The Impact of Tax Revenues on Economic Growth in Sudan during the Period 1990-2021

Abstract

The study aimed to measure the impact of both direct and indirect taxes on economic growth in Sudan during the period from 1990 to 2021. The econometric approach was adopted to estimate the regression parameters between the independent variables—namely, direct and indirect taxes—and the dependent variable, represented by real Gross Domestic Product (GDP). This was done through unit root and cointegration tests of the time series data using the Autoregressive Distributed Lag (ARDL) methodology. The study's data were obtained from various reports of the Central Bank of Sudan. The study reached the following findings: an increase in direct taxes led to a rise in real GDP in the short term but a decline in the long term. Meanwhile, the coefficient of indirect taxes showed a statistically significant positive effect in the long term, while no significant effect was observed in the short term. The study recommended activating the role of taxation and encouraging taxpayers by exempting projects that contribute to employing a larger number of unemployed individuals, highlighting the importance of work, and supporting scientific institutions that promote and support agriculture and industry. It also recommended curbing the growth of consumption, especially of luxury goods, and ensuring a conducive economic environment.