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Subnational Taxation in Large Emerging Countries: BRIC Plus One

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  • Richard M. Bird

    (University of Toronto)

Abstract

This paper reviews the evolution and current state of subnational taxation in five large emerging countries: Brazil, Russia, India, China, and Nigeria – BRIC plus one. As these case studies show, intergovernmental fiscal relations in any country are inevitably both path-dependent and context-sensitive. In India and Brazil, for example, subnational governments already have a significant degree of fiscal autonomy in terms of being able to set some key tax rates. In both countries, however, substantial attention still must be paid to improving the general consumption taxes that are the main source of regional government revenues as well as the property taxes on which local governments mainly depend. Although Nigeria, like India and Brazil, is a federation, its fiscal system depends so heavily on oil revenues that almost all political attention has been focused on securing a bigger share of these revenues. Both China and Russia have made a number of important changes in the direction of centralizing rather than decentralizing effective control over subnational taxes. In both countries the key issue is the extent to which fiscal decentralization is to be accompanied by any significant political decentralization. At the present time, in neither China nor Russia is it clear that the central authorities are willing to permit subnational governments much autonomy in this respect.

Suggested Citation

  • Richard M. Bird, 2012. "Subnational Taxation in Large Emerging Countries: BRIC Plus One," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1201, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper1201
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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1201.pdf
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    References listed on IDEAS

    as
    1. Roy Bahl & Eunice Heredia-Ortiz & Jorge Martinez-Vazquez & Mark Rider, 2005. "India: Fiscal Condition of the States, International Experience,and Options for Reform: Volume 2 (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper05142, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Áureo de Paula & Jose A. Scheinkman, 2010. "Value-Added Taxes, Chain Effects, and Informality," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 195-221, October.
    3. R. Kavita Rao, 2008. "Goods and Services Tax for India," Macroeconomics Working Papers 22976, East Asian Bureau of Economic Research.
    4. Roy Bahl & Eunice Heredia-Ortiz & Jorge Martinez-Vazquez & Mark Rider, 2005. "India: Fiscal Condition of the States, International Experience,and Options for Reform: Volume 1 (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper05141, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. repec:aer:wpaper:0a71164e1bcd is not listed on IDEAS
    6. Richard M Bird & Andrey V Tarasov, 2004. "Closing the Gap: Fiscal Imbalances and Intergovernmental Transfers in Developed Federations," Environment and Planning C, , vol. 22(1), pages 77-102, February.
    7. Richard M. Bird & Robert D. Ebel (ed.), 2007. "Fiscal Fragmentation in Decentralized Countries," Books, Edward Elgar Publishing, number 3864.
    8. Chun-Yan Kuo & Thomas Mcgirr & Satya Poddar, 1988. "Measuring the Non-Neutralities of Sales and Excise Taxes in Canada," Development Discussion Papers 1988-08, JDI Executive Programs.
    9. Jorge Martinez-Vasquez & Jameson Boex, 2001. "Russia's Transition to a New Federalism," World Bank Publications - Books, The World Bank Group, number 15248, December.
    10. World Bank, 2004. "India : Fiscal Decentralization to Rural Governments," World Bank Publications - Reports 14674, The World Bank Group.
    11. Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
    12. James Alm & Jameson Boex, 2002. "An Overview of Intergovernmental Fiscal Relations and Subnational Public Finance in Nigeria," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0201, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    13. Jorge Martinez-Vazquez & James Alm (ed.), 2003. "Public Finance in Developing and Transitional Countries," Books, Edward Elgar Publishing, number 2595.
    14. Jorge Martinez-Vazquez & Mark Rider & Sally Wallace, 2008. "Tax Reform in Russia," Books, Edward Elgar Publishing, number 2368.
    15. Afonso, José Roberto Rodrigues & Serra, José, 2007. "Fiscal federalism in Brazil: an overview," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    16. Richard M. Bird & François Vaillancourt, 2006. "Perspectives on Fiscal Federalism," World Bank Publications - Books, The World Bank Group, number 6953, December.
    17. Richard M. Bird & Enid Slack (ed.), 2004. "International Handbook of Land and Property Taxation," Books, Edward Elgar Publishing, number 3304.
    18. Richard Bird & Pierre Gendron, 1998. "Dual VATs and Cross-Border Trade: Two Problems, One Solution?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 429-442, July.
    19. Facchini, Giovanni & Testa, Cecilia, 2008. "Fiscal decentralization, regional inequality and bail-outs: Lessons from Brazil's debt crisis," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 333-344, May.
    20. Dillinger, William, 1991. "Urban property tax reform : guidelines and recommendations," Policy Research Working Paper Series 710, The World Bank.
    21. Migara O. De Silva & Galina Kurlyandskaya & Elena Andreeva & Natalia Golovanova, 2009. "Intergovernmental Reforms in the Russian Federation : One Step Forward, Two Steps Back?," World Bank Publications - Books, The World Bank Group, number 2668, December.
    22. Wallack,Jessica & Srinivasan,T. N. (ed.), 2006. "Federalism and Economic Reform," Cambridge Books, Cambridge University Press, number 9780521855808, November.
    23. Jorge Martinez-Vazquez, 2007. "Asymmetric Federalism in Russia: Cure or Poison?," Chapters, in: Richard M. Bird & Robert D. Ebel (ed.), Fiscal Fragmentation in Decentralized Countries, chapter 8, Edward Elgar Publishing.
    24. Hansjörg Blöchliger & David King, 2006. "Fiscal Autonomy of Sub-Central Governments," OECD Working Papers on Fiscal Federalism 2, OECD Publishing.
    25. Jonathan A. Rodden & Gunnar S. Eskeland (ed.), 2003. "Fiscal Decentralization and the Challenge of Hard Budget Constraints," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182297, December.
    26. Rao, R. Kavita, 2008. "Goods and services tax for India," Working Papers 08/57, National Institute of Public Finance and Policy.
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    Cited by:

    1. Ignacio Lozano & María Adelaida Martínez, 2013. "Enrollment and Quality Levels of Colombia's Public Basic Education: Has Fiscal Decentralization Improved Them?," Borradores de Economia 10387, Banco de la Republica.
    2. Ch, Rafael & Shapiro, Jacob & Steele, Abbey & Vargas, Juan F., 2018. "Endogenous Taxation in Ongoing Internal Conflict: The Case of Colombia," American Political Science Review, Cambridge University Press, vol. 112(4), pages 996-1015, November.
    3. Ekor, Maxwell & Adeniyi, Oluwatosin & Saka, Jimoh, 2015. "Trade Intensity Analysis of South Africa-BRIC Economic Relations," MPRA Paper 82632, University Library of Munich, Germany.
    4. Nataliia REKOVA & Iryna DOLOZINA & Vitalii NITSENKO & Yurii ZAITSEV & Victor ZAMLYNSKYI, 2018. "Budgetary Revenue Structure At Central Level Of Public Administration In The Federal Countries," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2018(30), pages 37-50, June.
    5. Pacewicz, Josh, 2020. "The politics of subnational taxation in comparative perspective," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 21(2), pages 26-35.
    6. Richard M. Bird, 2008. "Tax Assignment Revisited," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0805, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Anna P. Kireenko, 2023. "Empirical Studies of Taxation in BRICS Countries: Literature Review," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 9(3), pages 330-342.

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    More about this item

    Keywords

    state and local taxation; intergovernmental fiscal relations; Brazil; Russia; India; China; Nigeria;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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