Business and Economics > Corporate Taxation

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Irving Aw
,
Brendan Crowley
,
Cory Hillier
,
Rose A Nyongesa
,
Lydia E Sofrona
, and
Christophe J Waerzeggers
Fair and effective tax collection is critical to the success of any tax system in raising revenue and should be properly legislated. Voluntary payment of taxes by taxpayers is always preferred and should be encouraged and supported by the tax procedure legal framework. However, the law should also provide for protective measures to prevent taxpayers from frustrating tax collection efforts by taking either themselves or their assets out of the tax administration’s reach. As a last resort, the tax administration should be able to compel the recovery of outstanding tax debts from taxpayers or certain third parties through different legislative measures. Such powers should however be complemented by adequate safeguards for taxpayers. This note focuses on the key issues that should be taken into consideration in designing tax law provisions to support fair and effective tax collection.
International Monetary Fund. Fiscal Affairs Dept.
This report presents results on a review of data available to the State Revenue Committee for estimating the Personal Income Tax and Social Security Contribution gaps. It is concluded that SRC has sufficient quality data available from operational audits to assess the gaps.
Santos Bila
,
Utkarsh Kumar
, and
Alexis Meyer-Cirkel
This paper analyzes the use of tax policy as industrial policy in Mozambique. Despite significant foregone tax revenue due to industrial policy in the form of tax incentives, the effectiveness of Mozambique's tax policy remains questionable due to insufficient data and unclear public policy strategy. Through an examination of macro data, tax reports, and data from World Bank Enterprise Surveys, the note underscores the need for a thorough reassessment of existing tax measures. It advocates for a more strategic, targeted and evidence-based design of tax incentives that deliver on industrial policy goals.
International Monetary Fund. Middle East and Central Asia Dept.
The paper examines domestic revenue mobilization in Mauritania and proposes strategies to enhance tax revenue collection to address fiscal sustainability challenges and finance critical investment projects. Despite recent progress, Mauritania’s tax-to-GDP ratio remains below that of its peers, constrained by a complex legal framework, numerous derogatory tax regimes, and inefficiencies in revenue administration. The analysis indicates that Mauritania could increase tax revenues by up to 3.4% of GDP in the medium term, thus reducing its tax gap by one-third. Key policy recommendations include reducing VAT exemptions, replacing corporate tax exemptions with cost-based incentives, reforming the personal income tax system, broadening the consumption tax base, simplifying tax procedures, managing tax arrears more effectively, and strengthening tax compliance.
International Monetary Fund. Middle East and Central Asia Dept.
International Monetary Fund. Middle East and Central Asia Dept.
METAC assisted the Libyan Tax Authority in reviewing tax forms to enhance taxpayer data collection. The proposed data set will significantly expand existing information, improving the completeness of taxpayer records and greatly aiding the risk assessment process.
Telma Yamou
,
Alun H. Thomas
, and
Kaihao Cai
Telma Yamou
,
Alun H. Thomas
, and
Kaihao Cai
This paper examines the relationship between citizens’ perceptions of tax authorities and the governments’ efficiency in collecting VAT and CIT revenues in Africa. Drawing on data from 32 countries over 2014-2019, we find a negative and significant association between negative perceptions of trust in authorities (the tax department) from the Afrobarometer survey and tax efficiency for these revenue categories. A 1 percent increase in the share of citizens’ perception of little or no trust in the tax department leads to a 0.22 percent decrease in VAT tax efficiency, controlling for macroeconomic indicators. The magnitude of the effect is significantly greater in fragile compared to non-fragile states. For corporate income tax productivity focusing on tax payments of corporates we find a significant effect only in fragile states. Perceptions about corruption in tax authorities have a similar effect on VAT and CIT tax efficiency since perceptions about trust and corruption capture the tendency to misappropriate revenues but we are unable to distinguish the two effects except for fragile states. Our findings suggest that in the face of fragility, policies aimed at improving fiscal capacity should place a high importance on ensuring that citizens believe resources will be used properly, an aspect of tax policy not typically prioritized.
International Monetary Fund. Fiscal Affairs Dept.