Quantifying the Revenue Yields from Tax Administration Reforms

Hassan Adan, Jean-Marc Atsebi, Nikolay Gueorguiev, Jiro Honda and Manabu Nose

No 2023/231, IMF Working Papers from International Monetary Fund

Abstract: Despite the criticality of tax administration (TA) reforms in enhancing domestic revenue mobilization, few studies have attempted to quantify the revenue impact of such reforms. This paper fills this gap by estimating the revenue yields associated with various tax administration capabilities, based on the International Survey on Tax Administration (ISORA), the Tax Administration Diagnostic Assessment Tool (TADAT), and TA reform episodes datasets (identified by Akitoby et al., 2020). It uses a Hausman-Taylor cross-country panel regression and an event study for specific TA reform episodes. Our results (using the ISORA data) show that an increase in the overall strength of TA from the 40th percentile to the 60th percentile is associated with an increase in tax revenue by 1.8 pp. of GDP (with a 95 percent confidence range of 0.5‒2.6 pp. of GDP). Similarly, the event-study assessment shows that sustained TA reforms led to an increase in tax revenues between 2 to 3 pp. of GDP, in line with the experience in three country cases (Jamaica, Rwanda, and Senegal). Also, the revenue yields are increasing over time to more than 3 pp. of GDP after the 6th year following a comprehensive reform. The analysis also highlights the significant impact of specific measures including: i) strengthening compliance risks management, ii) enhancing public accountability, iii) establishing Large Taxpayer Offices (LTO), iv) strengthening accountability and transparency, and v) enhancing timely filing of tax declarations.

Keywords: Tax Revenues Yields; Tax Administration; ISORA; TADAT; TA reform; TA reform episodes dataset; revenue yield; TA strength; IMF FAD Tax Administration; Tax administration core functions; International Survey on Revenue Administration (ISORA); Tax Administration Diagnostic and Assessment Tool (TADAT); Social security contributions; Global; Middle East; East Asia; North Africa; Central Asia (search for similar items in EconPapers)
Pages: 42
Date: 2023-11-10
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=541407 (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:imfwpa:2023/231

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 Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().