Tariff rates, tariff revenue, and tariff reform : some new facts
The ad valorem tariff rateson specific products and the ratio of tariff revenue to import value, the collected rate, are only tenuously related, contend the authors. Using tariff and revenue data (at the tariff code line level of detail) for three developing countries, the authors compare the statutory ad valorem tariff rates (official rates) with the ratio of tariff revenues to import values (collected rates). They document four facts: (1) the collected rate for any given item of the tariff code has almost no relationship to the official rate for that item; (2) the variation of collected rates around the official rate increases as the level of the official rate increases; (3) the collected rates increase much less, on average, than one-for-one with the official rates; and (4) above a certain level, collected rates do not increase at all despite increases in official rates. Collection rates appear to level off at roughly 50 percent. (In Kenya, collected rates are lower for high-tariff than for moderate-tariff items. Assigning lower rates for the high-tariff items would actually increase revenue on those items.) The implications of these findings are twofold for calculating general revenue. The rates are not the critical determinant of revenues. The revenue implications of large rate changes can be offset by modest changes in the system of exemptions, for example. The benefit of eliminating exemptions is primarily transparency. The costs of programs that provide import exemptions for, say, regional promotion, are often hidden in customs statistics. Secondly, if pressures that cause collected rates not to increase one-for-one with tariff rates will continue to be present in any tariff regime, then these must be factored into tariff reform design.
|Date of creation:||31 May 1993|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Julio Nogues & Sunil Gulati, 1994. "Economic Policies and Performance Under Alternative Trade Regimes: Latin America During the 1980s," The World Economy, Wiley Blackwell, vol. 17(4), pages 467-496, 07.
- Mitra, Pradeep, 1992. "The Coordinated Reform of Tariffs and Indirect Taxes," World Bank Research Observer, World Bank Group, vol. 7(2), pages 195-218, July.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1143. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.