Subnational Taxation in Developing Countries : A Review of the Literature
This paper reviews the literature on tax assignment in decentralized countries. Ideally, own-source revenues should be sufficient to enable at least the richest subnational governments to finance from their own resources all locally-provided servic...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| 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_20101019161844 http://hdl.handle.net/10986/3933 |
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okr-10986-3933 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ADDED TAX ADDED TAXES ALLOCATION OF RESOURCES BENEFICIARIES BETTERMENT CHARGES BORROWING BUDGET CONSTRAINT BUSINESS TAX BUSINESS TAXES CAPITAL FLOWS CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITALS CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL REVENUES CENTRAL TAXES CENTRAL TRANSFERS CENTRALIZING CITIES COASTAL PROVINCES COMPARATIVE ADVANTAGE COMPLIANCE COSTS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE INCOME TAX CORPORATE INCOME TAXES DEBT DECENTRALIZATION DEVELOPING COUNTRIES DIFFERENTIALS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ENVIRONMENTAL TAXES EQUALIZATION EXCISE TAXES EXPENDITURE EXPENDITURE ASSIGNMENT EXPENDITURE DECENTRALIZATION EXPENDITURE RESPONSIBILITIES EXPENDITURES EXPORTERS FEDERAL COUNTRIES FEDERAL COUNTRY FEDERAL TAX FEDERALISM FINANCES FINANCIAL CRISIS FISCAL AUTONOMY FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL FEDERALISM FISCAL INSTITUTIONS FISCAL REFORMS FISCAL RESPONSIBILITY FISCAL SUSTAINABILITY GOVERNORS IMMOVABLE PROPERTY INCOME TAXES INEFFICIENT TAX INFLATION INSTRUMENT INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL ARRANGEMENTS INTERGOVERNMENTAL FISCAL RELATIONS INTERGOVERNMENTAL FISCAL TRANSFERS INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INTERNATIONAL CAPITAL INVESTMENT DECISIONS LAND USE LEVEL OF GOVERNMENT LEVIES LEVY LICENSES LOAN LOCAL AUTONOMY LOCAL BUSINESS LOCAL CAPACITIES LOCAL CAPACITY LOCAL EXPENDITURES LOCAL FINANCE LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL PUBLIC SERVICES LOCAL REVENUE LOCAL SPENDING LOCAL TAXATION LOCAL TAXES MACROECONOMIC CONTROL MACROECONOMIC IMBALANCES MACROECONOMIC PROBLEMS MAYORS MONETARY FUND NATIONAL TAXES NEGATIVE EXTERNALITIES PAYROLL TAX PAYROLL TAXES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLICY ANALYSIS POLICY CHOICES POLICY OUTCOMES POLICY PROCESS POLITICAL ECONOMY POLITICAL POWER POLITICAL STABILITY PORTFOLIO PRIVATE SECTOR PROPERTY OWNERSHIP PROPERTY TAX PROPERTY TAXES PROVINCE PROVINCES PROVINCIAL GOVERNMENTS PROVINCIAL SALES PROVINCIAL SALES TAXES PROVINCIAL TAXES PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC REVENUES PUBLIC SECTOR PUBLIC SPENDING REAL PROPERTY REAL PROPERTY TAX REAL PROPERTY TAXES RESOURCE ALLOCATION RETURNS REVENUE ADEQUACY REVENUE ASSIGNMENT REVENUE ASSIGNMENTS REVENUE COLLECTIONS REVENUE MOBILIZATION REVENUE SHARING REVENUE SOURCES SALES TAX SALES TAXES SMALL TOWNS SOCIAL CAPITAL STREETS SUBNATIONAL SUBNATIONAL AUTHORITIES SUBNATIONAL EXPENDITURES SUBNATIONAL FINANCE SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENT EXPENDITURE SUBNATIONAL GOVERNMENT EXPENDITURES SUBNATIONAL GOVERNMENTS SUBNATIONAL UNITS TAX TAX ADMINISTRATION TAX ASSIGNMENT TAX AUTHORITY TAX AUTONOMY TAX BASE TAX BASES TAX BURDEN TAX COMPETITION TAX COMPLIANCE TAX DECENTRALIZATION TAX DIFFERENTIALS TAX EXPORTING TAX MEASURES TAX OFFICIALS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAX SHARING TAX SHARING ARRANGEMENTS TAX STRUCTURE TAX SYSTEM TAX TABLE TAXATION TAXES ON PROPERTY TAXPAYERS TRANSPARENCY USER CHARGES VALUATION |
| spellingShingle |
ACCOUNTING ADDED TAX ADDED TAXES ALLOCATION OF RESOURCES BENEFICIARIES BETTERMENT CHARGES BORROWING BUDGET CONSTRAINT BUSINESS TAX BUSINESS TAXES CAPITAL FLOWS CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITALS CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL REVENUES CENTRAL TAXES CENTRAL TRANSFERS CENTRALIZING CITIES COASTAL PROVINCES COMPARATIVE ADVANTAGE COMPLIANCE COSTS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE INCOME TAX CORPORATE INCOME TAXES DEBT DECENTRALIZATION DEVELOPING COUNTRIES DIFFERENTIALS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ENVIRONMENTAL TAXES EQUALIZATION EXCISE TAXES EXPENDITURE EXPENDITURE ASSIGNMENT EXPENDITURE DECENTRALIZATION EXPENDITURE RESPONSIBILITIES EXPENDITURES EXPORTERS FEDERAL COUNTRIES FEDERAL COUNTRY FEDERAL TAX FEDERALISM FINANCES FINANCIAL CRISIS FISCAL AUTONOMY FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL FEDERALISM FISCAL INSTITUTIONS FISCAL REFORMS FISCAL RESPONSIBILITY FISCAL SUSTAINABILITY GOVERNORS IMMOVABLE PROPERTY INCOME TAXES INEFFICIENT TAX INFLATION INSTRUMENT INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL ARRANGEMENTS INTERGOVERNMENTAL FISCAL RELATIONS INTERGOVERNMENTAL FISCAL TRANSFERS INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INTERNATIONAL CAPITAL INVESTMENT DECISIONS LAND USE LEVEL OF GOVERNMENT LEVIES LEVY LICENSES LOAN LOCAL AUTONOMY LOCAL BUSINESS LOCAL CAPACITIES LOCAL CAPACITY LOCAL EXPENDITURES LOCAL FINANCE LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL PUBLIC SERVICES LOCAL REVENUE LOCAL SPENDING LOCAL TAXATION LOCAL TAXES MACROECONOMIC CONTROL MACROECONOMIC IMBALANCES MACROECONOMIC PROBLEMS MAYORS MONETARY FUND NATIONAL TAXES NEGATIVE EXTERNALITIES PAYROLL TAX PAYROLL TAXES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLICY ANALYSIS POLICY CHOICES POLICY OUTCOMES POLICY PROCESS POLITICAL ECONOMY POLITICAL POWER POLITICAL STABILITY PORTFOLIO PRIVATE SECTOR PROPERTY OWNERSHIP PROPERTY TAX PROPERTY TAXES PROVINCE PROVINCES PROVINCIAL GOVERNMENTS PROVINCIAL SALES PROVINCIAL SALES TAXES PROVINCIAL TAXES PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC REVENUES PUBLIC SECTOR PUBLIC SPENDING REAL PROPERTY REAL PROPERTY TAX REAL PROPERTY TAXES RESOURCE ALLOCATION RETURNS REVENUE ADEQUACY REVENUE ASSIGNMENT REVENUE ASSIGNMENTS REVENUE COLLECTIONS REVENUE MOBILIZATION REVENUE SHARING REVENUE SOURCES SALES TAX SALES TAXES SMALL TOWNS SOCIAL CAPITAL STREETS SUBNATIONAL SUBNATIONAL AUTHORITIES SUBNATIONAL EXPENDITURES SUBNATIONAL FINANCE SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENT EXPENDITURE SUBNATIONAL GOVERNMENT EXPENDITURES SUBNATIONAL GOVERNMENTS SUBNATIONAL UNITS TAX TAX ADMINISTRATION TAX ASSIGNMENT TAX AUTHORITY TAX AUTONOMY TAX BASE TAX BASES TAX BURDEN TAX COMPETITION TAX COMPLIANCE TAX DECENTRALIZATION TAX DIFFERENTIALS TAX EXPORTING TAX MEASURES TAX OFFICIALS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAX SHARING TAX SHARING ARRANGEMENTS TAX STRUCTURE TAX SYSTEM TAX TABLE TAXATION TAXES ON PROPERTY TAXPAYERS TRANSPARENCY USER CHARGES VALUATION Bird, Richard M. Subnational Taxation in Developing Countries : A Review of the Literature |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5450 |
| description |
This paper reviews the literature on tax
assignment in decentralized countries. Ideally, own-source
revenues should be sufficient to enable at least the richest
subnational governments to finance from their own resources
all locally-provided services that primarily benefit local
residents. Subnational taxes should also not unduly distort
the allocation of resources. Most importantly, to the extent
possible subnational governments should be accountable at
the margin for financing the expenditures for which they are
responsible. Although reality in most countries inevitably
falls far short of these ideals, nonetheless there are
several taxes that subnational governments in developing
countries could use to help ensure that decentralization
yields more of the benefits it appears to promise in theory.
At the local level, such taxes include property taxes and,
especially for larger cities, perhaps also a limited and
well-designed local business tax. At the regional level, in
addition to taxes on vehicles, governments in some countries
may be able to utilize any or all of the following -- a
payroll tax; a simple surcharge on the central personal
income tax; and a sales tax, in some cases perhaps taking
the form of a well-designed regional value-added tax. The
"best" package for any particular country or
subnational government is likely to be not only
context-specific and path-dependent, but also highly
sensitive to the balance struck between different political
and economic factors and interests. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bird, Richard M. |
| author_facet |
Bird, Richard M. |
| author_sort |
Bird, Richard M. |
| title |
Subnational Taxation in Developing Countries : A Review of the Literature |
| title_short |
Subnational Taxation in Developing Countries : A Review of the Literature |
| title_full |
Subnational Taxation in Developing Countries : A Review of the Literature |
| title_fullStr |
Subnational Taxation in Developing Countries : A Review of the Literature |
| title_full_unstemmed |
Subnational Taxation in Developing Countries : A Review of the Literature |
| title_sort |
subnational taxation in developing countries : a review of the literature |
| 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_20101019161844 http://hdl.handle.net/10986/3933 |
| _version_ |
1764389088600784896 |
| spelling |
okr-10986-39332021-04-23T14:02:13Z Subnational Taxation in Developing Countries : A Review of the Literature Bird, Richard M. ACCOUNTING ADDED TAX ADDED TAXES ALLOCATION OF RESOURCES BENEFICIARIES BETTERMENT CHARGES BORROWING BUDGET CONSTRAINT BUSINESS TAX BUSINESS TAXES CAPITAL FLOWS CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITALS CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL REVENUES CENTRAL TAXES CENTRAL TRANSFERS CENTRALIZING CITIES COASTAL PROVINCES COMPARATIVE ADVANTAGE COMPLIANCE COSTS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE INCOME TAX CORPORATE INCOME TAXES DEBT DECENTRALIZATION DEVELOPING COUNTRIES DIFFERENTIALS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ENVIRONMENTAL TAXES EQUALIZATION EXCISE TAXES EXPENDITURE EXPENDITURE ASSIGNMENT EXPENDITURE DECENTRALIZATION EXPENDITURE RESPONSIBILITIES EXPENDITURES EXPORTERS FEDERAL COUNTRIES FEDERAL COUNTRY FEDERAL TAX FEDERALISM FINANCES FINANCIAL CRISIS FISCAL AUTONOMY FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL FEDERALISM FISCAL INSTITUTIONS FISCAL REFORMS FISCAL RESPONSIBILITY FISCAL SUSTAINABILITY GOVERNORS IMMOVABLE PROPERTY INCOME TAXES INEFFICIENT TAX INFLATION INSTRUMENT INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL ARRANGEMENTS INTERGOVERNMENTAL FISCAL RELATIONS INTERGOVERNMENTAL FISCAL TRANSFERS INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INTERNATIONAL CAPITAL INVESTMENT DECISIONS LAND USE LEVEL OF GOVERNMENT LEVIES LEVY LICENSES LOAN LOCAL AUTONOMY LOCAL BUSINESS LOCAL CAPACITIES LOCAL CAPACITY LOCAL EXPENDITURES LOCAL FINANCE LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL PUBLIC SERVICES LOCAL REVENUE LOCAL SPENDING LOCAL TAXATION LOCAL TAXES MACROECONOMIC CONTROL MACROECONOMIC IMBALANCES MACROECONOMIC PROBLEMS MAYORS MONETARY FUND NATIONAL TAXES NEGATIVE EXTERNALITIES PAYROLL TAX PAYROLL TAXES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLICY ANALYSIS POLICY CHOICES POLICY OUTCOMES POLICY PROCESS POLITICAL ECONOMY POLITICAL POWER POLITICAL STABILITY PORTFOLIO PRIVATE SECTOR PROPERTY OWNERSHIP PROPERTY TAX PROPERTY TAXES PROVINCE PROVINCES PROVINCIAL GOVERNMENTS PROVINCIAL SALES PROVINCIAL SALES TAXES PROVINCIAL TAXES PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC REVENUES PUBLIC SECTOR PUBLIC SPENDING REAL PROPERTY REAL PROPERTY TAX REAL PROPERTY TAXES RESOURCE ALLOCATION RETURNS REVENUE ADEQUACY REVENUE ASSIGNMENT REVENUE ASSIGNMENTS REVENUE COLLECTIONS REVENUE MOBILIZATION REVENUE SHARING REVENUE SOURCES SALES TAX SALES TAXES SMALL TOWNS SOCIAL CAPITAL STREETS SUBNATIONAL SUBNATIONAL AUTHORITIES SUBNATIONAL EXPENDITURES SUBNATIONAL FINANCE SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENT EXPENDITURE SUBNATIONAL GOVERNMENT EXPENDITURES SUBNATIONAL GOVERNMENTS SUBNATIONAL UNITS TAX TAX ADMINISTRATION TAX ASSIGNMENT TAX AUTHORITY TAX AUTONOMY TAX BASE TAX BASES TAX BURDEN TAX COMPETITION TAX COMPLIANCE TAX DECENTRALIZATION TAX DIFFERENTIALS TAX EXPORTING TAX MEASURES TAX OFFICIALS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAX SHARING TAX SHARING ARRANGEMENTS TAX STRUCTURE TAX SYSTEM TAX TABLE TAXATION TAXES ON PROPERTY TAXPAYERS TRANSPARENCY USER CHARGES VALUATION This paper reviews the literature on tax assignment in decentralized countries. Ideally, own-source revenues should be sufficient to enable at least the richest subnational governments to finance from their own resources all locally-provided services that primarily benefit local residents. Subnational taxes should also not unduly distort the allocation of resources. Most importantly, to the extent possible subnational governments should be accountable at the margin for financing the expenditures for which they are responsible. Although reality in most countries inevitably falls far short of these ideals, nonetheless there are several taxes that subnational governments in developing countries could use to help ensure that decentralization yields more of the benefits it appears to promise in theory. At the local level, such taxes include property taxes and, especially for larger cities, perhaps also a limited and well-designed local business tax. At the regional level, in addition to taxes on vehicles, governments in some countries may be able to utilize any or all of the following -- a payroll tax; a simple surcharge on the central personal income tax; and a sales tax, in some cases perhaps taking the form of a well-designed regional value-added tax. The "best" package for any particular country or subnational government is likely to be not only context-specific and path-dependent, but also highly sensitive to the balance struck between different political and economic factors and interests. 2012-03-19T18:42:25Z 2012-03-19T18:42:25Z 2010-10-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101019161844 http://hdl.handle.net/10986/3933 English Policy Research working paper ; no. WPS 5450 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 |