THE IMPACT OF CAPITAL MOBILITY ON DOMESTIC REVENUE IN SUBSAHARAN AFRICA

Abstract

This paper examines the impact of capita mobility on domestic revenue in developing countries. It discusses some ideas about how we should look at international tax policy in the face of reality of globalization. The process of improving tax system, illicit capital flight and trade liberalization are part of the challenges facing developing countries in the world today. The method employed is exploratory based on the theoretical review of the various authors’ work. It was found out that large corporations and wealthy individuals are increasingly avoiding their obligation to contribute to the society through taxation as a result of illicit capital flight and tax incentives granted. It was therefore recommended that governments should discourage tax incentives in attracting Foreign Direct Investment, increase revenues, refocus government spending on public priorities and introduce more stringent taxes on environmental pollution.