Tax Administration and the Small Taxpayer

Author/Editor:

Parthasarathi Shome

Publication Date:

May 1, 2004

Electronic Access:

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Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Small taxpayers should pay their appropriate revenue share while their compliance costs should be reduced. This assumes importance as restructuring in emerging markets has meant rapid growth in services through self-employed small entrepreneurs, who have good revenue potential. Administrative facilitators such as a single tax covering income tax, VAT, and social security tax, at a reduced rate, do not lower tax evasion. They increase vertical and horizontal inequity, and lead to adverse resource allocation. A strategy is needed, extending modernization achieved in large taxpayer units (LTUs) to small taxpayers, including rationalization of collection and reporting of revenue data for policy formulation.

Series:

Policy Discussion Paper No. 04/2

Subject:

English

Publication Date:

May 1, 2004

ISBN/ISSN:

9781451974577/1934-7456

Stock No:

PPIEA0022004

Format:

Paper

Pages:

33

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