Building Tax Capacity in Developing Countries
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Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.
Summary:
Tax capacity—the policy, institutional, and technical capabilities to collect tax revenue—is part of a deeper process of state building that is essential for achieving the sustainable development goals. This Staff Discussion Note shows that developing countries have made some progress in revenue mobilization during the past decades. However, much more is needed. We find that a staggering 9 percentage-point increase in the tax-to-GDP ratio is feasible through a combination of tax system reform and institutional capacity building. Achieving this calls for a holistic and institution-based approach that focuses on improving policy, administration and legal implementation of core taxes. The note offers practical lessons and guidance, based on IMF capacity building experience in this area.
Series:
Staff Discussion Notes No. 2023/006
Subject:
Economic sectors Financial crises Property tax Revenue administration Tax administration core functions Tax law Tax policy Taxes Value-added tax
Frequency:
occasional
English
Publication Date:
September 19, 2023
ISBN/ISSN:
9798400246098/2617-6750
Stock No:
SDNEA2023006
Format:
Paper
Pages:
32
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