APPENDIX: Description of Export Taxes in Selected Countries
This appendix briefly describes the export taxes and marketing board operations in the principal agricultural-commodity export countries after the Korean war. Attention is focused on the major tax policy and revenue changes, where data are available.
Mr. Goode, Director of the Fiscal Affairs Department, was formerly a staff member of the Brookings Institution, Washington; economist at the U.S. Treasury Department and the U.S. Bureau of the Budget; and assistant professor of economics at the University of Chicago.
Mr. Lent, Chief of the Tax Policy Division, formerly served as assistant director of the tax analysis staff, U.S. Treasury Department; consultant, Organization of American States; and research associate, National Bureau of Economic Research, New York. He taught at the University of North Carolina and Dartmouth College.
Mr. Ojha, economist in the Fiscal Affairs Department, was formerly Deputy Director of Research in the Reserve Bank of India; and professor and head of the Department of Economics at D.H. National and K.C. Colleges, Bombay. He taught at the University of Bombay and served as Fund advisor to the Government of Malaysia.
For a classification of these purposes see Jonathan V. Levin, The Export Economies: Their Pattern of Development in Historical Perspective (Cambridge, Massachusetts, 1960), pp. 263-64.
League of Nations, Economic and Financial Section, International Economic Conference, Export Duties (Geneva, 1927), p. 3.
Ibid., pp. 5-6; Lynn Ramsay Edminister, “Export Duties,” in Encyclopaedia of the Social Sciences (New York, 1931), Vol. VI, pp. 21-23.
Edminister, op. cit.; Florence K. Ioannu and Roberta P. Wakefield, Export Duties of the World, U.S. Department of Commerce, Bureau of Foreign and Domestic Commerce, Foreign Tariff Series, No. 42 (Washington, 1927), pp. 1-2.
George Wythe, Industry in Latin America, 2nd ed. (New York, 1949), pp. 15, 48,70-71.
D. Walker, “Marketing Boards,” in Economic Development, edited by E.A.G. Robinson, International Economic Association (London, 1965), pp. 574-96; Levin, op. cit., pp. 221-24.
G. K. Helleiner, “The Fiscal Role of the Marketing Boards in Nigerian Economic Development, 1947-61,” The Economic Journal, Vol. LXXIV (1964), pp. 582-605.
See John M. Clark, “Export Taxes on Tropical Products,” Monthly Bulletin of Agricultural Economics and Statistics (Rome), UN Food and Agriculture Organization, Vol. 12, No. 5 (1963), pp. 10-15; and Kenneth J. Rothwell, “Taxes on Exports in Underdeveloped Countries,” Public Finance (The Hague), Vol. XVIII, No. ¾ (1963), pp. 310-25.
In Uganda, marketing board deficits for both coffee and cotton exceeded export duties in 1961/62. Ghana’s Cocoa Marketing Board realized deficits in each of the three years 1960/61 to 1962/63, and revenues from export duties declined sharply over this period.
Ceylon, Report of the Taxation Commission, Sessional Paper XVIII (Colombo, 1955).
George W. Stocking and Myron W. Watkins, Cartels in Action: Case Studies in International Business Diplomacy (New York, 1946), pp. 118-70.
In his study of rice production in Thailand, Ayal concludes that everyone in the production-marketing process pays a part of the export tax—exporters, millers, middlemen, and farmers. This backward shifting is attributed to the fact that elasticity of supply at all stages is smaller than elasticity of demand (Eliezer B. Ayal, “The Impact of Export Taxes on the Domestic Economy of Underdeveloped Countries,” The Journal of Development Studies (London), Vol. One (July 1965), p. 344).
John H. Adler, Eugene P. Schlesinger, and Ernest C. Olson, Public Finance and Economic Development in Guatemala (Stanford, California, 1952), pp. 100-102.
Henry C. Wallich and John H. Adler, Public Finance in a Developing Country: El Salvador—A Case Study (Cambridge, Massachusetts, 1951), pp. 125-26.
Edwin P. Reubens, “Commodity Trade, Export Taxes and Economic Development,” Political Science Quarterly, Vol. LXXI (1956), pp. 43-59.
Douglas S. Paauw, Financing Economic Development: The Indonesian Case (Glencoe, Illinois, 1960), pp. 230-44.
Where exports are controlled by an international commodity agreement or similar arrangement, the linkage between supply elasticity and export volume may be loose. See below.
See, for example, William J. Barber, “Economic Rationality and Behavior Patterns in an Underdeveloped Area: A Case Study of African Economic Behavior in the Rhodesias,” Economic Development and Cultural Change, University of Chicago, Vol. VIII (1960), pp. 237-51; P.T. Bauer and B.S. Yamey, “A Case Study of Response to Price in an Underdeveloped Country,” Notes and Memoranda, The Economic Journal, Vol. LXIX (1959), pp. 800-805; Brij Raj Chauhan, “Rise and Decline of a Cash Crop in an Indian Village,” Journal of Farm Economics (Ames, Iowa), Vol. 42 (1960), pp. 663-66; Edwin R. Dean, “Economic Analysis and African Responses to Price,” Journal of Farm Economics, Vol. 47 (1965), pp. 402-409; Walter P. Falcon, “Farmer Response to Price in a Subsistence Economy: The Case of West Pakistan,” The American Economic Review, Vol. LIV (1964), pp. 580-91; Raj Krishna, “Farm Supply Response in India-Pakistan: A Case Study of the Punjab Region,” The Economic Journal, Vol. LXXIII (1963), pp. 477-87; Dharm Narain, Impact of Price Movements on Areas Under Selected Crops in India, 1900–1939 (Cambridge, 1965); C.E. Staley, “A Case Study of Response to Agricultural Prices in Costa Rica,” The Economic Journal, Vol. LXXI (1961), pp. 432-36; Robert M. Stern, “The Price Responsiveness of Primary Producers,” The Review of Economics and Statistics (Cambridge, Massachusetts), Vol. XLIV (1962), pp. 202-207.
Robert M. Stern, “The Price Responsiveness of Egyptian Cotton Producers,” Kyklos (Basle), Vol. XII (1959), pp. 375-84.
R.S. Porter, “Comments on Professor Nurkse’s Paper,” Kyklos, Vol. XI (1958), pp. 231-43.
Dean, op. cit.
P.T. Bauer and F.W. Paish, “The Reduction of Fluctuations in the Incomes of Primary Producers,” The Economic Journal, Vol. LXII (1952), p. 760.
Robert M. Stern, “Malayan Rubber Production, Inventory Holdings, and the Elasticity of Export Supply,” The Southern Economic Journal, Vol. XXXI (1965), pp. 314-23.
P.T. Bauer and F.W. Paish, “The Reduction of Fluctuations in the Incomes of Primary Producers Further Considered,” The Economic Journal, Vol. LXIV (1954), pp. 708-709; P. Ady, “Trends in Cocoa Production: British West Africa,” Oxford University, Institute of Statistics, Bulletin, Vol. 11 (1949), pp. 398-99.
United Nations, Commodity Survey, 1958 (New York, 1959), pp. 1-58.
Paauw, op. cit., pp. 185-245.
R. Galletti, K.D.S. Baldwin, and I.O. Dina, Nigerian Cocoa Farmers: An Economic Survey of Yoruba Cocoa Farming Families, Nigerian Cocoa Marketing Board (London, 1956), pp. 3-4.
Ady, op. cit., pp. 389-404.
Merrill J. Bateman, “Aggregate and Regional Supply Functions for Ghanaian Cocoa, 1946-62,” Journal of Farm Economics, Vol. 47 (1965), pp. 384-401. Bateman estimates elasticity of production with respect to prices of relevant prior years at 0.42 to 0.87 in different regions.
Economic Research Bureau, Commodity Year Book, 1964 (New York, 1964).
During the 1930’s the duties which were removed or repealed, in spite of budget difficulties, exceeded in importance those which were increased. See Margaret S. Gordon, Barriers to World Trade: A Study of Recent Commercial Policy (New York, 1941), pp. 350-51.
Paauw, op. cit., p. 241.
See, for example, W. Arthur Lewis, The Theory of Economic Growth (Home-wood, Illinois, 1954), p. 291; and United Nations, Technical Assistance Administration, “Fiscal Policies for Under-Developed Economies,” Taxes and Fiscal Policy in Under-Developed Countries, ST/TAA/M/8 (New York, 1954), pp. 12-
Cf. Levin, op. cit., p. 211.
In Malaya, income tax rates levied on profits of a company were revised upward; in Indonesia, exchange certificates were introduced to support export levies.
See United Nations, Economic Commission for Asia and the Far East, Economic Survey of Asia and the Far East, 1951 (New York, 1952), pp. 185-228; and United Nations, Department of Economic and Social Affairs, World Economic Report, 1950-53, and Summary of Recent Economic Developments, regional supplements to World Economic Report, 1950-53. See also Reubens, op. cit., pp. 59-61.
United Nations, World Economic Survey, 1957 (New York, 1958), p. 99.
Charles E. Staley, “Export Taxes in Ceylon, 1948-52,” Public Finance, Vol. XIV (1959), pp. 249-65.
Ragnar Nurkse, “Trade Fluctuations and Buffer Policies of Low-Income Countries,” Kyklos, Vol. XI (1958), pp. 141-54. See also the forceful statement of this position by H. W. Singer in the introduction to “Primary Producing Countries, Symposium II,” Kyklos, Vol. XII (1959), pp. 273-74.
P.T. Bauer and F.W. Paish, “Comments on Professor Nurkse’s Paper,” Kyklos, Vol. XI (1958}, p. 176.
Alexandre Kafka, “The Elasticity of Export Supply,” The Southern Economic Journal, Vol. XXXII (1966), p. 352.
Ifigenia M. de Navarrete, “Agricultural and Land Taxation,” in Government Finance and Economic Development, Third Study Conference on Problems of Economic Development held at Athens, December 1963, Organization for Economic Cooperation and Development (Paris, 1965), pp. 195-210.
Andreas S. Gerakis and Haskell P. Wald, “Economic Stabilization and Progress in Greece, 1953-61,” Staff Papers, Vol. XI (1964), p. 128.
India, Ministry of Commerce and Industry, Report of the Official Team on the Tea Industry (New Delhi, 1952), p. 28.
For example, in Ceylon with respect to tea (see Appendix, p. 484).
Report of the Taxation Commission (cited in fn. 11); and Staley (1959), op. cit.
See, for example, Alfred Marshall, Money, Credit and Commerce (London, 1929), pp. 177-209; A.C. Pigou, A Study in Public Finance, 3rd ed., revised (London, 1949), pp. 193-202; and Earl R. Rolph, The Theory of Fiscal Economics (Berkeley and Los Angeles, 1954), pp. 172-226. Marshall, nevertheless, said: “The considerations which can be urged for and against the levying of an import tax on a particular commodity differ widely from those appropriate to a particular export tax …” (op. cit., p. 180).
A similar system had been proposed in 1926 by the Woods Commission on Taxation.
See Report of the Taxation Commission (cited in fn. 11), pp. 270-79; and Staley (1959), op. cit.
In 1963, the biggest decline in prices was for high-grown tea although the decline affected all grades of tea sold at Colombo auctions. The decline is partly attributed to variations in quality of tea offered. “Nevertheless, there does appear to be evidence that the entry into the market of plain teas of poor leaf appearance, or unattractive liquor and not sufficiently well made, has also had on occasion a depressing effect on prices” (Central Bank of Ceylon, Annual Report (Colombo, 1963), p. 41).
In addition to the export duty, under Subsection (1) of Section 25 of the Tea Act, 1953, a cess is collected at the rate of Rs 4.40 per 100 kilograms on all teas exported; this worked out at 0.8 per cent of the 1962 average price per kilogram. The cess is credited to the Consolidated Fund of the Government of India, from which allotment of funds is made periodically to the Tea Board for the purposes of research, publicity, etc. The Tea Board also realizes fees for export licenses issued by it at the rate of Rs 2.20 per 1,000 kilograms. Besides, some of the state governments also impose sales and entry taxes on tea; see Tea Board, Ninth Administration Report (Calcutta, 1963), pp. 13-15. The Government also has levied an excise duty on tea since 1954; a part of the duty, however, is refundable when the tea is exported.
The Government did not quite implement the rate structure recommended by the Commission; for instance, the Commission had recommended abolition of duty on prices under 60 cents a pound.
For a detailed review of the rubber export duty in Malaya, see Lim Chong Yah, “Export Taxes on Rubber in Malaya—A Survey of Post-War Development,” The lournal of the Malayan Economic Review, Vol. V, No. V (1960), pp. 46-58.
Paauw, op. cit., pp. 182-90.
See Ayal, op. cit.
See Levin, op. cit.
For a discussion of this system, see Douglas B. Copland, “Australia and International Economic Equilibrium,” Economia Internationale (Genoa), Vol. IV, No. 1 (1951), pp. 49-50.
These minimums were (per ton) cocoa £150, cotton £325, groundnuts £65, palm kernels £50, and edible palm oil £75.
See Polly Hill, The Gold Coast Cocoa Farmer: A Preliminary Survey (London, 1956), pp. 112-13.
Effective July 19, 1965, the Ghana pound was replaced by the cedi (¢l = US$1.17).
International Bank for Reconstruction and Development, The Economic Development of Uganda (Baltimore, 1962), pp. 17-20; Walker, op. cit., pp. 574-98.
American, Wilds variety, LSd 0.5 per kantar of 100 rotls (99 pounds); American (other types), Lugata, Shawabik, and Scarto types are assessed at LSd 0.4 per kantar; Sakel types at LSd 1 per kantar; linters at LSd 0.25 per kantar; and Acala at LSd 0.7 per kantar.
U.S. Tariff Commission, Economic Controls and Commercial Policy in Argentina (Washington, 1945), p. 13.