Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?

A revenue-neutral switch from trade taxes to domestic consumption taxes is fraught with implementation challenges in countries with a large informal sector. It is shown for a sample of low-income countries over 25 years that they have had a mixed r...

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Bibliographic Details
Main Author: Wagle, Swarnim
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
GDP
GNP
TAX
WTO
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111216211610
http://hdl.handle.net/10986/3689
id okr-10986-3689
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCOUNTING
ADMINISTRATION OF JUSTICE
AGRICULTURE
APPAREL
APPLIED TARIFF
AVERAGE TARIFF
BOND
BUDGET CONSTRAINT
CAPACITY CONSTRAINTS
CAPITAL GOODS
CHECKS
CLASSICAL ECONOMICS
COLLECTED TARIFF
COLLECTED TARIFFS
CONSUMER GOODS
CONSUMER PRICES
CONSUMERS
COST OF COLLECTION
CUSTOMS
CUSTOMS ADMINISTRATION
CUSTOMS AUTHORITIES
CUSTOMS UNIONS
DEFAULT CASE
DEMAND ELASTICITIES
DEMAND ELASTICITY
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT BANK
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DOMESTIC CONSUMPTION
DOMESTIC INDUSTRIES
DOMESTIC PRICE
DOMESTIC PRODUCERS
DOMESTIC PRODUCTION
DOMESTIC SALES
DOMESTIC TAX SYSTEM
DOMESTIC TAXES
ECONOMETRICS
ECONOMIC POLICIES
ECONOMIC POLICY
ECONOMIC THEORY
ECONOMIC WELFARE
ELASTICITY OF SUBSTITUTION
ELIMINATION OF TARIFFS
EQUIPMENT
EXCHANGE RATES
EXCISE DUTIES
EXCISE TAXES
EXPENDITURE
EXPENDITURES
EXPORT CLAUSE
EXPORT PROMOTION
EXPORT TAXES
EXPORTER
EXPORTERS
EXPORTS
EXTERNALITIES
FINAL GOODS
FISCAL DEFICIT
FISCAL POLICY
FOREIGN EXCHANGE
FOREIGN PRODUCTS
FOREIGN TRADE
FREE TRADE
FREE TRADE AGREEMENT
FREE TRADE AREA
FREE TRADE AREAS
FREE TRADE ZONE
GDP
GDP PER CAPITA
GENERAL AGREEMENT ON TARIFFS
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GNP
GOVERNMENT EXPENDITURES
GOVERNMENT FINANCE
GOVERNMENT REVENUE
GOVERNMENT REVENUES
GROSS DOMESTIC PRODUCT
HIGH TARIFFS
IMPACT OF TRADE
IMPACT OF TRADE LIBERALIZATION
IMPORT DATA
IMPORT DUTIES
IMPORT DUTY
IMPORT FIGURES
IMPORT LICENSING
IMPORT SUBSTITUTION
IMPORT TARIFFS
IMPORT VALUE
IMPORTS
INCOME LEVELS
INCOME TAX
INCOME TAXES
INFLATION
INSTITUTIONAL CAPACITY
INSURANCE
INTEREST BURDEN
INTERMEDIATE GOODS
INTERNATIONAL BANK
INTERNATIONAL ECONOMICS
INTERNATIONAL ORGANIZATIONS
INTERNATIONAL STANDARD
INTERNATIONAL TRADE
LDCS
LEVEL OF PROTECTION
LEVY
LIBERALIZATION OF TRADE
LOCAL MARKET
LOSS OF REVENUE
LOSS OF TARIFF REVENUE
LOW TARIFFS
MARGINAL REVENUE
MARGINAL VALUE
MONETARY FUND
MOST FAVORED NATION
MULTILATERAL REFORMS
NATIONAL INCOME
NATURAL RESOURCES
OPEN ECONOMIES
OPEN ECONOMY
OPENNESS
PER CAPITA INCOME
PERSONAL INCOME
POLICY RESPONSES
POLITICAL ECONOMY
PREFERENTIAL RATES
PREFERENTIAL TARIFF
PREFERENTIAL TARIFF RATE
PRICE CHANGE
PRICE CHANGES
PRICE EFFECTS
PRICE ELASTICITY
PRICE OF IMPORTS
PRODUCTION EFFICIENCY
PRODUCTION FUNCTIONS
PROTECTIONIST
PROTECTIONIST BIAS
PUBLIC FINANCE
REGIONAL TRADE
RETURNS
TARIFF ELIMINATION
TARIFF EXEMPTIONS
TARIFF INCREASES
TARIFF LEVELS
TARIFF LINES
TARIFF RATE
TARIFF RATES
TARIFF REDUCTION
TARIFF REFORM
TARIFF REVENUE
TARIFF REVENUES
TARIFF STRUCTURE
TAX
TAX COLLECTION
TAX CREDIT
TAX POLICY
TAX RATES
TAX REGIME
TAX REVENUE
TAX REVENUES
TAX SYSTEM
TAXATION
TOTAL REVENUE
TRADE ADJUSTMENT
TRADE AGREEMENTS
TRADE BLOCS
TRADE DISTORTIONS
TRADE LIBERALIZATION
TRADE MORE
TRADE NEGOTIATIONS
TRADE POLICY
TRADE POLICY REFORM
TRADE POLICY REFORMS
TRADE PRACTICES
TRADE PROTECTION
TRADE REFORM
TRADE REFORMS
TRADE TAX
TRADE TAXES
TRADE VALUE
TRADING
TRADING PARTNERS
TRANSACTION
TRANSITION COUNTRIES
UTILITY FUNCTION
VALUATION
VALUE ADDED
VALUE OF IMPORTS
VALUE OF OUTPUT
WEALTH
WELFARE GAINS
WITHHOLDING TAXES
WORLD PRICE
WORLD TRADE
WORLD TRADE ORGANIZATION
WTO
ZERO TARIFF
ZERO TARIFFS
spellingShingle ACCOUNTING
ADMINISTRATION OF JUSTICE
AGRICULTURE
APPAREL
APPLIED TARIFF
AVERAGE TARIFF
BOND
BUDGET CONSTRAINT
CAPACITY CONSTRAINTS
CAPITAL GOODS
CHECKS
CLASSICAL ECONOMICS
COLLECTED TARIFF
COLLECTED TARIFFS
CONSUMER GOODS
CONSUMER PRICES
CONSUMERS
COST OF COLLECTION
CUSTOMS
CUSTOMS ADMINISTRATION
CUSTOMS AUTHORITIES
CUSTOMS UNIONS
DEFAULT CASE
DEMAND ELASTICITIES
DEMAND ELASTICITY
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT BANK
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DOMESTIC CONSUMPTION
DOMESTIC INDUSTRIES
DOMESTIC PRICE
DOMESTIC PRODUCERS
DOMESTIC PRODUCTION
DOMESTIC SALES
DOMESTIC TAX SYSTEM
DOMESTIC TAXES
ECONOMETRICS
ECONOMIC POLICIES
ECONOMIC POLICY
ECONOMIC THEORY
ECONOMIC WELFARE
ELASTICITY OF SUBSTITUTION
ELIMINATION OF TARIFFS
EQUIPMENT
EXCHANGE RATES
EXCISE DUTIES
EXCISE TAXES
EXPENDITURE
EXPENDITURES
EXPORT CLAUSE
EXPORT PROMOTION
EXPORT TAXES
EXPORTER
EXPORTERS
EXPORTS
EXTERNALITIES
FINAL GOODS
FISCAL DEFICIT
FISCAL POLICY
FOREIGN EXCHANGE
FOREIGN PRODUCTS
FOREIGN TRADE
FREE TRADE
FREE TRADE AGREEMENT
FREE TRADE AREA
FREE TRADE AREAS
FREE TRADE ZONE
GDP
GDP PER CAPITA
GENERAL AGREEMENT ON TARIFFS
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GNP
GOVERNMENT EXPENDITURES
GOVERNMENT FINANCE
GOVERNMENT REVENUE
GOVERNMENT REVENUES
GROSS DOMESTIC PRODUCT
HIGH TARIFFS
IMPACT OF TRADE
IMPACT OF TRADE LIBERALIZATION
IMPORT DATA
IMPORT DUTIES
IMPORT DUTY
IMPORT FIGURES
IMPORT LICENSING
IMPORT SUBSTITUTION
IMPORT TARIFFS
IMPORT VALUE
IMPORTS
INCOME LEVELS
INCOME TAX
INCOME TAXES
INFLATION
INSTITUTIONAL CAPACITY
INSURANCE
INTEREST BURDEN
INTERMEDIATE GOODS
INTERNATIONAL BANK
INTERNATIONAL ECONOMICS
INTERNATIONAL ORGANIZATIONS
INTERNATIONAL STANDARD
INTERNATIONAL TRADE
LDCS
LEVEL OF PROTECTION
LEVY
LIBERALIZATION OF TRADE
LOCAL MARKET
LOSS OF REVENUE
LOSS OF TARIFF REVENUE
LOW TARIFFS
MARGINAL REVENUE
MARGINAL VALUE
MONETARY FUND
MOST FAVORED NATION
MULTILATERAL REFORMS
NATIONAL INCOME
NATURAL RESOURCES
OPEN ECONOMIES
OPEN ECONOMY
OPENNESS
PER CAPITA INCOME
PERSONAL INCOME
POLICY RESPONSES
POLITICAL ECONOMY
PREFERENTIAL RATES
PREFERENTIAL TARIFF
PREFERENTIAL TARIFF RATE
PRICE CHANGE
PRICE CHANGES
PRICE EFFECTS
PRICE ELASTICITY
PRICE OF IMPORTS
PRODUCTION EFFICIENCY
PRODUCTION FUNCTIONS
PROTECTIONIST
PROTECTIONIST BIAS
PUBLIC FINANCE
REGIONAL TRADE
RETURNS
TARIFF ELIMINATION
TARIFF EXEMPTIONS
TARIFF INCREASES
TARIFF LEVELS
TARIFF LINES
TARIFF RATE
TARIFF RATES
TARIFF REDUCTION
TARIFF REFORM
TARIFF REVENUE
TARIFF REVENUES
TARIFF STRUCTURE
TAX
TAX COLLECTION
TAX CREDIT
TAX POLICY
TAX RATES
TAX REGIME
TAX REVENUE
TAX REVENUES
TAX SYSTEM
TAXATION
TOTAL REVENUE
TRADE ADJUSTMENT
TRADE AGREEMENTS
TRADE BLOCS
TRADE DISTORTIONS
TRADE LIBERALIZATION
TRADE MORE
TRADE NEGOTIATIONS
TRADE POLICY
TRADE POLICY REFORM
TRADE POLICY REFORMS
TRADE PRACTICES
TRADE PROTECTION
TRADE REFORM
TRADE REFORMS
TRADE TAX
TRADE TAXES
TRADE VALUE
TRADING
TRADING PARTNERS
TRANSACTION
TRANSITION COUNTRIES
UTILITY FUNCTION
VALUATION
VALUE ADDED
VALUE OF IMPORTS
VALUE OF OUTPUT
WEALTH
WELFARE GAINS
WITHHOLDING TAXES
WORLD PRICE
WORLD TRADE
WORLD TRADE ORGANIZATION
WTO
ZERO TARIFF
ZERO TARIFFS
Wagle, Swarnim
Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?
geographic_facet The World Region
The World Region
relation Policy Research working paper ; no. WPS 5919
description A revenue-neutral switch from trade taxes to domestic consumption taxes is fraught with implementation challenges in countries with a large informal sector. It is shown for a sample of low-income countries over 25 years that they have had a mixed record of offsetting reductions in trade tax revenue. The paper then analyzes the specific case of Nepal, using a unique data set compiled from unpublished customs records of imports, tariffs and all other taxes levied at the border. It estimates changes to revenue and domestic production associated with two sets of reforms: i) proportional tariff cuts coordinated with a strictly enforced value-added tax; and ii) proposed tariff cuts under a regional free trade agreement. It is shown that a revenue-neutral tax reform is conditional on the effectiveness with which domestic taxes are enforced. Furthermore, loss of revenue as a result of intra-regional free trade can be minimized through judicious use of Sensitive Lists that still cover substantially all the trade as required by Article XXIV of the GATT.
format Publications & Research :: Policy Research Working Paper
author Wagle, Swarnim
author_facet Wagle, Swarnim
author_sort Wagle, Swarnim
title Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?
title_short Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?
title_full Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?
title_fullStr Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?
title_full_unstemmed Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped?
title_sort coordinating tax reforms in the poorest countries : can lost tariffs be recouped?
publishDate 2012
url http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111216211610
http://hdl.handle.net/10986/3689
_version_ 1764387826581897216
spelling okr-10986-36892021-04-23T14:02:12Z Coordinating Tax Reforms in the Poorest Countries : Can Lost Tariffs be Recouped? Wagle, Swarnim ACCOUNTING ADMINISTRATION OF JUSTICE AGRICULTURE APPAREL APPLIED TARIFF AVERAGE TARIFF BOND BUDGET CONSTRAINT CAPACITY CONSTRAINTS CAPITAL GOODS CHECKS CLASSICAL ECONOMICS COLLECTED TARIFF COLLECTED TARIFFS CONSUMER GOODS CONSUMER PRICES CONSUMERS COST OF COLLECTION CUSTOMS CUSTOMS ADMINISTRATION CUSTOMS AUTHORITIES CUSTOMS UNIONS DEFAULT CASE DEMAND ELASTICITIES DEMAND ELASTICITY DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOMESTIC CONSUMPTION DOMESTIC INDUSTRIES DOMESTIC PRICE DOMESTIC PRODUCERS DOMESTIC PRODUCTION DOMESTIC SALES DOMESTIC TAX SYSTEM DOMESTIC TAXES ECONOMETRICS ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC THEORY ECONOMIC WELFARE ELASTICITY OF SUBSTITUTION ELIMINATION OF TARIFFS EQUIPMENT EXCHANGE RATES EXCISE DUTIES EXCISE TAXES EXPENDITURE EXPENDITURES EXPORT CLAUSE EXPORT PROMOTION EXPORT TAXES EXPORTER EXPORTERS EXPORTS EXTERNALITIES FINAL GOODS FISCAL DEFICIT FISCAL POLICY FOREIGN EXCHANGE FOREIGN PRODUCTS FOREIGN TRADE FREE TRADE FREE TRADE AGREEMENT FREE TRADE AREA FREE TRADE AREAS FREE TRADE ZONE GDP GDP PER CAPITA GENERAL AGREEMENT ON TARIFFS GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS GNP GOVERNMENT EXPENDITURES GOVERNMENT FINANCE GOVERNMENT REVENUE GOVERNMENT REVENUES GROSS DOMESTIC PRODUCT HIGH TARIFFS IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPORT DATA IMPORT DUTIES IMPORT DUTY IMPORT FIGURES IMPORT LICENSING IMPORT SUBSTITUTION IMPORT TARIFFS IMPORT VALUE IMPORTS INCOME LEVELS INCOME TAX INCOME TAXES INFLATION INSTITUTIONAL CAPACITY INSURANCE INTEREST BURDEN INTERMEDIATE GOODS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL ORGANIZATIONS INTERNATIONAL STANDARD INTERNATIONAL TRADE LDCS LEVEL OF PROTECTION LEVY LIBERALIZATION OF TRADE LOCAL MARKET LOSS OF REVENUE LOSS OF TARIFF REVENUE LOW TARIFFS MARGINAL REVENUE MARGINAL VALUE MONETARY FUND MOST FAVORED NATION MULTILATERAL REFORMS NATIONAL INCOME NATURAL RESOURCES OPEN ECONOMIES OPEN ECONOMY OPENNESS PER CAPITA INCOME PERSONAL INCOME POLICY RESPONSES POLITICAL ECONOMY PREFERENTIAL RATES PREFERENTIAL TARIFF PREFERENTIAL TARIFF RATE PRICE CHANGE PRICE CHANGES PRICE EFFECTS PRICE ELASTICITY PRICE OF IMPORTS PRODUCTION EFFICIENCY PRODUCTION FUNCTIONS PROTECTIONIST PROTECTIONIST BIAS PUBLIC FINANCE REGIONAL TRADE RETURNS TARIFF ELIMINATION TARIFF EXEMPTIONS TARIFF INCREASES TARIFF LEVELS TARIFF LINES TARIFF RATE TARIFF RATES TARIFF REDUCTION TARIFF REFORM TARIFF REVENUE TARIFF REVENUES TARIFF STRUCTURE TAX TAX COLLECTION TAX CREDIT TAX POLICY TAX RATES TAX REGIME TAX REVENUE TAX REVENUES TAX SYSTEM TAXATION TOTAL REVENUE TRADE ADJUSTMENT TRADE AGREEMENTS TRADE BLOCS TRADE DISTORTIONS TRADE LIBERALIZATION TRADE MORE TRADE NEGOTIATIONS TRADE POLICY TRADE POLICY REFORM TRADE POLICY REFORMS TRADE PRACTICES TRADE PROTECTION TRADE REFORM TRADE REFORMS TRADE TAX TRADE TAXES TRADE VALUE TRADING TRADING PARTNERS TRANSACTION TRANSITION COUNTRIES UTILITY FUNCTION VALUATION VALUE ADDED VALUE OF IMPORTS VALUE OF OUTPUT WEALTH WELFARE GAINS WITHHOLDING TAXES WORLD PRICE WORLD TRADE WORLD TRADE ORGANIZATION WTO ZERO TARIFF ZERO TARIFFS A revenue-neutral switch from trade taxes to domestic consumption taxes is fraught with implementation challenges in countries with a large informal sector. It is shown for a sample of low-income countries over 25 years that they have had a mixed record of offsetting reductions in trade tax revenue. The paper then analyzes the specific case of Nepal, using a unique data set compiled from unpublished customs records of imports, tariffs and all other taxes levied at the border. It estimates changes to revenue and domestic production associated with two sets of reforms: i) proportional tariff cuts coordinated with a strictly enforced value-added tax; and ii) proposed tariff cuts under a regional free trade agreement. It is shown that a revenue-neutral tax reform is conditional on the effectiveness with which domestic taxes are enforced. Furthermore, loss of revenue as a result of intra-regional free trade can be minimized through judicious use of Sensitive Lists that still cover substantially all the trade as required by Article XXIV of the GATT. 2012-03-19T18:06:53Z 2012-03-19T18:06:53Z 2011-12-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111216211610 http://hdl.handle.net/10986/3689 English Policy Research working paper ; no. WPS 5919 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region