There are three major determinants of taxable capacity and they are: Ratio of total tax revenue to national income of the nation; the benefits of public expenditure out of tax revenue; and (iii) the efficiency of tax administrationBath and hemphil identify the following major factors to the taxable capacity:(i) the degree of openness of a economy; (ii) the level of development and income; (iii) the composition and distribution of incomeI have indicated that the literature also identifies several economic variables as bearing on a country's taxable capacity, such as: per capita GDP; share of value added produced in agriculture; openness to foreign trade; production of natural resources; monetisation the economy
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