Subnational Taxes in Developing Countries: The Way Forward
Institute for International Business Working Paper No. 16
36 Pages Posted: 29 Sep 2008
Date Written: September, 25 2008
This paper reviews the literature and evidence on the most appropriate structure of regional and local taxes in developing countries. A good subnational tax system is critical to an effective and sustainable system of intergovernmental fiscal relations - a need that has become increasingly important around the world as more and more public services are being delivered through subnational governments. In most developing countries potentially sound and productive taxes exist that are suitable for regional and local governments: property taxes, taxes on motor vehicles, surcharges on national personal income taxes, payroll taxes, and even, in some cases, regional value added taxes and properly designed local business taxes.
Keywords: local taxes, regional taxes, fiscal decentralization, developing countries
JEL Classification: H71, H77, O23
Suggested Citation: Suggested Citation