Funding the Future: Tax Revenue Mobilization in the Pacific Island Countries
Departmental Papers, September 12, 2022
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Bibliographic details
- Authors: Mouhamadou Sy, Andrew Beaumont, Enakshi Das, Georg Eysselein, David Kloeden, Katrina R Williams
- Published: September 12, 2022
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9798400219023.087
Overview and Objectives
- Authors: Mouhamadou Sy, Andrew Beaumont, Enakshi Das, Georg Eysselein, David Kloeden, Katrina R Williams
- Publication date: September 12, 2022
- Publication series: Departmental Paper No 2022/015, Issue 015, Volume 2022
- Pages: 62
- DOI: https://doi.org/10.5089/9798400219023.087
- Main objectives:
- Review the critical medium-term development spending requirements and available financing options.
- Document the main stylized facts about tax revenues in the PICs and estimate the additional tax revenue that countries could raise.
- Highlight the main bottlenecks preventing the PICs from further increasing their tax revenue collection with an emphasis on weaknesses in VAT systems.
- Draw lessons from successful emerging and developing countries that have managed to substantially and durably increased their tax revenues.
- Propose tax policy and revenue administration reform priorities for Pacific Island Countries to boost tax revenues.
Key Findings
- The current revenue mix in Pacific Island Countries (PICs) is skewed toward non-tax revenues.
- PICs could collect an additional 3 percent of tax revenue in the short to medium term.
- Many bottlenecks are preventing the PICs from boosting their tax revenue collection.
- The potential offered by efficient VAT systems is not fully exploited.
Analysis and Focus Areas
- Fiscal needs:
- PICs face daunting spending needs related to achieving the UN Sustainable Development Goals (SDGs) and adapting to the effects of climate change.
- Boosting tax revenues is essential to create fiscal space to meet SDG and climate-adaptation spending needs.
- Revenue diagnostics:
- Stylized facts about tax revenues in the PICs are documented and used to estimate feasible additional tax revenue.
- Special emphasis on weaknesses in VAT systems and their unrealized potential.
- Lessons and comparative evidence:
- Draws on experiences of successful emerging and developing countries that substantially and durably increased tax revenues.
Policy Recommendations and Reform Priorities
- Unwinding recent fiscal relief measures.
- Strengthening or introducing a VAT system.
- Rationalizing tax exemptions.
- Closing loopholes in the tax system.
- Reforming tax administration.
- Introducing a medium-term revenue strategy.
Subject Areas and Keywords
- Subjects: Consumption taxes, Fiscal policy, International organization, Political economy, Revenue administration, Revenue mobilization, Tax administration core functions, Taxes, Value-added tax
- Keywords: Asia and Pacific, B. VAT potential, Consumption taxes, Domestic resource mobilization, Pacific Island Countries, Pacific Islands, Revenue administration measure, Revenue administration reform, Revenue mobilization, tax administration, Tax administration core functions, tax exemption, tax exemptions, tax policy, Value added tax, Value-added tax, VAT system
Source: "Funding the Future: Tax Revenue Mobilization in the Pacific Island Countries", Departmental Papers 2022, 015 (2022), accessed via IMF publication landing page; authors Mouhamadou Sy, Andrew Beaumont, Enakshi Das, Georg Eysselein, David Kloeden, Katrina R Williams; September 12, 2022; DOI https://doi.org/10.5089/9798400219023.087.
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