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Abstract
In reaction to Peter Heller’s comment that countries should try to reduce their reliance on export taxation, Jean-Claude Brou of Côte d’Ivoire suggested that the problem was one of timing, and not whether such a step should be taken at all. If countries reduced those taxes too rapidly, trying to replace them with taxes on domestic consumption, a problem would arise because most African economies were rural and agricultural in nature, and the informal sector was still a substantial sector. Moreover, increasing taxes on domestic consumption required a strong fiscal administration—which took time to create—whereas reducing taxes on international trade could have an immediate impact on revenues. Thus, it needed to be recognized that the substitution process would take time, and if things were done too quickly, other imbalances would occur, in turn slowing down the entire readjustment process.
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