Enhancing Tax Capacity: Revenue Gains from Strengthening Tax Administration

Jean-Marc Atsebi, Nikolay Gueorguiev and Manabu Nose

No 2025/219, IMF Working Papers from International Monetary Fund

Abstract: Building on previous studies, we propose a robust estimation strategy to uncover the causal effects of tax administration strength on tax revenue in 121 countries over the period 2014–2022. Our novel approach utilizes a unique expert survey to construct an Operational Strength Index of tax administration, using the International Survey on Revenue Administration (ISORA), and employs an instrumental variable strategy based on the IMF Fiscal Affairs Department’s Capacity Development programs. We find that strengthening tax administration significantly boosts tax revenue, particularly in emerging and developing economies, and especially in countries with lower levels of informality, stronger institutions, and higher financial development. These findings carry important policy implications for governments and development partners aiming to enhance tax administration capacity and strengthen public finances overall.

Keywords: Tax Administration; Tax Policy; ISORA; tax capacity; governance quality; IMF working papers; administration practice; Fiscal Affairs Department seminar; Tax administration core functions; Administration in revenue administration; Financial sector development; Revenue mobilization; Global (search for similar items in EconPapers)
Pages: 75
Date: 2025-10-24
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=571373 (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:2025/219

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 ().