Front Matter

Front Matter

Liam Ebrill
Published Date:
August 1999
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    Tax Reform in the Baltics, Russia, and Other Countries of the Former Soviet Union

    By a Staff Team led by Liam Ebrill and Oleh Havrylyshyn


    Washington DC


    © 1999 International Monetary Fund

    Production: IMF Graphics Section

    Figures: In-Ok Yoon

    Typesetting: Choon Lee

    Library of Congress Cataloging-in-Publication Data

    Tax reform in the Baltics, Russia, and other countries of the former Soviet Union / by a staff team led by Liam Ebrill and Oleh Havrylyshyn.

    p. cm. – (Occasional paper, ISSN 0251-6365 ; no. 182)

    Includes bibliographical references (p.).

    ISBN 1-55775-802-6

    1. Taxation–Former soviet republics. I. Ebrill, Liam P.

    II. Havrylyshyn, Oli. III. International Monetary Fund.

    IV. Series: Occasional paper (International Monetary Fund); no. 182.

    V. Series: Occasional paper (International Monetary Fund). Issues in transition.

    HJ2803.T39 1999




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    I. Overview

    II. Recent Revenue Developments

    III. Status of Reform and Developments Since 1997

    IV. Summary and Conclusion












    1. General Government Revenue

    • The following symbols have been used throughout this paper:

    • … to indicate that data are not available;

    • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

    • – between years or months (e.g., 1994–95 or January–June) to indicate the years or months covered, including the beginning and ending years or months;

    • / between years (e.g., 1994/95) to indicate a crop or fiscal (financial) year.

    “Billion” means a thousand million.

    Minor discrepancies between constituent figures and totals are due to rounding.

    The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.


    Since 1992, the IMF has supported the process of transition in the countries of the Commonwealth of Independent States (CIS), as well as in other transition economies, by providing financial support, working closely with authorities in designing stabilization, adjustment, and structural reform programs, and providing technical assistance. One important element of this work has been the reform of tax policy and tax administration. This area is not only one of the structural pillars of the transition, but took on special importance in most of the CIS countries as they experienced a sometimes dramatic decline in collected revenues.

    This paper provides an overview of the recent revenue performance in the Baltics, Russia, and other countries of the former Soviet Union, and a survey of these countries’ efforts to modify tax policy in line with the needs of increasingly market-oriented economies and to increase the effectiveness of tax administration. It focuses principally on the 12 countries of the CIS, but refers also to the Baltic countries, and addresses the period from 1995 to mid-1998, prior to the August 1998 financial crisis in Russia. For Russia, the recent crisis was partly a result of poor revenue collection, and has itself led to worsening of revenue performance. What further impacts the crisis and its spillover effects may ultimately have on the CIS countries’ revenues and tax structure remain to be seen.

    The paper is a joint effort of the European 2 Department (EU2) and the Fiscal Affairs Department (FAD), and grew out of earlier internal IMF work on revenue and tax structure issues in the CIS. The paper was coordinated by Oleh Havrylyshyn (EU2) and Liam Ebrill (FAD), and is the product of much input from many people. In EU2, Marta Castello-Branco provided much of the initial labor, supported by members of the mission teams for the CIS countries. In FAD, Emil Sunley, John Crotty, Charles Vehorn, Katherine Baer. and Victoria Summers all worked on various phases of the project, with support and input from many fiscal economists.

    The team is grateful to John Odling-Smee, Donal Donovan, Peter Heller, Jeff Davis, Lorenzo Perez, and Lorenzo Figliuoli for comments; to Lyndsey Livingstone and Ena Baldwin for assistance in preparation of the final text and Occasional Paper; to Joan Campayne, Grace Moss, Marcela Toso, for work on the initial drafts; and to Anna Unigovskaya for research assistance. Jeff Hayden of the External Relations Department edited the report and coordinated its publication.

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