Staff Discussion Notes

Building Tax Capacity in Developing Countries

By Juan Carlos Benitez, Mario Mansour, Miguel Pecho, Charles Vellutini

September 19, 2023

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Format: Chicago

Juan Carlos Benitez, Mario Mansour, Miguel Pecho, and Charles Vellutini. Building Tax Capacity in Developing Countries, (USA: International Monetary Fund, 2023) accessed November 8, 2024

Also available in: français

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.

Subject: Economic sectors, Financial crises, Property tax, Revenue administration, Tax administration core functions, Tax law, Tax policy, Taxes, Value-added tax

Keywords: Analysis capacity, Asia and Pacific, Building tax analysis capacity, Development, Global, Institutions, Middle East and Central Asia, Property tax, Sub-Saharan Africa, Tax administration core functions, Tax capacity, Tax Effort estimate, Tax law, Tax potential, Taxation, Value-added tax, VAT revenue, Western Hemisphere

Publication Details

  • Pages:

    32

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Staff Discussion Notes No. 2023/006

  • Stock No:

    SDNEA2023006

  • ISBN:

    9798400246098

  • ISSN:

    2617-6750

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