Assessing Domestic Revenue Mobilization : Analytical Tools and Techniques
The main objective of this paper is to provide support for the World Bank’s task team leaders of PERs that would include a chapter on taxation. It seeks to provide broad guidance for the TTLs to: (a) Lead dialogues with client countries on the scop...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/10/26842018/assessing-domestic-revenue-mobilization-analytical-tools-techniques http://hdl.handle.net/10986/25290 |
| Summary: | The main objective of this paper is to
provide support for the World Bank’s task team leaders of
PERs that would include a chapter on taxation. It seeks to
provide broad guidance for the TTLs to: (a) Lead dialogues
with client countries on the scope of the tax chapter in
view of Government’s on-going and planned reforms of tax
policy and/or tax administration; (b) Evaluate the magnitude
of data requirements and limitations in the country-specific
context; and (c) Establish an appropriate team, particularly
consider selection of technical staff or consultant and
discuss with the team on scope of the chapter on taxation
and suitable analytical tools and techniques to be applied.
The paper may also serve as a helpful input on tax
components in the preparation of lending operations, in this
way supplementing other diagnostic tools. To serve these
objectives, the paper aims to presents an overview of major
taxes and respective list of data requirements as well as
possible sources; tool and techniques in assessing the
efficiency, effectiveness and equity in tax policy design
(at both national and sub-national levels) and tax
administration. In doing so, the authors acknowledge that
this is not a straightforward task. No one-size-fits-all
approach would exist to covering the revenue chapter, and
this is driven by the complexities on the ground in terms of
(1) the existing literature, and the mismatch between
rigorous application of appropriate tools and techniques on
the one hand and data available on the other; (2) existence
of or immediate plan for parallel studies on tax revenues
(including the IMF TA on tax policy and administration being
provided); (3) the country’s economic structure, including
the factors such as country’s abundance of extractive
resources or aid dependence; and (4) the government’s
requests for further support in revenue mobilization (tax
policy or administration or both). This paper consists of
four parts. The first part discusses major taxes at the
national or central level of government with a reference to
generally accepted notion or principles of a ‘good’ tax
system. Part two is focused on the major tools and
techniques for analysis of the performance of a tax system
and of tax expenditures. The discussion of revenue modeling
covers different methods, such as GDP based,
micro-simulation, national accounts/inputs-outputs tables
based and regression analyses. Part three sheds light on
subnational government taxation. It covers the revenue
issues at both at the regional and local levels. In
addition, it introduces a framework on measuring taxing
powers at subnational level, with a view to ensure
appropriate ground for the fiscal dialog across levels of
government. Finally, part four points to potential questions
to assist in assessing the strengths and weaknesses in tax
administration, drawing on Jit Gill (2000) and the newly
developed tax administration diagnostic tool TADAT (2016). |
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