Tax Challenges Facing Developing Countries

Institute for International Business Working Paper No. 9

33 Pages Posted: 31 Mar 2008

See all articles by Richard M. Bird

Richard M. Bird

University of Toronto - Joseph L. Rotman School of Management; Georgia State University - Andrew Young School of Public Policy

Date Written: March 2008

Abstract

Most developing countries continue to face serious problems in developing adequate and responsive tax systems. This paper reviews the three principal ways in which developing countries may expand and improve their taxation systems - base-broadening, rate reduction, and administrative improvement - in the context of the political economy of tax reform. While each of these paths to reform is essential, in the end what 50 years of experience tells us is that improving the transparency and understanding with which fiscal issues are discussed by all relevant players, both within and outside government, is the really essential ingredient to developing viable and sustainable tax systems in developing countries. Such institution-building activities are not a boring bit of infrastructure to be brushed aside in order to get into the real business of making this or that substantive reform in tax policy or administration: they are the "real business" with which serious tax reformers in any country should be most concerned.

Keywords: taxation, developing countries, political economy, institutions

JEL Classification: O23, H20, D78

Suggested Citation

Bird, Richard Miller, Tax Challenges Facing Developing Countries (March 2008). Institute for International Business Working Paper No. 9, Available at SSRN: https://ssrn.com/abstract=1114084 or http://dx.doi.org/10.2139/ssrn.1114084

Richard Miller Bird (Contact Author)

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
905-274-8841 (Phone)

Georgia State University - Andrew Young School of Public Policy

International Studies Program
Atlanta, GA 30303-3083
United States

HOME PAGE: http://www.aysps.gsu.edu

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