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How can Low-Income Countries (LICs) enhance tax revenue collection to finance their vast development needs? We address this question by analyzing seven tax reform experiences in LICs (Burkina Faso, The Gambia, Maldives, Mauritania, Rwanda, Senegal, and Uganda). Three lessons stand out, although reforms must be tailored to individual circumstances: (i) Tax reforms require first and foremost political commitment and buy-in from key stakeholders; (ii) Countries that pursue both revenue administration and tax policy reforms tend to see much larger and persistent gains; and (iii) A successful strategy often starts with fiscal reform measures with immediate effect to build momentum. These can include: simplifying the tax system; curbing exemptions; reforming indirect taxes on goods and services (e.g., excises); and better managing compliance risks through strengthening taxpayer segmentation (often beginning with strengthening the Large Taxpayers Office). A comprehensive reform strategy (e.g., a medium-term revenue strategy) can help to properly sequence reform measures and facilitate their implementation.

Fiscal policy. --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Government policy --- Public Finance --- Fiscal Policy --- Taxation, Subsidies, and Revenue: General --- Business Taxes and Subsidies --- Public finance & taxation --- Excise taxes --- Revenue administration --- Tax administration core functions --- Consumption taxes --- Value-added tax --- Excises --- Taxes --- Revenue --- Spendings tax --- Tax administration and procedure --- Excise tax --- Burkina Faso

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A key obstacle to fundamental tariff reform in many developing countries is the revenue loss that it ultimately implies. This paper establishes a simple and practicable strategy for realizing the efficiency gains from tariff reform without reducing public revenues, showing that for a small open economy, a cut in tariffs combined with a point-for-point increase in domestic consumption taxes increases both welfare and public revenues. Increasingly stringent conditions are required, however, to ensure unambiguously beneficial outcomes from this reform strategy when allowance is made for such important features as nontradeable goods, intermediate inputs, and imperfect competition.

Macroeconomics --- Taxation --- Models of Trade with Imperfect Competition and Scale Economies --- Trade Policy --- International Trade Organizations --- Taxation, Subsidies, and Revenue: General --- Price Level --- Inflation --- Deflation --- Business Taxes and Subsidies --- Macroeconomics: Consumption --- Saving --- Wealth --- Public finance & taxation --- Tariffs --- Consumption taxes --- Consumer prices --- Producer prices --- Consumption --- Taxes --- Prices --- National accounts --- Tariff --- Spendings tax --- Economics --- Ethiopia, The Federal Democratic Republic of

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A methodology for computing effective average tax rates on factor incomes and consumption using OECD data from national accounts and revenue statistics is described and applied to construct time series of tax rates for the group of seven largest industrialized countries. These tax rates are compared with estimates of effective marginal tax rates obtained in other studies. The stylized facts that distinguish tax systems across countries are documented, and the co-movements between the tax rates and savings, investment, net exports, unemployment, and hours worked are also examined. The results of this analysis illustrate some of the potential implications of tax policies currently under consideration and suggest that the proposed tax rates are useful approximations to those faced by representative agents in dynamic macroeconomic models.

Personal Finance -Taxation --- Taxation --- Open Economy Macroeconomics --- Taxation, Subsidies, and Revenue: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Business Taxes and Subsidies --- Public finance & taxation --- Personal income tax --- Capital income tax --- Consumption taxes --- Average effective tax rate --- Income tax systems --- Taxes --- Tax policy --- Income tax --- Spendings tax --- Tax administration and procedure --- United States

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Like the theory of the second best that the 2006 congress marks, the VAT is now fifty years old. Judged by the extent and speed of its spread around the world, and the revenue that it raises, the VAT would seem to have been a remarkable success. Over the last few years, however, it has come under a series of attacks. This paper considers three of the most prominent of these. One is the fear (raised mainly in the United States) that the VAT actually does too good a job of raising tax revenue. The second is the view that the VAT does a bad job of taxing the informal sector-and that tariffs might be a better revenue-raising instrument for many developing countries. The third attack is the most literal, by criminals rather than theorists: in the European Union and elsewhere, sophisticated VAT fraud, targeting its refund provisions, has become a serious concern.

Public Finance --- Taxation --- Business Taxes and Subsidies --- Taxation, Subsidies, and Revenue: General --- Trade Policy --- International Trade Organizations --- Efficiency --- Optimal Taxation --- Public finance & taxation --- Value-added tax --- Revenue administration --- Tariffs --- Consumption taxes --- Tax efficiency --- Spendings tax --- Revenue --- Tariff --- Tax administration and procedure --- United States

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This paper reviews recent experience of technical assistance on tax policy provided by the Fiscal Affairs Department to a selected but diversified group of countries that differ both in their geographical locations and in the nature of their economies. The review finds in the technical assistance advice both common themes applicable to all countries and special elements designed to address issues unique to a specific country, or a subset of countries. It also attempts to assess, to the extent possible, the policy impacts of such advice.

Personal Finance -Taxation --- Taxation --- Taxation, Subsidies, and Revenue: General --- Socialist Institutions and Their Transitions: Public Economics --- Comparative Studies of Particular Economies --- Business Taxes and Subsidies --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Public finance & taxation --- Value-added tax --- Income tax systems --- Income and capital gains taxes --- Consumption taxes --- Personal income tax --- Taxes --- Income tax --- Spendings tax --- Costa Rica