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Building Tax Capacity in Developing Countries

Author

Listed:
  • Juan Carlos Benitez
  • Mario Mansour
  • Miguel Pecho
  • Charles Vellutini

Abstract

Tax capacity—the policy, institutional, and technical capabilities to collect tax revenue—is part of a deeper process of state building that is essential for achieving the sustainable development goals. This Staff Discussion Note shows that developing countries have made some progress in revenue mobilization during the past decades. However, much more is needed. We find that a staggering 9 percentage-point increase in the tax-to-GDP ratio is feasible through a combination of tax system reform and institutional capacity building. Achieving this calls for a holistic and institution-based approach that focuses on improving policy, administration and legal implementation of core taxes. The note offers practical lessons and guidance, based on IMF capacity building experience in this area.

Suggested Citation

  • Juan Carlos Benitez & Mario Mansour & Miguel Pecho & Charles Vellutini, 2023. "Building Tax Capacity in Developing Countries," IMF Staff Discussion Notes 2023/006, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2023/006
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=535449
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    Citations

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    Cited by:

    1. Terzic, Saudin, 2024. "Individual Tax Practitioners Attitudes: How to Increase Tax Capacity," MPRA Paper 122846, University Library of Munich, Germany.
    2. Saudin Terzic & Maja Ploco, 2024. "Individual Tax Practitioners Attitudes: How to Increase Tax Capacity," Research in Applied Economics, Macrothink Institute, vol. 16(2), pages 24-36, December.
    3. Armon Rezai & Franz Ruch & Rishabh Choudhary & John Nana Darko Francois, 2024. "Fiscal Policy’s Role in Economic Resilience to Climate Shocks," CESifo Working Paper Series 11517, CESifo.
    4. Rezai,Armon & Franz Ulrich Ruch & Rishabh Choudhary & John Nana Darko Francois, 2024. "Fiscal Policy’s Role in Economic Resilience to Climate Shocks," Policy Research Working Paper Series 10982, The World Bank.

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