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The concepts of tax buoyancy and tax efficiency are used to measure the responsiveness of tax revenue to economic growth. Tax

buoyancy is a crude measure which does not distinguish between discretionary and automatic growth of revenue. Elasticity is a preferred

measure of tax responsiveness since it controls for automatic revenue

changes. In this study, the buoyancies and elasticities of the major

taxes in a representative developing economy, the Ivory Coast, are

estimated using alternative estimation techniques and comparisons between buoyancies and elasticities are drawn. In general, tax receipts

in the Ivory Coast tend to be slightly inelastic while particular

taxes such as the value added tax are highly elastic. The results of

the study have important policy and research implications.

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Q: What is the difference between tax elasticity and tax buoyancy?
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