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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Short-Run Shifting of Manufacturer's Sales Taxes in Kenya: Revisited
Author:Mwega, F.M.ISNI
Year:1988
Periodical:Eastern Africa Economic Review
Volume:4
Issue:1
Period:June
Pages:42-47
Language:English
Geographic term:Kenya
Subjects:sales tax
Economics and Trade
Abstract:In recent studies, R.J. Brent (1979, 1986) used a modified Krzyzaniak-Musgrave (1963) model to estimate the extent to which the Kenya manufacturers' sales tax was shifted from profits during 1974-1975. From a static model he concluded that the tax was fully shifted. From a dynamized model incorporating lagged reactions to taxation, he concluded that the tax was unshifted. Since this contradicts both policy thinking and the usual assumptions in the economic literature, the present paper examines the robustness of these results utilizing a less ad hoc model and more comprehensive data for 1974, 1975 and 1976. The analysis consistently supports the zero shifting hypothesis post-1973. Misspecification of the Brent model caused it to support the full shifting hypothesis in 1974, the first complete year of the sales tax in Kenya. Bibliogr., notes.
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