Tax Policy Options for a United Germany

International Monetary Fund

No 1990/089, IMF Working Papers from International Monetary Fund

Abstract: A central requirement in the rapid movement of German Democratic Republic (GDR) toward a market economy is the introduction of a market-oriented tax system. The paper highlights the main features of the traditional socialist tax structure of the GDR and the current tax structure of the Federal Republic of Germany (FRG). Arguments for an adequate short-term tax reform in the GDR are developed in two scenarios, contrasting the approach of taking over the FRG tax system (adoption scenario) and an autonomous tax reform in the GDR (reform scenario). Both scenarios recommend a flexible adjustment approach which anticipates the medium-term development of the German tax system pursuant to domestic reform requirements, international tax harmonization and fiscal federalism.

Keywords: WP; tax system; income tax; net profit; double taxation; indirect tax; wealth tax; tax rate; gift tax; lump sum; tax reform; Corporate income tax; Income and capital gains taxes; Income tax systems; Income; Personal income; Global (search for similar items in EconPapers)
Pages: 108
Date: 1990-01-01
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Citations: View citations in EconPapers (2)

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