Revenue Growth As Determinant Of Gross Domestic Economics Essay

Since the terminal of 2nd universe war we have witnessed a figure of major alterations in the revenue enhancement system every bit good as the revenue enhancement mix of different states overtime.These alterations have non merely been due to fluctuations in major economic variables, but besides due to a assortment of factors including alterations in the construction and policies of authoritiess, predominating economic fortunes and the overall societal and political environment and political orientations. In the past three decennaries or so a figure of research workers have examined the tendencies in gross of different states at different phases of economic development utilizing revenue enhancement ratio, defined as the ratio of entire revenue enhancement grosss to GDP. ( Martin and Lewis,1956 ; Shin,1969 ; Bahl, 1971 ; and Chelliah, 1975 ) suggest that the higher income, grade of openness, degree and grade of industrialisation and the degree of urbanisation, all these lead to the higher overall revenue enhancement ratio.This amounts to a positive relationship between economic development ( GDP ) and gross growing. Other surveies based on revenue enhancement component/structure alterations has concentrated on the relationship between revenue enhancement construction and the economic construction every bit related to the degree of economic development ( Abizadeh, 1979 ; Chelliah, 1989 ) .These surveies conclude that, based on both historical and cross-sectional empirical analysis, the portion of indirect revenue enhancements to entire revenue enhancement grosss fell while that of direct revenue enhancements rose with economic development, taking to the transmutation of the economicstructure. ( Chelliah, 1989 ) .

1.1 Statement of the job

Tax has been the major beginning of gross growing in the development and developed states and it leads to the addition or lessening in gross and Gross domestic merchandise ( GDP ) . Empirical surveies found that GDP varies in different period depend on gross growing. Uhliga and Yanagawa ( 1999 ) found that income revenue enhancements have important and related with economic growing ( GDP ) in the state, and farther explicate GDP has grown by 1.7 % in the developed states.

Hinrisch ( 1966 ) and Musgrave ( 1969 ) examined the relationship between GDP and gross ; found that GDP was comparatively low by 2 % in the developed states.

Many empirical surveies have been done in different environment compared to Tanzania and, the consequence found from those surveies might non be the instance in Tanzanian environment because gross aggregation policies differ from state to state.

In Tanzania statistics shows ; GDP varies in different period illustration in 2009, GDP grow by 6.7 % and 2010, GDP grow by 6.4 % and it does non proved if the addition or lessening is caused by gross growing ( http//www.economywatch.com.statistics/ country/Tanzania ) .

Due to the above observations the research worker intends to carry on a survey which will take to detecting overall tendency of authorities gross and suggest revenue enhancement mix that is more appropriate to revenue enhancement construction and the GDP growing ; and therefore possible for authorities to happen alternate beginning of grosss taking to alter in revenue enhancement construction, hence beef uping planetary fight.

1.2 Aims of the Study

1.2.1 General Objective

To analyze whether gross growing are the determiner of gross domestic merchandise ( GDP ) in Tanzania.

1.2.2 Specific Aims

To analyze how VAT find the Gross domestic merchandise ( GDP ) in Tanzania.

To analyze consequence of income revenue enhancements on GDP growing.

To happen out whether usage revenue enhancements has impact on GDP growing.

To set up the relationship between entire gross and GDP.

1.3 Research Hypothesis

H1O: VAT is a determiner of GDP.

H1A: VAT is non a GDP determiner.

Water: Income revenue enhancements have an impact to GDP growing.

H2A: Income revenue enhancements do non hold impact to the GDP growing.

H3O: Custom revenue enhancements have an impact to the GDP.

H3A: Custom revenue enhancements do non hold impact to the GDP.

H4O: There is positive relationship between entire gross growing and GDP.

H4A: There is negative relationship between entire gross growing and GDP.

1.4 Significance of the Study

This survey is of great importance since there still no clear reply on whether gross growing is the deciding GDP growing. Therefore findings of the survey will cast visible radiation on understanding the factors that accounted for the determiners of GDP in Tanzania. In bend this will assist determination shapers in Tanzania and abroad as they will hold light on the capable affair prior doing their determinations.

This survey will add to bing literature on GDP determiners in Tanzania.

The survey will make a platform from which other research workers may come up with new thoughts.

1.5 Restriction of the survey.

The survey is likely to meet several restrictions which are summarized into two chief 1s. The research worker is anticipating to utilize informations from different beginnings. This has the possible impact on the consequences and illation since every beginning has its ain manner of roll uping and analysing informations.

The research worker will confront the job of clip bound when carry oning the research. The research is supposed to be conducted within 16 hebdomads. Due to this constriction, the research worker will minimise the sample and utilize the secondary informations.

Chapter TWO

2.0 Literature reappraisal

2.1.1 Meanings of Gross:

Hartman ( 1998 ) ; define Revenue as influxs and other sweetening of assets of an entity or colony of its liabilities or a combination of both from presenting or bring forthing goods, rendering services or other activities that constitute the entities ongoing major or cardinal operations.

Walter ( 1986 ) Gross is the monetary value of goods or services rendered during a given period of clip. The gross of any given period of clip is equal to inflow hard currency and receivables for gross revenues made at that clip. When concern rendered services to its clients or derivers ware to them it either receives immediate payment in hard currency or acquires history receivables. Therefore either hard currency or receivables both are grosss.

Taylor ( 1965 ) Gross grosss are grosss which increase the useable financess of exchequer without increasing its debt duty or which cut down its debt duties without cut downing its useable financess.

Bradley, ( 1993 ) .Defined gross as the monetary value of merchandise multiplied by the measure sold in a given clip period. Grosss are equal to the revenue enhancement rates times the revenue enhancement base and addition in the revenue enhancement rates consequences in lessening in revenue enhancement base.

Kermit and Pyle ( 1998 ) . Gross is influxs of hard currency or other belongingss received in exchange for goods or services provided to clients, rent, dividends and involvement earned are besides grosss. They continue to reason that, grosss are influxs of assets non needfully hard currency in exchange for goods and services.

Kieso ( 1990 ) , Revenue is addition in economic resources, either by manner of influxs or sweetenings of assets or decrease of liabilities ensuing from ordinary activities of an entity, usually from the gross revenues of goods, the rendition of services or the usage by others of entities resources giving rent, royalties, involvement and dividends. continues to stress gross are influxs of hard currency, receivables or other considerations originating in the class of the ordinary activities of an endeavor, usually from the sale of goods.

2.1.2 Important of gross constituent:

Mult and Grubert, ( 2005 ) ; argue that revenue enhancement is the major beginning of gross and farther explicate revenue enhancement as general instrument used to modulate the economic system and it serves as national budget chief beginning of income which in bend allow the budget to stabilise the society and develop the national economic system. In this instance revenue enhancement has chief intent which includes addition gross aggregation, redistribution, reprizing and representation.

The authorities raises gross for assortment of grounds

To supply community services. Like defence and security, societal comfortss and public assistance.

To advance an just distribution of wealth by and large by agencies of progressive revenue enhancement this is just and may be direct or indirect.

To command rising prices. That is to modulate and stabilise the economic system demand and supply and to modulate allotment of resources.

To keep sound balance of payment by promoting exports and detering exports.

2.1.3 Meaning of GDP and its measuring

Stanford ( 2008 ) ; Define Gross Domestic Product ( GDP ) as equal to sum of all value goods and services produced for money in an economic system, evaluated at their market monetary values. GDP excludes the value of unpaid work ( such as caring generative labor performed in the place ) . GDP is calculated by adding up the value-added at each phase of production ( subtracting the cost of produced inputs and stuffs purchased from an industry ‘s providers ) .

( QuickMBA,2010 ) , define GDP as the market value of good and service produced by a state and one manner of its measuring is expenditure method where all outgo in the state is added. Is calculated as follows

GDP = Consumption+ Investment+ Government purchases+ Net export.

( Haggart, 2000 ) , Define gross domestic merchandise ( GDP ) as the step of the entire value of all concluding production in the state. It can be calculated in three ways ; by adding up income and all net incomes received from production of goods and services by adding up outgo on good and service ( adding money spent on export and deducting money spent on imports ) , by adding up the value added by labor and capital when inputs purchased from other manufacturers are transformed into end product. It measures flow through the economic system production non stock, such as wealth and already bing capital equipment and it does mensurate fiscal dealing or gift where merely money alterations custodies.

Harmonizing ( Lequiller and Blades, 2006 ) , Gross domestic merchandise combines in a individual figure the entire market value of all concluding goods and services produced within a state ‘s economic district during a given period. It is the most often used index of market activity and the alteration in GDP over clip is the principalindicator of economic growing. GDP lies at the top of the full System of National Accounts, and its methodological analysis is strictly defined and standardised, enabling international comparing and collection.

However Stanford ( 2008 ) Explain the classs of Gross domestic merchandise ( GDP ) , Nominal gross domestic merchandise it is the simplest and most direct step of GDP, expressed in dollar footings.

Real gross domestic merchandise it is the value of GDP, adjusted for alterations in the overall degree of monetary values in an economic system. Real GDP must be expressed in footings of a “ basal twelvemonth. ” The mean degree of monetary values is measured get downing at that basal twelvemonth.

Gross Domestic Product, Deflator: It is a monetary value index which reflects the mean addition in the monetary values of all domestic merchandise. The GDP deflator equals the ratio of nominal GDP to existent GDP. The GDP deflator is an alternate step of rising prices ( although alterations in the consumer monetary value index are considered a more accurate index of “ true ” rising prices thanchanges in the GDP deflator ) . GDP deflators can be calculated for each class of outgo in entire GDP ( including ingestion, investing, exports, and imports ) .

Gross Domestic Product, Per Capital, It is the degree of GDP divided by population of a state or part. Changes in existent GDP per capital over clip are frequently interpreted as a step of alterations in the mean criterion of life of a state, although this is misdirecting ( because it does n’t account for differences in the distribution of income across factors of production and persons, and it does n’t see the value of unpaid labor or leisure clip ) .

2.1.4 Effect of gross constituent into GDP

Burgess and Stern ( 1993 ) examine the hindrances on taxing personal income in developing states are many including jobs of income measuring, administrative capableness, low literacy and hapless accounting, an economic construction dominated by agribusiness and little graduated table frequently unregistered endeavors this brought hard on gross aggregation though revenue enhancement ; illustration brought hard to revenue enhancement incomes straight. These jobs cause to bring forth more spread between targeted gross and collected gross thereby consequence gross domestic merchandise.

Marsden ( 1983 ) mentioned that alteration in revenue enhancement policy will impact the economic development. Harmonizing to Burns and Gober ( 1997 ) ; states economic system may impact otherwise due to any alterations in each revenue enhancement constituents. Based on their determination, excise revenue enhancements as per centum of Ireland ‘s entire gross was four times the degree in U.S.Change in economic growing depends on each revenue enhancement construction ( Gold, 1991 ) .

Chang et.al ( 1999 ) the survey explicate on how authorities collects income revenue enhancement gross and transforms it into a productive public outgo which brought an impact to the gross domestic merchandise ( GDP ) in the developing countries.The survey assumes income revenue enhancement gross impact economic growing.

Mahdavi ( 2008 ) suggest that the consequence of rise in entire revenue enhancement gross will cut down the growing in developing countries.Due to the financial crisis in the past several decennaries, several developing states had to resuscitate its economic system by altering the degree of revenue enhancements.

Lucas ( 1990 ) calculated that a revenue-neutral alteration that eliminated all capital income revenue enhancements while raising labour income revenue enhancements would increase growing domestic merchandise ( GDP ) negligibly.

Leuthold ( 1991 ) examined the consequence of revenue enhancement into GDP from 1973 to 1981, he explain, the portion of agribusiness will impact the degree of revenue enhancement and robust the relationship of entire revenue enhancement gross into direct and indirect revenue enhancements. The degree of revenue enhancements will give different consequence to economic growing and other indexs caused by the macroeconomic variables such as the extent of corruptness and adversely affected by the rising prices rate in nine African states over the period 1985-96, ( Ghura, 1998 ) .

Jones, Manuelli, and Rossi ( 1993 ) calculated that extinguishing all distorting revenue enhancements would raise mean one-year growing domestic merchandise ( GDP ) rates by a humongous four to eight per centum points. ( decrease indistortionary revenue enhancement rates in these theoretical accounts, instead than complete riddance of distortionary revenue enhancements, would be expected to hold a smaller positive consequence oneconomic growing ) .

Agbeyegbe ( 2004 ) used the same geographical sample which is 22 states in sub-Saharan Africa from 1980 to 1996, he explain the consequence of revenue enhancement gross on trade liberalisation and focused on three constituents in entire revenue enhancement gross ( revenue enhancements on income, international trade and goods and services revenue enhancement ) which are all as ratio of GDP and says that there is weak relation among these three revenue enhancement types.

2.1.5 Theory of Growth domestic merchandise ( GDP )

2.1.5.1 Keynesian theory

( Willey, 2012 ) explain Keynes ‘s theory as the finding of equilibrium existent GDP, employment, and monetary values focal points on the relationship between aggregative income and outgo. Keynes used his income-expenditure theoretical account to reason that the economic system ‘s equilibrium degree of end product or existent GDP may non match to the natural degree of existent GDP. In the income-expenditure theoretical account, the equilibrium degree of existent GDP is the degree of existent GDP that is consistent with the current degree of aggregative outgo. If the current degree of aggregative outgo is non sufficient to buy all of the existent GDP supplied, end product will be cut back until the degree of existent GDP is equal to the degree of aggregative outgo. Hence, if the current degree of aggregative outgo is non sufficient to buy the natural degree of existent GDP, so the equilibrium degree of existent GDP will lie someplace below the natural degree.

2.1.5.2 The Classical Theory

( Willey, 2012 ) Explain the cardinal rule of classical theory in the economic system is self-acting. Classical economic experts maintain that the economic system is ever capable of accomplishing the natural degree of existent GDP or end product, which is the degree of existent GDP that is obtained when the economic system ‘s resources are to the full employed. While fortunes arise from clip to clip that cause the economic system to fall below or to transcend the natural degree of existent GDP, self-adjustment mechanisms exist within the market system that work to convey the economic system back to the natural degree of existent GDP. The classical philosophy that the economic system is ever at or near the natural degree of existent GDP and based on two steadfastly held beliefs: Say ‘s Law and the belief that monetary values, rewards, and involvement rates are flexible.

2.2 Empirical reappraisal

Bretschger ( 2010 ) , Found that alteration in gross constituent such as, alteration in revenue enhancement rate gives different impacts to the economic development ( GDP ) to the unfastened economic system and found negative impacts of corporate revenue enhancements on openness and entire revenue enhancement gross to the economic growing in 12 OECD states. He besides mentioned on the revenue enhancement competition theory that argues that, when the revenue enhancement rate of capital is reduced, it will do the capital influx to a state.

Christina and David ( 2007 ) conducted the impact of alterations in the degree of gross constituent on economic growing in which they investigated the effects of revenue enhancement on GDP in United State in the post-World War II period. The survey found that a revenue enhancement addition by 1 % leads to decrease of 2 % to 3 % of GDP in United State.

Uhliga and Yanagawa ( 1999 ) , increased capital income revenue enhancements will bring forth the economic system ( GDP ) . This is because ; the capital income accrues for the old, in which addition on the capital income revenue enhancements will burthen revenue enhancement for the immature and increase their economy, if the involvement snap of salvaging is low.

Glomm and Ravikumar ( 1998 ) found that when the authorities reduces the capital income revenue enhancements, it will cut down the disbursement on instruction and the long-term growing. In this instance, the capital income revenue enhancements have positive correlativity with the economic growing ( GDP ) .

Gober and Burns ( 1997 ) have done a survey about the relationship between revenue enhancement construction and economic indexs for several states. From their findings, entire revenue enhancement gross has negative relationship with two economic indexs that are salvaging and investing. However, they explain, personal income revenue enhancement, corporate income revenue enhancement, gross revenues revenue enhancement ( ingestion revenue enhancement ) and other revenue enhancements are extremely important, in which there is positive relationship with economic growing ( GDP ) .

( Abizadeh, 1979 ; Chelliah, 1989 ) , These surveies conclude that, based on both historical and cross-sectional empirical analysis, the portion of gross through indirect revenue enhancements to entire revenue enhancement grosss fell while that of direct revenue enhancements rose with economic development, taking to the transmutation of the economic construction ( GDP ) .

( Volkerink and De Haan, 1999 ) , the survey found importance and frequence of recent gross through revenue enhancement reforms which have by and large led to a alteration in the revenue enhancement mix in developed countries.The survey relate with the more recent involvement in growing theory and alternate economic policies that may ensue into GDP growing and concentrated their attending on the consequence of revenue enhancement policy alterations GDP growing.

Haufler et Al. ( 2008 ) , the survey was on a simple political economic system theoretical account where the average elector decides on a redistributive income revenue enhancement rate. Based on their analysis, economic integrating may raise or take down the equilibrium revenue enhancement rate, and it is more likely to raise the revenue enhancement rate of a low-tax state. The consequences are consistent with empirical observations that effectual corporate revenue enhancement rates have non fallen in all OECD states, and that corporate revenue enhancement grosss have by and large risen with addition in GDP.

Stewart ( 2009 ) the survey found gross policy trough revenue enhancement jurisprudence and policy has dengenous for economic development such as gross domestic merchandise ( GDP ) , the survey conducted in developed state and explicate inorder to get the better of this job accent on gross aggregation through concern revenue enhancement.

Wang and Yip ( 1992 ) examines the consequence of gross constituent on ingestion revenue enhancements, revenue enhancements on capital and on assorted factors of out-put for Chinese economic system. The determination is that ingestion revenue enhancements and factor income revenue enhancements ( factor revenue enhancement ) has opposing and reciprocally off-setting consequence on growing domestic merchandise.

Robinson et. Al ( 1999 ) analyze and interpreted the effects of gross constituent though alterations in duties, direct and indirect revenue enhancements on gross, monetary values, rewards and public assistance utilizing general equilibriummodels. Their survey found that the impact of transmutation from direct revenue enhancement to indirect revenue enhancement it is good for developing state but for Pakistan where tax-GDP ratio still 8 per centum.

Kemal ( 2003 ) estimates the relation between gross of economic system with revenue enhancement equivocation and found that within 29 old ages belowground economic system and revenue enhancement equivocation in Pakistan has increased by 1.83 per centum as per centum of gross domestic merchandise ( GDP ) .He reaches to the decision that size of the belowground economic system and revenue enhancement equivocation increased with the addition in investing and greater concern activity.

Kneller et.al ( 1999 ) found grounds on how gross component through revenue enhancement can impact gross domestic products.findings shows rise in gross growing specifically income revenue enhancement could take to an addition in economic growing if the clip penchant is endogenously determined.

Lee and Gordon ( 2005 ) the survey was on how gross growing specifically revenue enhancement policies affect economic growing rate, by utilizing cross-country informations developing countries.Findings was any increase in revenue enhancement rate leads to take down future gross domestic merchandise ( GDP ) .A similar determination was found by Koch et Al. ( 2005 ) the survey usage, clip series analysis and cover period from 1960-2002, was aimed to analyze the deduction of revenue enhancement policy and gross domestic merchandise ( GDP ) by utilizing a two-stage mold technique. Findingss reveal that alterations in economic growing are strongly associated with the alterations in gross ( revenue enhancement load ) . In add-on, the survey revealed that the impact of revenue enhancement in developing economic systems is larger than in developed economic systems, nevertheless revenue enhancements raise the cost or lower the return to the taxed activity. Consequences found that higher fringy revenue enhancement rates have brought a negative consequence on gross domestic merchandise ( Poulson and Kaplan, 2008 ) .

Chapter THREE

3.0 Research methodological analysis

3.1 Datas and Data Sources.

The research worker will utilize secondary informations because the nature of informations required for this survey can be obtained from the paperss. The research worker is anticipating to acquire these informations from Bank of Tanzania, Tanzania Bureau of Statistics ( Government shortage and existent GDP ) . Other beginnings of informations will be taken from Journals, relevant books, articles and other paperss.

3.2 Sampling processs

The survey will cover the clip period from 2000 to 2010. Annual information will be employed in the survey because they are easy available as compared to quarterly informations. Data will be obtained in Tanzania gross authorization ( TRA ) , Bank of Tanzania ( BOT ) , Tanzania Bureau of Statistics.

3.3 Model and Estimation techniques

Multiple correlativity theoretical account will be used because independent variables are more than one, the dependant variable is one-year alteration of GDP and the independent variables are the constituent of revenue enhancements as ratio ; Value added revenue enhancement ( VAT ) , Income revenue enhancement, client revenue enhancement, as ratio to GDP. where the statistical bundle ( STATA ) will be used to prove autocorelation between variables.

The equation depicting such relationship as the multiple arrested development equation and set up the relationships between dependant ( GDP ) and independent variables ( revenue enhancement constituent ) .

GDP = I±+ I?1 VAT + I?2 IT + I?3 CT + I?4 TR +et.

Where

Dependent variable

Gross domestic merchandise ( GDP )

Independent variable

VAT- Value added revenue enhancement

IT – Income revenue enhancements

CET – Custom exercising revenue enhancements

TR – Entire Gross

et – mistake term

Chapter FOUR

PRESENTATION AND DISCUSION OF FINDINGS

4.0 Introduction

This chapter nowadayss and analyzes the empirical consequences for the analysis of gross growing as determiner of gross domestic merchandise ( GDP ) in Tanzania. The chapter is divided into five sections.First subdivision shows summary statististics of the variables, 2nd subdivision represent unit root trial of clip series informations, 3rd subdivision represent co-intergration trial, 4th subdivision represent theoretical account diagnostic trial and last subdivision compare the consequences of the survey with other surveies.

4.1 Drumhead Statisticss

The survey has five variables where gross domestic merchandise ( GDP ) is dependent variable and income revenue enhancement ( IT ) , value added revenue enhancement ( VAT ) , cutom exercising revenue enhancement ( CET ) and entire gross ( TR ) these are independent variable. Analysis of these variables was undertaken and all variables, except usage exercising revenue enhancement ( CET ) , were non usually distributed, custom exercising revenue enhancement is normal distributed because the kewness lies in the needed interval of normal distribution ( i.e -0.5 to +0.5 ) and other variables was non usually distributed becaue most of these variables was right skewed as it shown in the tabular array 4.a below.

Table 4a: drumhead statistics for the variables

Variables Name

Mean

min

Soap

std.dev

Discrepancy

lopsidedness

kurtosis

Gross domestic merchandise ( GDP )

1.6e+07

6211468

3.23e+07

8426866

7.10e+13

0.639982

2.193511

Income revenue enhancement

451329

160580

1389000

449386.7

2.02e+11

1.341379

2.972574

Value added revenue enhancement ( VAT )

336311

119068

1334000

398495.5

159e+11

1.919911

4.875708

Custom exercising revenue enhancement ( CET )

701480

191106

1465322

433315.2

1.88e+11

0.426833

1.742229

Entire gross ( TR )

2013509

572455

4645000

1485922

2.21e+12

0.635812

1.8601

4.2 Stationary trial ( unit root trial )

Time series variable may be stationary or nonstationary. In instance of non stationary this instance the Standard ordinary least square ( OLS ) process for appraisal will non be valid and a differenced information were used but trial was performed at first difference withou invariable this imply procedure under the void hypothesis is a random walk without impetus ( it is a difference stationary procedure ) . In this survey, unit root trial was carried out to find the order of integrating of each variable. Augmented Dickey-Fuller ( 1979, 1981 ) trial has been used to prove for the being of unit roots in all series.

From Table 4b bellow consequences reveal that all variables are non-stationary at two slowdowns. This is because the computed absolute values of the trial statistics do non transcend the augmented dickie Fuller ( ADF ) leads fail to reject the void hypothesis at ( I? = 0 ) which implies unit root or the clip series is non-stationary. Table 4c holla shows The consequences after differencing the series one time shows that the differenced variables are integrated of order one [ I ( 1 ) ] , consequences implies all variables became stationary after first difference as the computed absolute values of the trial statistics exceed the augmented dickie Fuller ( ADF ) , which lead to reject the void hypothesis at ( I? = 0 ) , hence the first difference of all variables is used in the arrested development analysis and ordinary least square ( OLS ) process can be used without fright of specious arrested development.

Table 4b: Consequences of unit root trial for variable in degrees

A

Augmented Dicker Fuller

A

variable name

Trial statistics

Critical value at 5 %

Gross domestic merchandise ( GDP )

-0.245

-3.000

Income revenue enhancement ( IT )

0.791

-3.000

Value added revenue enhancement ( VAT )

-2.15

-3.000

Custom exercising revenue enhancement ( CET )

-1.442

-3.000

Entire gross ( TR )

0.022

-3.000

Table 4c: Consequences of unit root trial for first difference

A

Augmented Dicker Fuller

A

A

variable name

Trial statistics

Critical value at 5 %

Order of integrating

Gross domestic merchandise ( GDP )

-3.398

-3.000

I ( 1 )

Income revenue enhancement ( IT )

-4.161

-3.000

I ( 1 )

Value aded revenue enhancement ( VAT )

-4.286

-3.000

I ( 1 )

Custom exercising revenue enhancement ( CET )

-3.817

-3.000

I ( 1 )

Entire gross ( TR )

-3.858

-3.000

I ( 1 )

4.3 co-integration trial

Table 4d: co-intergration trial

Maximum rank

Eigen value

Trace statistics

5 % critical value

0

A

120.1458*

68.52

1

0.9979

46.1449

47.21

2

0.89138

19.5063

29.68

3

0.5104

10.9364

15.41

4

0.47421

3.2223

3.76

5

0.23549

A

A

Appendix

Appendix 1: Elephantine Chart

Calendar months

Week

Activity

July 2012

August 2012

September 2012

October 2012

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Acquaintance with working environment.

Preparation of informations aggregation Methods.

Data Collection.

Data Analysis and Interpretation.

First Drafting of Report.

Final Draft.

Meeting with supervisor for rectification, and Submission of Research paper to Supervisor