Tax structures in developing countries: Many puzzles and a possible explanation

Roger H. Gordon and Wei Li

Journal of Public Economics, 2009, vol. 93, issue 7-8, pages 855-866

Abstract: Tax policies seen in developing countries are puzzling on many dimensions, given the sharp contrast between these policies and both those seen in developed countries and those forecast in the optimal tax literature. In this paper, we explore how forecasted policies change if firms can successfully evade taxes by conducting all business in cash, thereby avoiding any use of the financial sector. The forecasted policies are now much closer to those observed.

Keywords: Tax; policy; in; developing; countries; Informal; economy; Inflation; Tariffs; Red; tape; Capital; taxes; Corruption (search for similar items in EconPapers)
Date: 2009
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Related works:
Working Paper: Tax Structure in Developing Countries: Many Puzzles and a Possible Explanation (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:pubeco:v:93:y:2009:i:7-8:p:855-866

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