IMF Working Papers

Effect of Corruption on Tax Revenues in the Middle East

By Patrick A. Imam, Davina F. Jacobs

November 1, 2007

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Patrick A. Imam, and Davina F. Jacobs Effect of Corruption on Tax Revenues in the Middle East, (USA: International Monetary Fund, 2007) accessed November 5, 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

This study estimates the impact of corruption on the revenue-generating capacity of different tax categories in the Middle East. We find that the low revenue collection as a share of GDP there compared to other middle-income regions is due in part to corruption, and certain taxes are more affected than others. Taxes that require frequent interaction between the tax authority and individuals, such as taxes on international trade, seem to be more affected by corruption than most other types of taxation. This suggests that if governments need to raise more tax revenues in a way that minimizes distortions and maximizes social welfare, they should implement reforms that either reduce corruption or raise revenues from tax categories that are less susceptible to corruption. Possible reforms of the revenue system and administration are examined.

Subject: Consumption taxes, Corruption, Income and capital gains taxes, Revenue administration, Tax administration core functions

Keywords: Country, Direct tax, Government, Tax, WP

Publication Details

  • Pages:

    34

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2007/270

  • Stock No:

    WPIEA2007270

  • ISBN:

    9781451868333

  • ISSN:

    1018-5941

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