{
  "title": "Quantifying the Revenue Yields from Tax Administration Reforms",
  "publication": "IMF Working Papers, November 10, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/11/10/quantifying-the-revenue-yields-from-tax-administration-reforms-541407",
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  "summary": "Despite the criticality of tax administration (TA) reforms in enhancing domestic revenue mobilization, few studies have attempted to quantify the revenue impact of such reforms.",
  "sections": [
    {
      "heading": "Summary and purpose",
      "content": "- Purpose: Estimate revenue yields associated with various tax administration (TA) capabilities to fill a gap in quantified evidence on TA reforms’ impact on domestic revenue mobilization.\n- Data sources: International Survey on Tax Administration (ISORA), Tax Administration Diagnostic Assessment Tool (TADAT), and TA reform episodes datasets (identified by Akitoby et al., 2020).\n- Methods: Hausman-Taylor cross-country panel regression and an event study for specific TA reform episodes."
    },
    {
      "heading": "Key quantitative findings",
      "content": "- An increase in overall TA strength from the 40th percentile to the 60th percentile is associated with an increase in tax revenue by 1.8 pp. of GDP (with a 95 percent confidence range of 0.5‒2.6 pp. of GDP).\n- The event-study assessment shows sustained TA reforms led to an increase in tax revenues between 2 to 3 pp. of GDP.\n- Revenue yields increase over time to more than 3 pp. of GDP after the 6th year following a comprehensive reform.\n- Country case evidence cited: Jamaica, Rwanda, and Senegal align with the event-study finding of 2 to 3 pp. of GDP increases."
    },
    {
      "heading": "Methodological notes",
      "content": "- Regression approach: Hausman-Taylor cross-country panel regression applied to ISORA data.\n- Complementary approach: Event study analysis of specific TA reform episodes drawn from the TA reform episodes dataset."
    },
    {
      "heading": "Specific TA measures with significant impact",
      "content": "- Strengthening compliance risks management.\n- Enhancing public accountability.\n- Establishing Large Taxpayer Offices (LTO).\n- Strengthening accountability and transparency.\n- Enhancing timely filing of tax declarations."
    },
    {
      "heading": "Implications for TA reform policy",
      "content": "- Comprehensive and sustained TA reforms can deliver measurable revenue gains in the range of 1.8 pp. to more than 3 pp. of GDP over time.\n- Targeted reforms in compliance risk management, public accountability, LTOs, transparency, and filing timeliness are identified as high-impact measures to prioritize in reform programs.\n\nIMF Working Paper: Quantifying the Revenue Yields from Tax Administration Reforms, Hassan Adan; Jean-Marc Atsebi; Nikolay Gueorguiev; Jiro Honda; Manabu Nose; November 10, 2023.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/11/10/quantifying-the-revenue-yields-from-tax-administration-reforms-541407"
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    "Authors: Hassan Adan, Jean-Marc Atsebi, Nikolay Gueorguiev, Jiro Honda, Manabu Nose",
    "Published: November 10, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400258923.001",
    "Purpose: Estimate revenue yields associated with various tax administration (TA) capabilities to fill a gap in quantified evidence on TA reforms’ impact on domestic revenue mobilization.",
    "Data sources: International Survey on Tax Administration (ISORA), Tax Administration Diagnostic Assessment Tool (TADAT), and TA reform episodes datasets (identified by Akitoby et al., 2020).",
    "Methods: Hausman-Taylor cross-country panel regression and an event study for specific TA reform episodes.",
    "An increase in overall TA strength from the 40th percentile to the 60th percentile is associated with an increase in tax revenue by 1.8 pp. of GDP (with a 95 percent confidence range of 0.5‒2.6 pp. of GDP).",
    "The event-study assessment shows sustained TA reforms led to an increase in tax revenues between 2 to 3 pp. of GDP.",
    "Revenue yields increase over time to more than 3 pp. of GDP after the 6th year following a comprehensive reform.",
    "Country case evidence cited: Jamaica, Rwanda, and Senegal align with the event-study finding of 2 to 3 pp. of GDP increases.",
    "Regression approach: Hausman-Taylor cross-country panel regression applied to ISORA data.",
    "Complementary approach: Event study analysis of specific TA reform episodes drawn from the TA reform episodes dataset.",
    "Strengthening compliance risks management.",
    "Enhancing public accountability.",
    "Establishing Large Taxpayer Offices (LTO).",
    "Strengthening accountability and transparency.",
    "Enhancing timely filing of tax declarations.",
    "Comprehensive and sustained TA reforms can deliver measurable revenue gains in the range of 1.8 pp. to more than 3 pp. of GDP over time.",
    "Targeted reforms in compliance risk management, public accountability, LTOs, transparency, and filing timeliness are identified as high-impact measures to prioritize in reform programs.",
    "**Working Paper**"
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