How to Design Tax Policy in Fragile States

Mario Mansour and Jean-Luc Schneider

No 2019/004, IMF Fiscal Affairs Department from International Monetary Fund

Abstract: The purpose of this note is to provide a framework for improving tax policy design in fragile and conflict-affected states, which face political and institutional constraints. This note begins with an overview of experiences in revenue mobilization in fragile states, including relative to other country groups—in particular, nonfragile states and formerly fragile states; that is, countries that exited fragility during the period under study. A discussion follows of how the principles of tax policy design should be applied in fragile states, particularly the relative importance of the revenue objective vis-à-vis other objectives, such as equity and efficiency. The two sections that follow provide guidance on tax policy design in the emergency and consolidation phases, respectively, and discuss how governments can use tax policy to transition from one phase to another, eventually overcoming fragility. The note concludes with key lessons and a set of guiding principles for tax reform in fragile states.

Keywords: FADHTN; HTN; tax; firm; government; country; fragile state; control capacity; tax deductibility; business organization; customs duty; license sale; tax provision; harder-to-administer tax; tax inclusiveness; revenue-enhancing tax reform; tax concession; border tax; Consumption taxes; Personal income tax; Tax administration core functions; Value-added tax; West Africa; Global (search for similar items in EconPapers)
Pages: 29
Date: 2019-09-20
New Economics Papers: this item is included in nep-pbe
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=48512 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfhtn:2019/004

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Fiscal Affairs Department from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().