Tax Capacity and Tax Effort : Extended Cross-Country Analysis from 1994 to 2009

Tax Capacity and Tax Effort : Extended Cross-Country Analysis from 1994 to 2009

One of the important factors for economic development is the existence of an effective tax system. This paper deals with the concept and empirical estimation of countries' taxable capacity and tax effort. It employs a cross-country study from...

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Bibliographic Details
Main Authors:	Le, Tuan Minh, Moreno-Dodson, Blanca, Bayraktar, Nihal
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	AGRICULTURE BANK POLICY BENCHMARK BENCHMARKS BUDGET DEFICIT BUDGET DEFICITS BUREAUCRATIC QUALITY BUSINESS CLIMATE BUSINESS CYCLE BUSINESS CYCLES CENTRAL GOVERNMENT COEFFICIENTS COMPLIANCE COSTS CONSUMPTION EXPENDITURE COUNTRY RISK DATA AVAILABILITY DEDUCTIONS DEMOGRAPHIC DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY EARNED INCOME TAX CREDIT ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC OUTLOOK ECONOMIC POLICIES ECONOMIC SECTORS ECONOMIC STRUCTURE ECONOMIC STRUCTURES EFFICIENCY OF TAX COLLECTION EFFICIENCY OF TAXES EXPENDITURE NEEDS EXPORTS FINANCIAL CRISIS FISCAL BALANCES FISCAL DECENTRALIZATION FISCAL POLICY GDP GDP PER CAPITA GLOBALIZATION GOOD GOVERNANCE GOVERNMENT REVENUE GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT GROSS VALUE GROWTH RATE GROWTH RATES INCOME INCOME GROUP INCOME GROUPS INCOME LEVEL INCOME LEVELS INCOME TAX INCOME TAXES INDEX NUMBERS INSURANCE INTERNATIONAL BANK INTERNATIONAL BUSINESS INTERNATIONAL DEVELOPMENT INTERNATIONAL STANDARD INTERNATIONAL TRADE INVESTMENT CLIMATE INVESTMENT DECISIONS LABOR MARKET LOW-INCOME COUNTRIES LOW-INCOME ECONOMIES MACROECONOMIC VARIABLES MARKET ECONOMY MARKET STANDARDS MIDDLE INCOME COUNTRIES MIDDLE-INCOME COUNTRIES MIDDLE-INCOME ECONOMIES MONETARY FUND NATURAL RESOURCES OPEN ECONOMIES OPEN MARKET OPEN MARKET ECONOMY OUTPUT OUTPUT GAP OUTPUTS PARTICULAR COUNTRY POLITICAL ECONOMY POLITICAL SYSTEM PRIVATE INVESTMENT PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FUNDS PUBLIC INVESTMENT PUBLIC REVENUE PUBLIC SPENDING REDISTRIBUTION REGRESSION ANALYSES REGRESSION ANALYSIS REGULATORY ENVIRONMENT REVENUE CAPACITY REVENUE COLLECTION REVENUE ENHANCEMENT REVENUE FORECASTING REVENUE INCREASES REVENUE MOBILIZATION REVENUE SOURCES STRUCTURAL ADJUSTMENT SUB-NATIONAL TAX TAX ADMINISTRATION TAX ADMINISTRATION PROCEDURES TAX BASE TAX BURDEN TAX CAPACITY TAX COLLECTION TAX COLLECTION PROCESS TAX EFFORT TAX EFFORT INDEXES TAX EFFORTS TAX EXPENDITURES TAX POLICIES TAX POLICY TAX PURPOSES TAX RATE TAX RATES TAX RATIO TAX RATIOS TAX REFORM TAX REFORMS TAX REGIMES TAX REVENUE TAX REVENUE PERFORMANCE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAX SYSTEMS TAXATION TAXATION POLICIES TRANSPARENCY VALUE ADDED VOLATILITY WAGES WORLD DEVELOPMENT INDICATOR WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2012/10/16876516/tax-capacity-tax-effort-extended-cross-country-analysis-1994-2009 http://hdl.handle.net/10986/12094

Description
Summary:	One of the important factors for economic development is the existence of an effective tax system. This paper deals with the concept and empirical estimation of countries' taxable capacity and tax effort. It employs a cross-country study from a sample of 110 developing and developed countries during 1994-2009. Taxable capacity refers to the predicted tax-to-gross domestic product ratio that can be estimated empirically, taking into account a country's specific macroeconomic, demographic, and institutional features, which all change through time. Tax effort is defined as an index of the ratio between the share of the actual tax collection in gross domestic product and taxable capacity. The use of tax effort and actual tax collection benchmarks allows the ranking of countries into four different groups: low tax collection, low tax effort; high tax collection, high tax effort; low tax collection, high tax effort; and high tax collection, low tax effort. The analysis provides broad guidance for tax reforms in countries with various levels of taxable capacity and revenue intake.

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