Working Papers
January 1, 0001
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January 1, 0001
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1987
July 1, 1987
Fiscal Policy and Private Sector Saving Behavior: Tests of Ricardian Equivalence in Some Developing Economies
Description: Tax or debt financing of a given rate of government expenditures would, according to the now well-known Ricardian Equivalence proposition, have equivalent effects on aggregate demand. Among the reasons for a deviation from the equivalence is the possibility that the government and the private sector have different planning horizons. The paper finds no empirical support for differing planning horizons across sectors in a group of 16 developing economies and, therefore, provides empirical evidence for the equivalence hypothesis.
June 1, 1987
Tax Administration in Developing Countries: An Economic Perspective
Description: This paper examines the role of tax administration in developing countries from an economic perspective. The traditional separation of tax policy and tax administration in the literature is shown to break down in developing countries, where tax administrators decide in what manner complicated tax legislation should actually be applied. After surveying economic literature dealing with tax administration, the paper offers guidelines on how tax administrators can help implement more efficient and equitable tax systems.
March 1, 1987
The Mexican Value-Added Tax (VAT): Characteristics, Evolution, and Methodology for Calculating the Base
Description: The value-added tax (VAT) is often a major component of national fiscal structures. While its effects on allocative efficiency, inflation, income distribution, and tax administration have been addressed, little work, exists on the theoretical base of a VAT, given its structure. This is essential for knowing how much of the base is actually taxed. Using Mexican national accounts and input-output tables, this paper develops a methodology for calculating the theoretical base of the Mexican VAT for 1980 and 1983 (two years whose individual VAT structures were considerably different). The method is applicable to other VAT systems as well.
1986
December 1, 1986
Problems of Administering a Value-Added Tax in Developing Countries
Description: During the 1970s and 1980s, many developing countries enacted value-added taxes (VATs) as a part of their fiscal structures. The productivity of this source of revenue has depended in large part on the facility with which the tax can be administered. Single rate VATs have proved easier to administer than those with multiple rates. Exemptions and zero-rating tend to complicate administration. Because small taxpayers are so numerous in developing countries and administrative resources so limited, the treatment of small taxpayers has required special attention. The difficulty of taxing services has led most developing countries to omit all but a few services from the tax base. Administrative constraints are the main reason why the VAT that prevails in developing countries is usually very different from the broad-based and neutral tax discussed in public finance treatises.
September 1, 1986
Indirect Taxation in Developing Countries: A General Equilibrium Approach
Description: Indirect taxes are an important element in stabilization tax packages that aim at raising revenue in the short run. This paper evaluates, by using a general equilibrium model, alternative instruments of indirect taxation in middle-income developing countries. It uses data for Thailand as an illustration and examines the effects on revenue, efficiency, equity, and international competitiveness. The paper shows that the interaction between taxes and distortions caused by various policies can be important for revenue and efficiency. It also reveals significant backward shifting and a link between outward-looking supply-side tax policies and trade policies in industrial countries.