IMF Working Papers

Rethinking Subnational Taxes: A New Look At Tax Assignment

By Richard Miller Bird

December 1, 1999

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Richard Miller Bird. Rethinking Subnational Taxes: A New Look At Tax Assignment, (USA: International Monetary Fund, 1999) accessed November 24, 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

The assignment of revenues in most developing and transitional countries to the central government has arguably facilitated irresponsible behavior by some subnational governments. One way to relieve this problem is to strengthen subnational tax regimes. The paper proposes two approaches to accomplish such strengthening in developing countries. The first—most applicable to large countries with important regional governments—is to establish subnational value-added taxes (VATs); the second is to replace the various unsatisfactory state and local taxes imposed on business by a low-rate value-added tax levied on the basis of income (production, origin) rather than consumption (destination).

Subject: Corporate income tax, Expenditure assignments, Fiscal policy, Revenue assignments, Subnational tax, Taxes, Value-added tax

Keywords: Africa, Beggar-my-neighbor tax competition, Central government, Corporate income tax, Destination state, Developing country, Expenditure assignments, Global, Government needs, Importing state, Local business taxes, Local government, Multitiered government, National government, Provincial sales tax, Regional governments, Revenue assignments, State ICMS, State VAT, Subnational tax, Subnational taxes, Tax administration, Tax assignment, Value-added tax, WP

Publication Details

  • Pages:

    54

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1999/165

  • Stock No:

    WPIEA1651999

  • ISBN:

    9781451858037

  • ISSN:

    1018-5941

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