Building Tax Capacity in Developing Countries

Juan Carlos Benitez, Mario Mansour, Miguel Pecho and Charles Vellutini

No 2023/006, IMF Staff Discussion Notes from International Monetary Fund

Abstract: Tax capacity—the policy, institutional, and technical capabilities to collect tax revenue—is part of a deeper process of state building that is essential for achieving the sustainable development goals. This Staff Discussion Note shows that developing countries have made some progress in revenue mobilization during the past decades. However, much more is needed. We find that a staggering 9 percentage-point increase in the tax-to-GDP ratio is feasible through a combination of tax system reform and institutional capacity building. Achieving this calls for a holistic and institution-based approach that focuses on improving policy, administration and legal implementation of core taxes. The note offers practical lessons and guidance, based on IMF capacity building experience in this area.

Keywords: Taxation; development; institutions; tax capacity; building tax analysis capacity; tax Effort estimate; tax potential; analysis capacity; VAT revenue; Tax administration core functions; Value-added tax; Property tax; Tax law; Global; Sub-Saharan Africa; Middle East and Central Asia; Western Hemisphere; Asia and Pacific (search for similar items in EconPapers)
Pages: 32
Date: 2023-09-19
New Economics Papers: this item is included in nep-pbe
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=535449 (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:imfsdn:2023/006

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