Reforming Tax Systems: Experience of the Baltics, Russia, and Other Countries of the Former Soviet Union

September 1, 2003

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Vahram Stepanyan. Reforming Tax Systems: Experience of the Baltics, Russia, and Other Countries of the Former Soviet Union, (USA: International Monetary Fund, 2003) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Starting in the early 1990s, the Baltics, Russia, and other (BRO) countries of the former Soviet Union initiated tax reforms that varied widely at the later stages. Recently, some of the BRO countries, basing decisions on the proposition that lowering of the top marginal income tax rate would significantly benefit economic development and increase tax compliance, have initiated a new stage of tax reforms. This paper reviews country experiences and suggests that (i) overall, there seems to be little evidence of a substantial improvement in income tax revenues resulting simply from a reduction in the top marginal tax rates, and (ii) in the BRO countries, the elasticity of the behavior of economic agents, in terms of labor supply, saving, and investment, with respect to income tax rates is not large, and a reduction of the existing income tax rates is unlikely to lead to a notable expansion of economic activity.

Subject: Income and capital gains taxes, Income tax systems, Personal income tax, Revenue administration, Tax administration core functions, Taxes

Keywords: Baltics, BRO countries tax policy reform, BRO country, Country, Income and capital gains taxes, Income tax systems, Personal income tax, Rate, Reform, Reform effort, Reform experience, Reform implementation, Reform initiative, Tax administration capacity, Tax administration core functions, Tax policy, Tax reform experience in BRO country, Tax reform initiative, Tax reform objective, Tax reforms, Tax system, Transition country, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/173
Stock No:

WPIEA1732003
ISBN:

9781451858655
ISSN:

1018-5941

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