Does conditionality in IMF-supported programs promote revenue reform?
November 19, 2014
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Summary
This paper studies whether revenue conditionality in Fund-supported programs had any impact on the revenue performance of 126 low- and middle-income countries during 1993-2013. The results indicate that such conditionality had a positive impact on tax revenue, with strongest improvement felt on taxes on goods and services, including the VAT. Revenue conditionality matters more for low-income countries, particularly those where revenue ratios are below the group average. Moreover, revenue conditionality appears to be more effective when targeted to a specific tax. These results hold after controlling for potential endogeneity, sample selection bias, and when revenues are adjusted for economic cycle.
Subject: Consumption taxes, National accounts, Personal income, Revenue administration, Tax administration core functions, Taxes, Value-added tax
Keywords: conditionality dummy, Consumption taxes, Global, IMF conditionality, IMF-supported program, Personal income, revenue collection, revenue conditionality, structural conditionality, Sub-Saharan Africa, Tax administration core functions, tax revenue, tax revenue performance, Value-added tax, WP
Pages:
32
Volume:
2014
DOI:
Issue:
206
Series:
Working Paper No. 2014/206
Stock No:
WPIEA2014206
ISBN:
9781484380048
ISSN:
1018-5941
