Global Taxation of Agriculture and Forestry

Across the globe, the agricultural sector is often the target of special fiscal policies, including tax breaks and subisidies, to promote food security and rural economic stimulus and simplify administration. Increasingly, the sector is also subject to sector-specific taxes aimed at curbing environmental externalities. While there is a large literature on agricultural subsidies and tariff policy, there are few cross-country studies of domestic agricultural tax policies. To fill that gap, we built a detailed inventory of almost 950 tax policy measures specific to agriculture and forestry--both tax concessions and sectoral taxes--for 89 developed and developing countries. We use those data to estimate forgone revenue associated with agricultural income and general consumption tax expenditures and find that agricultural tax expenditures likely exceed agricultural subsidies. We also compare tariffs on food and agricultural inputs to those on other products. We find that while agricultural inputs are generally subject to below-average tariffs, foodstuffs are generally subject to above-average tariffs, such that agricultural tariff policy typically raises net revenue.