Ease of Doing Business and Taxes from Exports in Selected African Countries

Abstract

Export taxes play a pivotal role in revenue mobilization and economic development in Africa. However, inefficiencies in the business regulatory environment can influence the ability of governments to generate export-related tax revenues. This study therefore examined how the ease of doing business (EoDB) affects taxes derived from exports in selected African countries by evaluating key institutional and regulatory indicators. The study adopted a quantitative research design using panel data from 39 African countries covering the period 2014–2023. Key indicators examined include time to start a business, access to electricity, property registration procedures, tax compliance time, border compliance costs, and insolvency resolution efficiency. The analysis employs linear regression with panel-corrected standard errors (PCSEs) to address potential heteroskedasticity and contemporaneous correlation within the panel dataset. The results revealed that several regulatory bottlenecks significantly reduce export tax revenues. Specifically, the number of startup procedures (-0.481, p < 0.01), delays in property registration (-0.006, p < 0.05), and border compliance costs (-0.001, p < 0.01) negatively affect export tax collections. In contrast, access to electricity (0.038, p < 0.01) and tax compliance time (0.010, p < 0.01) positively influence export tax revenue generation. Furthermore, insolvency resolution time (-0.108, p < 0.01) is found to significantly reduce export tax contributions. The findings highlight the need for African governments to streamline regulatory procedures, improve infrastructure such as electricity supply, and strengthen legal frameworks governing business operations and insolvency processes. Enhancing institutional efficiency and reducing administrative barriers can foster export growth, increase compliance, and improve tax revenue mobilization from export activities. The study contributes to the literature by linking ease of doing business indicators with export tax revenue performance across African countries. It emphasized the role of institutional efficiency in optimizing export-based tax revenue.