Is the WTO a World Tax Organization?: A Primer for WTO Rules for Policy Makers

Michael Daly

No 2016/003, IMF Technical Notes and Manuals from International Monetary Fund

Abstract: This paper examines the extent to which World Trade Organization (WTO) rules impinge on policymakers’ freedom to formulate tax policies. It provides an overview of both the economic rationale for WTO rules concerning taxation and the provisions of the main WTO agreements concerning border taxes and internal taxes (direct as well as indirect). It also points out some tax anomalies and inconsistencies in these rules, and how the rules have evolved as a consequence of the interpretation of the WTO agreements by its Dispute Settlement Body and the latter’s rulings in connection with several disputes over taxes affecting trade. As WTO Members will undoubtedly want to avoid having their tax policies successfully challenged in the WTO, the paper provides some guidance concerning the design of tax policy.

Keywords: TNM; WTO rule; double taxation; sales tax; tax rate; export tax; tax incentive; tax; trade; tax measure; WTO agreement; article III; import tariff; tax relief; trade diversion; Tariffs; Exports; General Agreement on Tariffs and Trade; Income and capital gains taxes; Consumption taxes; Global (search for similar items in EconPapers)
Pages: 54
Date: 2016-03-29
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Citations: View citations in EconPapers (3)

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