Case Studies in Tax Revenue Mobilization in Low-Income Countries

IMF Working Papers, May 10, 2019

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Canonical URL: Case Studies in Tax Revenue Mobilization in Low-Income Countries

Authors: Bernardin Akitoby, Jiro Honda, Hiroaki Miyamoto, Keyra Primus, Mouhamadou Sy
Published: May 10, 2019
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9781498314565.001

Objective: Analyze seven tax reform experiences in Low-Income Countries (LICs) to assess how LICs can enhance tax revenue collection to finance development needs.
Countries covered: Burkina Faso, The Gambia, Maldives, Mauritania, Rwanda, Senegal, and Uganda.
Three overarching lessons (reproduced verbatim):
- (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.
Examples of near-term reform measures that can build momentum:
- simplifying the tax system;
- curbing exemptions;
- reforming indirect taxes on goods and services (e.g., excises);
- better managing compliance risks through strengthening taxpayer segmentation (often beginning with strengthening the Large Taxpayers Office).
Recommendation: A comprehensive reform strategy (e.g., a medium-term revenue strategy) can help properly sequence reform measures and facilitate implementation.

Emphasize political commitment and stakeholder buy-in as the first priority for tax reform efforts.
Combine revenue administration reforms with tax policy changes to achieve larger and more persistent revenue gains.
Start reforms with measures that deliver immediate fiscal effects to build momentum and public support.
Use a medium-term revenue strategy to sequence and coordinate policy and administrative measures.

Subject tags: Consumption taxes, Excises, Revenue administration, Tax administration core functions, Taxes, Value-added tax.
Keywords (as listed): administration measure, administration reform, authorities' reform effort, Consumption taxes, country authorities, excise tax, Excises, Global, government coalition, income tax, indirect tax, reform effort, reform measure, reform strategy, revenue administration, revenue mobilization, single tax, Tax administration core functions, tax administration measure, tax exemption, tax policy, tax procedure, tax reform strategy, tax system, Value-added tax, withholding tax, WP.