The Taxation Implicit in Two-Tiered Exchange Rate Systems

Harry Huizinga

No 1996/120, IMF Working Papers from International Monetary Fund

Abstract: A two-tiered exchange rate system can be interpreted as a set of separate taxes on money and other financial assets. If the official two-tiered exchange rate system coexists with a black market for foreign exchange, then there is implicit taxation of the international goods trade as well. This paper presents some evidence on the tax rates and tax revenues implicit in the exchange rate systems of The Bahamas (from 1978 to 1995), the Dominican Republic (from 1970 to 1984), and South Africa (from 1973 to 1995).

Keywords: WP; exchange rate system; investment income; black market; debt service; equilibrium exchange rate; government yield differential; systems of The Bahamas; government debt yield; overvalued import exchange rate; debt-service saving; investment tax; exchange rate practice; computed debt-service saving; two-tiered exchange rates; trade exchange rate; Exchange rates; Exchange rate arrangements; Multiple currency practices; Personal income; Market exchange rates; Africa (search for similar items in EconPapers)
Pages: 26
Date: 1996-11-01
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=2086 (application/pdf)

Related works:
Working Paper: The Taxation Implicit in Two-Tiered Exchange Rate Systems (1996)
Working Paper: The Taxation Implicit in Two-Tiered Exchange Rate Systems (1996)
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:1996/120

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 ().