GUIDELINES FOR THE APPRAISAL OF TAX INCENTIVES IN MADAGASCAR

Glenn Jenkins (), Mikhail Miklyaev () and Amin Sokhanvar ()
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Mikhail Miklyaev: Department of Economics Queen’s University, Canada, and Cambridge Resource International Inc.
Amin Sokhanvar: Cambridge Resources International Inc.

No 2025-02, Development Discussion Papers from JDI Executive Programs

Abstract: This document provides a comprehensive analysis of tax incentives in Madagascar, offering policy recommendations to enhance efficiency, revenue generation, and economic growth. It examines key tax components, including excise taxes, the Value-Added Tax (VAT), trade taxes, and corporate tax incentives, identifying inefficiencies and proposing reforms to streamline administration and improve fiscal outcomes. The report highlights the need to simplify Madagascar’s excise tax system by narrowing the taxable goods range, reducing compliance costs, and improving public welfare. It also addresses VAT inefficiencies, noting that the country’s 359 exemptions undermine revenue potential and complicate tax administration. Recommendations include reducing unnecessary exemptions and enhancing compliance to boost fiscal sustainability. In trade taxation, the document advocates for optimizing import tariffs by eliminating excessive exemptions, thereby strengthening industrial growth and export competitiveness. Corporate tax incentives are assessed through Cost-Benefit Analysis (CBA) to ensure they generate genuine investment expansion and economic benefits. Additionally, the report emphasizes prioritizing public sector investments for climate resilience over private sector tax incentives, advocating for international support to address climate challenges effectively. By streamlining tax policies and aligning them with economic and social objectives, Madagascar can enhance revenue collection, promote sustainable investment, and strengthen climate resilience. These reforms will contribute to a more efficient, equitable, and growth-oriented tax system, supporting the country’s long-term development goals.

Keywords: Excise Taxes; Impact Analysis; Tax Incentives; Corporate Income Tax (CIT); Revenue Tax Administration; Tax Exemptions; Economic Efficiency; Value-Added Tax (VAT) (search for similar items in EconPapers)
JEL-codes: F13 H2 H21 H23 (search for similar items in EconPapers)
Pages: 52 Pages
Date: 2025-02-05
New Economics Papers: this item is included in nep-acc, nep-env, nep-inv, nep-pbe and nep-pub
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