Case Studies in Tax Revenue Mobilization in Low-Income Countries

33 Pages Posted: 16 Jul 2019

See all articles by Bernardin Akitoby

Bernardin Akitoby

International Monetary Fund (IMF) - Fiscal Affairs Department

Jiro Honda

International Monetary Fund (IMF) - African Department

Hiroaki Miyamoto

International Monetary Fund (IMF)

Keyra Primus

International Monetary Fund (IMF)

Mouhamadou Sy

International Monetary Fund (IMF)

Date Written: May 2019

Abstract

How can Low-Income Countries (LICs) enhance tax revenue collection to finance their vast development needs? We address this question by analyzing seven tax reform experiences in LICs (Burkina Faso, The Gambia, Maldives, Mauritania, Rwanda, Senegal, and Uganda). Three lessons stand out, although reforms must be tailored to individual circumstances: (i) Tax reforms require first and foremost political commitment and buy-in from key stakeholders; (ii) Countries that pursue both revenue administration and tax policy reforms tend to see much larger and persistent gains; and (iii) A successful strategy often starts with fiscal reform measures with immediate effect to build momentum. These can include: simplifying the tax system; curbing exemptions; reforming indirect taxes on goods and services (e.g., excises); and better managing compliance risks through strengthening taxpayer segmentation (often beginning with strengthening the Large Taxpayers Office). A comprehensive reform strategy (e.g., a medium-term revenue strategy) can help to properly sequence reform measures and facilitate their implementation.

Keywords: Fiscal policy, Tax revenue, Tax reforms, Revenue measures, Tax rates, tax revenue mobilization, tax policy, revenue administration, reform strategy, percent of GDP, tax reform, total tax revenue, custom administration

JEL Classification: E62, H2, E01, K34, H83

Suggested Citation

Akitoby, Bernardin and Honda, Jiro and Miyamoto, Hiroaki and Primus, Keyra and Sy, Mouhamadou, Case Studies in Tax Revenue Mobilization in Low-Income Countries (May 2019). IMF Working Paper No. 19/104. Available at SSRN: https://ssrn.com/abstract=3404059

Bernardin Akitoby (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Jiro Honda

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Hiroaki Miyamoto

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Keyra Primus

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mouhamadou Sy

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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