trade taxes in the quest to reduce IFFs.

Suggested Citation

  • Isaac Bentum-Ennin & Samuel Mensah & Evans Kulu, 2024. "Taxes, institutions, and illicit financial flows in Africa," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 31(1), pages 118-135.
    • Handle: RePEc:ids:gbusec:v:31:y:2024:i:1:p:118-135
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