Mr. Matthieu Bellon, Ms. Era Dabla-Norris, Salma Khalid, Juan Carlos Paliza, Jillie Chang, and Pilar Villena
Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms.
This paper assesses whether conditionality in IMF-supported programs has helped offset the potential negative effect of foreign aid on tax revenues. The analysis—carried out on panel data covering 1993–2012 for 111 low- and middle-income countries—shows that growing use of revenue conditionality by low-income countries partially offsets the depressing effect of foreign grants on tax revenue, particularly on taxes on goods and services. The impact of conditionality is strong in countries where aid dependence is high and where institutions are strong, suggesting that revenue conditionality cannot substitute for weak institutions in mitigating the negative effect of aid on tax revenue collection.
This report provides to the Ministry of Finance a review of the current mass valuation appraisal system, and further policy directions on improved tax design for a property tax that would not invite Constitutional challenge, especially in respect of tax base definition, tax rate policy, and tax relief. These measures combined would broaden the base with less rate discrimination. The mission identified the following key structural problems as to the design of the real property tax and suggested corrective steps with the view to improving collections from property taxes across Slovenia
This paper addresses core challenges that all tax administrations face in dealing with noncompliance—which are now receiving renewed attention. Long a priority in developing countries, assuring strong compliance has acquired greater priority in countries facing intensified revenue needs, and is critical for fairness and statebuilding. Series: Policy Papers
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.
Issues of taxation and development, which have long been a central concern of the IMF, have attracted wider and renewed interest in the last few years. This paper reflects on three broad lessons of experience: that developing countries differ vastly in tax matters, and in ways that are less than fully understood; that the history of ‘big ideas’ in guiding tax reform for developing countries is decidedly mixed; and that the value of the emphasis often placed in this context on ‘informality’ is decidedly limited. It also asks whether ideas of ‘state building’ emphasized in some of the recent literature are likely to lead to practical advice much different from that commonly offered now.
This Selected Issues Paper quantifies the variability of tax elasticities in Lithuania using two alternative methods: rolling regressions and pooled mean group estimator. The analysis is motivated by the systematic variation of tax revenues observed over the economic cycle. Both methods confirm that tax elasticities moved with the cycle, which can be attributed to the procyclical tax compliance tendencies and structural composition effects across tax bases. The results of the study emphasize the importance of accounting for cyclical variation in tax elasticities when making short-term tax revenue projections.
The Fund has long played a lead role in supporting developing countries’ efforts to improve their revenue mobilization. This paper draws on that experience to review issues and good practice, and to assess prospects in this key area.
Edited by Victor Thuronyi, this book offers an introduction to a broad range of issues in comparative tax law and is based on comparative discussion of the tax laws of developed countries. It presents practical models and guidelines for drafting tax legislation that can be used by officials of developing and transition countries. Volume I covers general issues, some special topics, and major taxes other than income tax.
This paper provides a framework for examining environment taxes. It reviews the theoretical efficiency of three types of environment taxes: taxes on emissions or Pigouvian taxes; taxes on productive inputs or consumer goods whose use is related to environmental damage; and environment-related provisions in other taxes. A survey of environment taxes in 42 countries--drawn from developing countries, economies in transition, and industrial countries--illustrates that the use of environment taxes differs dramatically from the recommendations of environment tax theory. This divergence between the theory and practice of environment taxes can be attributed to several factors; environment taxes are difficult to implement, there are many factors that impede their effectiveness, and their introduction may be discouraged by their implications for other policy objectives.