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Fiscal Implications of Multilateral Tariff Cuts

  • Azim M. Sadikov
  • Hans P. Lankes
  • Dustin Smith
  • Katrin Elborgh-Woytek
  • Jean-Jacques Hallaert

The paper contributes to the discussion about the revenue implications of trade reform by assessing the approximate fiscal revenue impact of different liberalization formulae under consideration in multilateral trade negotiations for a group of low- and middle-income countries. The study applies a linear optimization framework to data for bound tariffs, applied tariffs, and imports at the HS-6 digit level for 58 developing countries, and simulates results for different sets of import demand elasticities and developing country "flexibilities." While only a small number of countries face a significant impact, results point toward the need for complementary fiscal measures in the countries most affected by revenue loss.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/203.

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Length: 36
Date of creation: 01 Sep 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/203
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  2. repec:rus:hseeco:123073 is not listed on IDEAS
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  12. Agbeyegbe, Terence D. & Stotsky, Janet & WoldeMariam, Asegedech, 2006. "Trade liberalization, exchange rate changes, and tax revenue in Sub-Saharan Africa," Journal of Asian Economics, Elsevier, vol. 17(2), pages 261-284, April.
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  16. repec:rus:hseeco:121595 is not listed on IDEAS
  17. Pritchett, Lant & Sethi, Geeta, 1993. "Tariff rates, tariff revenue, and tariff reform : some new facts," Policy Research Working Paper Series 1143, The World Bank.
  18. David Bevan, 1995. "Fiscal Implications of Trade Liberalization," IMF Working Papers 95/50, International Monetary Fund.
  19. Aled ab Iorwerth & John Whalley, 2002. "Efficiency considerations and the exemption of food from sales and value added taxes," Canadian Journal of Economics, Canadian Economics Association, vol. 35(1), pages 166-182, February.
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