Abstract
This study examined the effect of tax reforms on fiscal policies in six selected West African countries – Nigeria, Ghana, Senegal, Cote d’Ivoire, The Gambia, and Sierra Leone. Ex-post facto research design was used and data were obtained covering the period 1995 to 2024. Employing principal component analysis (PCA) alongside panel regression techniques, the study identified five tax reform variables such as tax revenue, tax rates, tax compliance cost, tax administrative cost, and tax base broadening. The findings revealed that tax revenue is the most significant predictor of fiscal policies, accounting for 32.8% of the total variation, emphasizing its critical role in enhancing government budget balance and reducing income inequality. The results further demonstrated that tax administrative cost significantly affects fiscal policies, underscoring the importance of efficient tax administration systems. However, tax rates, tax compliance cost, and tax base broadening were found to have no significant effect on fiscal policies in the selected countries. These outcomes highlight the necessity for regional cooperation in improving tax revenue mobilization and the efficiency of tax administration. The study fills a gap in accounting literature by providing a multicountry analysis of tax reforms and fiscal policies in West Africa, offering valuable insights for policymakers aiming to strengthen fiscal stability and socio-economic development through effective tax reforms.
Keywords: Tax Base Broadening, Tax Compliance, Tax Rates, Tax Reform, Tax Revenue.