Khumalo, Qondeni Penelope.Nelani, Sakhiwo.2025-10-122025-10-1220242024https://hdl.handle.net/10413/23959Masters Degree. University of KwaZulu-Natal, Pietermaritzburg.The study's primary objective is to examine taxation's impact on the GDP of sampled sub- Saharan African upper middle income countries, compare their taxation systems, identify challenges and opportunities and propose strategies for enhancing taxation's positive influence on economic performance. The various taxation variables also examined the impact on the Gross Domestic Product (GDP) of sub-Saharan African upper middle income countries, focusing on income tax, corporate tax, international trade tax, social contributions tax, and capital formation. Using secondary data from public sources such as the OECD/AUC/ATAF (2022) and employing a quantitative research methodology, the panel data regression analysis, the research design utilised in this study seeks to answer the following question, “How do different types of taxation (income tax, corporate tax, VAT, property tax, and social contributions) impact GDP growth rates across different countries or regions over time?”. The dependent variable is the Gross Domestic Product (GDP) growth rate, and the predicting variables are income tax rate, value-added tax rate, corporate tax rate, property tax rate, trade tax rate, social contributions and excise tax rate. The model further employs four control variables: inflation rate, investment rate (Gross Fixed capital formation), trade openness, and labour force participation rate. The findings reveal significant and varied relationships between taxation and GDP growth. Utilising legitimacy theory and development state theory as conceptual lenses, the study focused on understanding the current state of taxation, its impact on gross domestic product (GDP), and associated challenges and opportunities. The study highlights that lagged GDP growth has a positive and significant effect, demonstrating growth persistence over time. While negatively correlated with GDP growth, income tax, corporate tax, and international trade tax are not statistically significant, suggesting other factors may mitigate their effects. Conversely, the social contributions tax positively influences GDP growth, underscoring the potential role of public reinvestment in driving economic activity. Inflation is found to have a positive and highly significant relationship with growth, indicating that moderate inflation may stimulate demand and investment. On the other hand, the interaction between capital formation and labour participation significantly negatively affects growth, suggesting possible inefficiencies in capital or labour allocation when both factors increase simultaneously. These results indicate the need for a nuanced approach to tax policy and economic growth strategies, particularly optimizing the balance between capital investment, labour participation, and taxation in sub-Saharan Africa. The study calls for future research to explore qualitative factors influencing capital formation, the optimal balance between consumption and investment, and the complex dynamics between labour and capital in the region.enCC0 1.0 Universalhttp://creativecommons.org/publicdomain/zero/1.0/Gross domestic product.Upper middle income countries.Tax revenue.Economic growth.Thesis