Effective Border Tax Adjustments for Export Promotion
In this paper, we address the administration issues associated with the most important border tax adjustments for export expansion. These relate to the refund of input tax credits under the VAT and the relief from customs duties on imported inputs used to produce exports. Such refunds in many developing countries are either not paid in a timely fashion or have been fraudulently overstated in the claims made by exporters. These become impediments that have frequently discouraged foreign investment, hindered export growth and bred corruption. This paper examines how some developing countries have successfully addressed these issues. It is found that some administrative innovations such as the requirement of a government bond or bank guarantees from those claiming input tax refunds can make the tax administration more effective under the VAT system. By the same token, a tax exemption or suspense system, not a system of duty drawbacks, should be the mechanism used to eliminate the import duties on inputs used to produce exports.
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- Glenn Jenkins, 2001. "Review of Value Added Taxation in TRNC," Development Discussion Papers 2002-06, JDI Executive Programs.
- Glenn P. Jenkins & Chun-Yan Kuo & Keh-Nan Sun, 2003. "Taxation and Economic Development in Taiwan," American Journal of Economics and Sociology, Wiley Blackwell, vol. 62(4), pages 734-735, October.
- Hector Cury & Glenn Jenkins & CHUN-YAN KUO, 2004. "Fiscal Adjustment for Sustainable Growth in the Dominican Republic," Development Discussion Papers 2004-01, JDI Executive Programs.
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