{ "title": "Rethinking Subnational Taxes: A New Look At Tax Assignment", "publication": "IMF Working Papers, December 1, 1999", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354", "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354", "overlayPath": "/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/index.md", "summary": "The assignment of revenues in most developing and transitional countries to the central government has arguably facilitated irresponsible behavior by some subnational governments. One way to relieve this problem is to strengthen subnational tax regimes.", "sections": [ { "heading": "Overview and central argument", "content": "- Author: Richard Miller Bird\n- Publication date: December 1, 1999\n- Series: Working Paper No. 1999/165; Issue: 165; Volume: 1999; Pages: 54\n- DOI: https://doi.org/10.5089/9781451858037.001\n- Stock No: WPIEA1651999\n- ISBN: 9781451858037\n- ISSN: 1018-5941\n- Core premise: The assignment of revenues in most developing and transitional countries to the central government has arguably facilitated irresponsible behavior by some subnational governments; strengthening subnational tax regimes can relieve this problem." }, { "heading": "Key findings", "content": "- Revenue assignment to central governments in most developing and transitional countries can facilitate irresponsible behavior by some subnational governments.\n- Two approaches are proposed to strengthen subnational tax regimes in developing countries:\n - Establish subnational value-added taxes (VATs), a solution most applicable to large countries with important regional governments.\n - Replace various unsatisfactory state and local taxes imposed on business with a low-rate value-added tax levied on the basis of income (production, origin) rather than consumption (destination)." }, { "heading": "Policy recommendations and design options", "content": "- For large, multitiered countries with important regional governments:\n - Implement subnational VATs to provide subnational governments with stable and accountable revenue sources.\n- For jurisdictions facing fragmented and unsatisfactory local business taxes:\n - Replace multiple state and local business taxes with a single low-rate value-added tax based on income (production, origin) rather than consumption (destination)." }, { "heading": "Thematic scope and subjects covered", "content": "- Subjects listed: Corporate income tax; Expenditure assignments; Fiscal policy; Revenue assignments; Subnational tax; Taxes; Value-added tax\n- Keywords and thematic elements include: Africa; beggar-my-neighbor tax competition; central government; Corporate income tax; destination state; developing country; Expenditure assignments; Global; government needs; importing state; Local business taxes; local government; multitiered government; national government; provincial sales tax; Regional governments; Revenue assignments; state ICMS; state VAT; Subnational tax; Subnational taxes; tax administration; tax assignment; Value-added tax; WP" }, { "heading": "Publication and access notes", "content": "- Publication type: IMF Working Papers\n- Access options indicated on the landing page: Download PDF; More Formats on IMF eLibrary; Order a Print Copy; Create Citation\n- Citation example provided on page: Richard Miller Bird. \"Rethinking Subnational Taxes: A New Look At Tax Assignment\", IMF Working Papers 1999, 165 (1999), accessed 9/13/2026, https://doi.org/10.5089/9781451858037.001\n\nIMF Working Paper No. 1999/165, Richard Miller Bird, December 1, 1999.\n\n---\n\n Content in this bundle\n\n- Rethinking Subnational Taxes: A New Look at Tax Assignment - WP/99/165\n - Rethinking Subnational Taxes: A New Look at Tax Assignment - WP/99/165 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Rethinking Subnational Taxes: A New Look at Tax Assignment - WP/99/165 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/index.md)", "[Structured JSON version](/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/index.json)", "[Bundle manifest](/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/bundle-manifest.json)", "Authors: Richard Miller Bird", "Published: December 1, 1999", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9781451858037.001", "Author: Richard Miller Bird", "Publication date: December 1, 1999", "Series: Working Paper No. 1999/165; Issue: 165; Volume: 1999; Pages: 54", "DOI: https://doi.org/10.5089/9781451858037.001", "Stock No: WPIEA1651999", "ISBN: 9781451858037", "ISSN: 1018-5941", "Core premise: The assignment of revenues in most developing and transitional countries to the central government has arguably facilitated irresponsible behavior by some subnational governments; strengthening subnational tax regimes can relieve this problem.", "Revenue assignment to central governments in most developing and transitional countries can facilitate irresponsible behavior by some subnational governments.", "Two approaches are proposed to strengthen subnational tax regimes in developing countries:", "For large, multitiered countries with important regional governments:", "For jurisdictions facing fragmented and unsatisfactory local business taxes:", "Subjects listed: Corporate income tax; Expenditure assignments; Fiscal policy; Revenue assignments; Subnational tax; Taxes; Value-added tax", "Keywords and thematic elements include: Africa; beggar-my-neighbor tax competition; central government; Corporate income tax; destination state; developing country; Expenditure assignments; Global; government needs; importing state; Local business taxes; local government; multitiered government; national government; provincial sales tax; Regional governments; Revenue assignments; state ICMS; state VAT; Subnational tax; Subnational taxes; tax administration; tax assignment; Value-added tax; WP", "Publication type: IMF Working Papers", "Access options indicated on the landing page: Download PDF; More Formats on IMF eLibrary; Order a Print Copy; Create Citation", "Citation example provided on page: Richard Miller Bird. \"Rethinking Subnational Taxes: A New Look At Tax Assignment\", IMF Working Papers 1999, 165 (1999), accessed 9/13/2026, https://doi.org/10.5089/9781451858037.001", "**Rethinking Subnational Taxes: A New Look at Tax Assignment - WP/99/165**" ], "related": [ { "title": "Rethinking Subnational Taxes: A New Look at Tax Assignment - WP/99/165", "role": "document", "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/1999/_wp99165.pdf", "summary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/1999/_wp99165.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/1999/_wp99165.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/index.md", "json": "/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/index.json", "bundleManifest": "/en/publications/wp/issues/2016/12/30/rethinking-subnational-taxes-a-new-look-at-tax-assignment-3354/bundle-manifest.json" }, "generatedAtUtc": "2026-09-17T07:26:34.312Z" }