Public Disclosure Authorized

Policy,Planning,and Rearch

WORKING

PAPiRS

WorldDevelopment Repo

l

Officeof the VicePresident The WorldBank August1989

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

WPS 43

BackgroundPaperfor the 1988Wordd DevelopmentRepon

TaxAdministration in DevelopingCountries Strategiesand Toolsof Implementation Tax AdministrationDivision IMF Fiscal Affairs Department Developing nations should adopt less sophisticated taxes (such as taxes on goods and services) to broaden the tax base, and use more efficient administrative technique (such as withholdings and computerization). At present, potential tax bases are often not exploited because the application of existing law (particularly for income taxes) is not possible.

The Policy, Planning, and Research Complex distributes PPR Working Papers to dissaninate the findings of wockin progress and to enooungc the exchangeof ideas anmmgBank staff and all others interested in development issus. These papers carry the names of the authors,reflecaonly their views, and should be used and cited accordingly. The findings. interpretations, and conclusions are the authors' own. They should not be attributedto the World Bank, its Board of Directors,its management, or any of its manber counries.

PokyUPnnlng,and Re3uch

World DevelopmwntReport

In many devnloping nations, tax administrators often make their own policy because they are unable to enforce the laws.

criminates against the most accessible target: the modem sector of the economy, which is crucial to growth and development.

Administrators face major problems: A large portion of the economy is at a subsistence level and does not keep records. Where records are kept, accounting is not reliable. Axpayer cooperation is also low for a variety of reasons: shortage of trained officials, a tradition of corruption, and because taxes are not often seen to produce better govemment services.

Governments should shift away from trade taxes to consumption taxes, such as sales tax, particularly of the valuc added variety. They should also move toward more broadly based income taxes (including interest and dividends - not just wages), with realistic rates. Assessment based on "presumptive" rather than actual calculation methods can also help extend the tax base to the self-employed, to subsistence farners, to traders, and to smaller firms.

These problems induce governments to rely heavily on trade taxes. But this is costly. Export taxes tie revenue to unpredictable export commodity prices which aggravates fiscal stabilization problems. Import duties lead to excessive protection of inefficient domestic industry. Acministrative problems also lead to the selecdve collection of income tax. This dis-

The single most effective way to improve tax administration is to use a system of income withholdings (for aUcomponents of income). Another important tool is computerization. This can simplify withholding and collection by giving each taxpayer a number in a master file. Computers also facilitate information gathering, cross checking. and audits.

This is a background paper for the 1988 World Development Repor. Copies are available free from the World Bank, 1818 H Street NW, Washington DC 20433. Please contact the World Development Report office, room S13-060, extension 31393 (38 pages).

The PPR Working Paper Series disseminates the findings of work under way in the Bank'. Policy, Planning, and Research Complex. An objective of the series is to get these findings out quickly, even if presentations are less than fully polished. The ftndings, interpretations, and conclusions in these papers do not necessarily represent official policy of the Bank. Produced at the PPR Dissemination Center

INTERNATIONALMONETARY FUND ?iscal Affairs Department Tax Administrationin DevelopingCountries: Strategiesand Tools of Implementation Preparedby Tax AdministrationDivision June 30, 1988

I. Introduction Discussionof tax administrationin developingcountries should begin with one central idea--theinseparabilityof tax administration and tax policy. In industrialcountriestax administrationis concerned with assessment,collectionand enforcementof legislationthat forms the content of tax policy. In these countriestax administrationby and large 'carriesout the orders' of tax policy,and tax administrators need only be conceraedwith how well existinglegislationis being implemented. In developingcountrieswe find a completelydifferent story, although we must bear in mind that developingcountries themselvesrun the gamut from sophisticatedto rudimentarytax administrations. In the typical low income LDC the income tax and other legislationof a typical developingcountry may be quite similar

to Europeanor North American models, but the administrativeapparatus to implementthe complicatedlegislationis lacking. Faced with this task, tax administratorsin developingcouatr! a generally adopt simpleandselectivemethods :o raise revenue. The "effective"tax system then bears little resemblanceto the system embodied in the legislation. In more advanced developingcountries the gai between the legislativeand real systems becomes much narrower; in East Asia, Chile, Uruguay,Kenya, and Senegal tax administratorsmore nearly resemble their counterpartsin industrialcountries. Despite these exceptions, in the bulk of developingcountriesit Is still true that tax adainistrators

paid themselvesmaking tax policy as they decide how to

interpretover-complicatedlegislation. Given this fact, Gar paper goes beyond the traditionalconfinesof tax administrationand asks first how tax administrationhas shaped tax structurein developingcountries,and what have been the consequencesof its predominantrole. The second part of the paper deals with questionsmore traditionallyassociated with tax administration. In that part we ask what are the special problemsof tax administrationin the LDC environment,and what tools can be used to overcome them.

-3-

II. The Problem: AdministrativeConstraintsLead to Faulty Tax Structure A number of writers have explored the connectionbetween tax administrationand tax structure--bytax structurewe mean the set of taxes making up total tax revenue. In stmmary,they argue that low and middle income countriesare constrainedin their choice of taxes by the difficultiesof administrazion. In particular,developingcoun

are

forced to rely on foreigntrade and excise taxes because these 'tar handles"offer a base on which taxes can easily be collected. The Insight that administrativeconstraintsin part determinethe tax structureof developingcountriesappears accurate, if we examine the actual tax structureof developingcountriesamong themselvesand in contrast to industrialcountries. For developingcountriesa detailed examinationof tax structurehas been undertakenby Tanzi, using a pool of 82 countriesdivided by strata of per capita income.1/ For these countries,import duties--basedon a very convenienttax handle--account for 32 percent of total tax revenue. The personalincome tax--a much more difficult tax to collect--accountsfor only 9 percentof tax revenue. In contrast, for the most wealthy developingcountries the share of import duties drops to only 18 percent of tax revenue.

1/ See Tanzi, Vito, "QuantitativeCharacteristicsof the Tax Systms of DevelopingCountries,"in Modern Tax Theory for DevelopingCountries, edited by D. Newbery and N. Stein (Oxford,Oxford UniversityPress, 1987).

-4-

For the same group of higher income countries the share of the personal income tax rises to 13 percent, indicatinga greater use of this tax. When developingcountriesas a whole are difficult-to-collect comparedwith industrialcountries,the importanceof adtlanistrative constraintsin determiningthe tax structure Is again demonstrated. For the average developingcountry foreign trade taxes are the leading tax sources,representingat least one-third of total tax revenue,while the yield of foreigntrade taxes in industrializedcountries is virtually

negligible.

Why should developingcountriesbe concerned that their tax structureshave been shaped by administrativeconstraintsrather than taxes is costly economicprinciples?1/ Relianceon easy to administer for developingcountries for several reasons. From a stabilization point of view, a tax system should be composed of one or at most several predominant

taxes

with a rate

schedule

that

can be adjusted

quickly

and

with a high degree of certainty to alter the amount of purchasingpower available to the private sector. From an efficiencypoint of view, a good tax system is one that leads to the least distortionof relative prices, both the prices facing the consumerand those facing the producer. In some developingcountriesmany different import and excise tax rates on narrow bases are comb'ned with a variety of exemptionsto produce almost random effects on consumerchoice and producer incentives; in a number of others, especiallythe East Asian group, more

"Tax Administration Charles, 1/ See Mansfield, DMF Staff an Economic Perspective,' Countries:

in Developing Papers, March 1987.

-5-

rationaltariff systems have been implemented. For the former group heavy relianceon foreign trade taxes can be singled out as the most undesirableaspect of developingcountry tax systems from the point of view of both stabilizationand resourceallocation. From a stabilizatiot.

point

of view foreign

trade

taxes

tend to tie

government

revenue

to unpredictablefluctuationsof export commodity prices and so aggravate fiscal stabilizationproblems. A vicious circle can also begin if a reductionin import duties imposed for demand managementpurposes leads to a fall In import duties, thereby enlarging the fiscal deficit. From a resourceallocation (efficiency)point of view, trade taxes have no place in a 'firat-best'tax structure. The discriminatory nature of trade taxes ensures that their use imposes both a production distortioncost and a consumptiondistortioncost. Import duties, often relied upon for revenue, may lead to excessiveeffective p.otectionand encourageinefficientdomestic industry. Equity goals are also heavily compromisedby the tax structure of developingcountries. To an outsider this tax structuremay appear to be highly progressivebecause the rate structureof the personalincome tax is often highly progressive. On closer examination,however, the vertical equity of the system is compromisedby the fact that the personalincome tax collects a relatively smallshare of total revenue and applies mainly to wage earners,whose incomes may be lower than the self-employed.

Thus an

apparentverticalequity in rate structureof personal income tax and

-6-

import duties Is negated by a combinationof selectiveadministration and legal exemptions.

With regard to

,

zontal

equity--the principle

that those with equal incomes pay equal .axes--thetax structureof the typical developingcountry Is perhaps more clearly inadequate. On a broader basis one can say that selectiveadministrationof the statutory tax system discriminatesagainst the modern sector of the economy. The modern sector tends to fall into the income tax net because it keeps better accounts, is more centralized,and thus more revenue productive from the point of view of the tax collector. Althougha heavier burden of taxationon the modern sector may be appealing on equity grounds, one should bear In mind that the present tax syste tends to iopede the growth of the dynamic sector growth.

that

may be the key to more rapid

long-term

-7-

III. Obstacles to Effective Tax Administration Giv-n the fact that tax a ructu-e is flawed in developLngcountries we may ask what tax administratorscan do about it. One should recognize at the outset that tax administrationis 'endogenous"to LDC economies. One cannot change tax administrationin the same manner that one can change the exchange rate--taxadministrationreflectsbasic social and economicconditionssuch as literacy,income distributionand attitudes toward governmentauthority,and thereforecannot be changed overnight. To make this point, one might ask what would be the necessary conditionsto provJde a setting for effectlve tax administration. One tax authorityhas listed tVe requirementsfor implementationof the personal income tax as follows,and the list could apply to the implementationof any modern, sophisticatedtax: 1/ a.

The existenceof a predominantlymoney economy;

b.

A high standardof literacy;

c.

Prevalenceof honest and reliableaccounting;

d.

A large degree of voluntary complianceon the

part of taxpayers; e.

A politicalsystem not dominated by wealthy groups

acting arbitrarilyin their own self-interest.

1/ See Goode, Richard,GovernmentFinance In DevelopingCountrles, the Brookings Institution,Washington,D.C., 1984.

-8-

Developingcountriec requlrements. A large po: small traders)is either a s accessiblerecords. Although

e degree or another lack the above the economy (e.g., agricultureand nce (barter)economy or does not keep ' s not a necessarycondition for

taxation, the lack of a literate populat_-.

reduces the options for

policy-makers. For example, simple poll or excise taxes may have to be employed insteadof income taxes. Lack of reliableaccounting also constrains the type of taxes that can be effectivelyemployed. The personaland company income tax depend on good accounting. Lack of voluntarycomplianceby taxpayers undercutseffectiveadministrationof almost every tax and, as noted above, forces the aduinistrationto rely on easily collected taxes. The general requirementsfor effective administrationcan be specified in more detail as follows:

1.

Taxpayerattitudes l/ Modern taxationdepends heavily on voluntary cooperationby tax-

payers. Self-assessedincome taxes are a case in point, but not the only one. a spirit

Governments of taxpayer

in LDCs meet with special problems in fostering

cooperation,

inasmuch as taxes

are not generally

linked to a rising level of governmentservices. Taxpayer education should include informationfor the taxpayeron his obligationsunder the

1/ Sections 1-4 rely heavily on Muten, Leif, 'LeadingIssues of Tax Policy in DevelopingCountries: the AdministrativeProblems,"in the PoliticalEconomy of Taxation, edited by Peacock and Forte, (Oxford, 1981).

- 9 -

tax law. Behind education,however,must lie the threat of sanctionsif taxes are not paid. In most LDC's sanctions on negligentor fraudulent taxpayersare not effectivelyapplied. A taxpayerwill be more receptive to informationon his obligations if, in his efforts to comply, he receivesa reasonabledegree of service from the re->nue administration. Poorly drafted tax forms, long waiting lines and eren charges for acquiring tax forms, bureaucratichassle in processingthe Lases, rudeness from officials,cumbersomeLppeals procedures,and the like, can repel even the most loyal taxpayer. Tax authoritiesinform taxpayersby deeds as well as words. A taxpayerwill care little about even the most invitingcall for voluntary cooperationIf he finds the authorltiesreluctant to respect his rights. Also, while it is easy to understandwhy precariousgovernment financesand understaffedtax offices make for slow refunds,delays in refunds foster reluctanttaxpayers. If refunds are slow or inefficientlyadministered,great caution should be exercised in adopting tax schemes that include refunds,such as investmentgrants, employment subsidies,rebates of VAT on inputs to export industries,and year-end PAYE adjustments. The malfunctioningof such rules not only makes them ineffectivebut may well lead to a lower l-vel of taxpayercompliance than would prevail without them. Similarly counterproductive are excessive tax rates never applied in practice. It can be argued that announcingsuch rates in the statute should satisfy claims for redistributionraised among those in lower

-

10

-

incomebrackets. However,those who ask for redistributionare often unaware of the high rates, whereas those affected may be all too aware of the inefficientusc ade of them. Taxpayers faced with excessive rates may feel forced to evade or avoid the tax. The educationalvalue of realism in tax law can be considerable. Informationprovidedby press, radio, and television,has to be intelligibleto taxpayers. Whatever the form of that language, the informationto the taxpayerswill normallyhave to be given In a simpler form. Conceivably,the administration'sefforts in educating taxpayers should

bring

tion.

Statutory

he cannot

sous

feedback

In the form of more realistic tax legisla-

provisions

understand,

Imposing

or giving

obllgations

him rights

that

on the taxpayer he cannot

that

effectively

use, are of little value and should be remodeledinto rules adapted to social realities.

2.

Staff resources So far we have discussedobstacles to better administrationIn

terms of taxpayer compliance. The other side of the coin Is the ability of the administrationitself to apply tax laws. In this respect tax admlnistrationresources vary widely, from a very low level in the poorest developingcountries to much more sophisticatedstaffs in higher lncome developingcountries. One basic problem is the shortageof trained officials, particularlythose able to handle such tasks as auditing

company and personal

accounts

or designing

and operating

-

11

-

computerapplicationsfor tax administration. Another Is the lack of data that wou.d enable administratorsto Identifyassessmentand collectionproblemsmore easily.

3.

Legal problemsof tax administration The draftingof tax laws in LDCs sometimesmeets with a peculiar

problem;namely, the lack of harmony that oftea exists betweenthe actual performancestandards of the tax administrationon the one hand, and the standardsrequiredby the judiciaryon the other. The tax law may be sketchy, the tax administrationweak, and the practicaldifficultiesin Imposingthe tax law on an uncooperative public overwhelming. If in these circumstancesthe courts apply unrealisticallyhigh stendards,there is a real risk that their activity will be seen as intolerablesabotage. Just to take one example as illustration: where spellinghabits or transcriptionsof names are arbitrary,a court throwingout an assessmen;on the ground that the taxpayer'sname is being misspelledmay open the door for easy evasion. Here, there is often a need for the courts to modify their standardsto a realistic level. If they do not, their power to deal with tax appeals may te taken away from them, and the rule of law will registera more serious violation than that which might have obtained had standardsbeen adjusted. Another situationmight be one in which judicialreview of tax cases is not provided for under the law, or if provided for is nevertheless not effectivelyavailable. The latter may be the case, for

-

12

-

instance,when court backlogs exist. Without legal appeal, one might expect taxpayersto be in an unfavorablepositionvis-a-vis the authorities. In actual fact, however, the tax authoritymight hesitate to apply what it conceives to be an extreme interpretationof the law, lf there is no effective legal appeal. In such situationsthere will also be a tendencyto make a deal with the taxpayerto avoid the embarrassmentof an appeals procedure that gets nowhere. Thus, introducingan effective appeals proceduremight not only serve the rights of taxpayers;it might reduce the timidityof the tax authority as well.

4.

Corruption In too many countries the main problemis less the shortcouingsof

the statute than the means taxpayers find to evade it. Probablyno tax system is totally free from corrupt practices. It is only fair to say, however, that conditionsin many developingcountries tend to make such practices-ore prevalent. Corrupt practicescan be seen as leakages, or inefficienciesin the tax systems. In this light, there are obviously great differencesbetween small sums paid to speed up a procedure or to keep goodwill,and substantialamounts extorted from taxpayersor offered by them in lieu of the tax they are liable to pay. What can be done to counteractcorruption? Nobody has come up with a panacea. Anti-corruptiontask forces often only skin the surface.

- 13 -

Experimentsaimed at establishinga new spirit In the tax administration by substantialsalary increaseshave not been uniformlysuccessful. A more subtle anti-corruptioneffect may be achievedby improved staff training. The objectiveis the same as that of higher salaries; namely, to establish a better esprit de corps, thus reducing the inclinationof officials to resort to bargaining for their own profit. Tax legislationcan be revised so as to reduce as much as possible the number of discretionarymeasures, since these particularlylend themselvesto corrupt practices. Applyingautomatic rules, rather than leaving room for estimates by tax officials,may render the system less flexibleand to an extent less fair than It would ideally be. However, automaticor standard estimatesmay well be preferable to discretionary measures which can lend themselvesto bargainingbetween tax officials and taxpayers.

14 -

-

IV.

1.

Some Solutionsto Tax AdministrationProblems in LDC's

Withholding Despite

problems

the

mentioned

formidable

problems

of tax environment

above,

administrators

in developing

and the specific countries

do have

weapons at their disposal,some of them enhanced by modern technology. Probably the single most effectivemethod of tax collectionIn industrial

that

as vell

as developing countries is withholding, I.e., the idea

tax Is withheld and turned over to the Governmaetbefore it reaches

the hands of the taxpayer. Withholding is most commonlyapplied to wage income, but it is also applied in some countries,such as Argentina,Senegal and Taiwan, to Interestand dividends. An effectivewithholdingscheme, however, requiresa relativelysmall number of easily identifiablepayers ofincome. Withholdingmay thus be applied to wages, dividendsand interest,but it in difficultto apply to rental income, income of professionals there

and income from small

are as many payers Three

systems

is not intended

businesses.

as receivers

of withholding

to withhold

In these

latter

cases

of such income.

may be distinguished. The U.S. system

the precise

amount of income tax liability

due, although some effort is being made in that

direction

following

the

-

15-

Tax Reform Act of 1986. Withholding tables are originallybased on a flat rate of tax and basic personal exemptionsand allowances. A few days after each pay period the employerpays to the governmentthe amount withheld. At the end of the year, the employerSives the employee a statementof the total amount of wages or salary earned during the jear and the amount of tax withheld. The employeeis required to file a tax return, which indicateswhether the amount withheld is more, less, or equal to the amount actually du-. In most cases, tax is over-withheldand a refund is made after the return Is filed. In contrast to the U.S. systa of returns filed by the indivldual,the U.K. system places the burden of payment on the employer. The U.K. system is intendedto withhold the exact amount of tax liability in most cases. Each employee is requiredto file informationabout his dependents,anticipateddeductionsand other income with the tax administrationat the beginning of the year. The administrationassigns him a code number which is used by his employer to determine for each pay period the proper amount of tax to be withheld, taking into account accumulatedpayments already made during the year. However,delays in adjudicatingthe employee statementsoften cause inaccuratewithholdlig. A third type of withholdingis that employedby some LDCs, e.g., Chile and Indonesia,in which the amount withheldis simply declared to be final. This method sacrificesequity goals, but works well when most income is in the form of wages.

-

lb -

The ideal system is one which vwthholls an amount precisely equal to the taxpayer'sultimatetax liabilitly. The tax authority would then be spared the cost of processingfinal returns. Under such a system, the cost of collectingsmall

amounts from many taxpayers,the necessity

for refunds,and the losses from uncollectibleaccounts would be elisinated. Also, the taxpayerwould hive the convenienceof not filing a final tax return. But such a 'fine tuning' for all taxpayers can be achieved only by provisionswhich are difficult to administer,and may place a considerableburden of complianceon employers. On the other hand, a withholdingsystem with a flat rate is such easier to apply.

The systemmya functionsatisfactorily if most wage earnershave a steadyincomewhichIs not abovethe lowestbracketto which the standard rate is applied.

2.

Emphasison indirecttaxes Many developingcountrieshave realized that direct taxes--

especiallythe personalincome tax--arerelativelydifficultand expensive to administer. Rather than attempt to enforce a global income tax, for example,developingcountrieshave turned to taxes based on sales.

Of thesetaxesthe value-added tax is consideredeconomically desirable becauseit can be broad-basad and neutralwithrespectto the allocation of resources. The standardconsumptiontype VAT has the further advan-

tage that it taxesconsumption ratherthansavings. The VAT uses the

- 17 -

principleof withholding,and in fact has been characterizedas a 'form of withholding"intended to implementa retail (or other) sales tax more efficiently. Under the commonlyused invoice system of administering the value-addedtax, a taxpayerat any stage in the productionprocess credits his tax paid on the prior stage against his own collectionsof VAT. The differencei. paid to Government. In theory each taxpayer should have i strong interest in proving that VAT has been paid at the prior stage--hencethe self-checkingnature of the tax. Although economistshave been intriguedwith this self-checkingmechanism,the tax in practice the retail

is far

stage

from self-enforcing;

evasion

the tax Is not self-checking.

have a coson interestIn avoiding

occurs

because

In addition,

the tax altogether,

at

taxpayers

and legal

exemptionsopen up channelsof evasion. Row can a VAT be administeredsuccessfullyin developing countries?

1/

administration implementation. is highly

An important is

to structure

requirement

successful

VAT

the tax to minimizeproblemsof

From the administrative

desirable;

for

if necessary,

point

of view a single rate

the VAT can be supplemented

with

selectiveconsumptiontaxes to reduce regressivity. Despite Initial skepticismabout high VAT rates, experience(e.g., in Brazil and Chile) has shown that rates in the neighborhoodof 18 to 20 percent can be enforced. ExemptionscomplicateVAT administrationbecause the distinctionbetween what is exempt and what is taxed is often tenuous or

1/ See Casanegra de Jantscher,Milka, 'Problemsof Administeringa Value-AddedTax In DevelopingCountries," International Monetary Fund, VP/86/15.

-

18 -

arbitrary. Nevertheless,distributionalobjectiveshave led many countriesto exempt basic and nonbasic commodities. Zero-rating, a more complex form of exemption that requires the grantingof refunds and thereforeburdens the administration,has wisely been limited to exports by most countries. The need to provide special treatmentfor small businessunder VAT is much more pressingIn developingthan in Industrialcountries. Various methods for dealing with small taxpayers are in use, but ali methods present technicaland practical problems. Successfulintroductionof a VAT depends in large measure on whether the country has had previousexperience taxes,

the nature

of the taxes

with general

sales

that the VAT will replace, the lead-in

tine, and how the VAT is structured

in terms of rates,

exemptions,

and

treatmentof small taxpayers. The main issues of VAT administration concern Identifyingtaxpayers,processingreturns,controllingcollections,making refunds,auditing taxpayers,and levying penalties. Once a VAT is in place, admini;trativeconstraintstend to distort some of Its features. Administrationswith Insufficientresources frequently over-emphasizeenforcementefforts among large taxpayers,and restrictive refund practices tend to distort the characterof consumption-type VATs. Thus the broad-basedand neutral tax discussed in public finance treatises is very differentfrom the VAT prevailingin most developing countries. difference.

Administrative

constraints

are responsible

for the

-

3.

19

-

Self-enforcingadiinistrativemethods ard cross-checkingdevices One suggestedmethod of reducingtax administrationdifficultiesis

self-enforcingmethods that will encouragetaxpayersto report Incomes and expenditures.1/ Kaldor, in his well-knownreport on India, was perhaps the first economist to suggest linking taxes together to force greater compliance. Kaldor suggestedthat five taxes--theincome tax, the capital gains tax, the wealth tax, the personalexpendituretax, and the gift tax--be filed in a single comprehensivereturn and assessed simultaneously.The taxes are self-checking--that Is, concealmentor understatementof items in order to reduce liabilityin a particulartax would increase liabilityin other taxes; and informationfurnished by a taxpayer in order to prevent over-assessmentof his own liabilities automaticallyreveals the receiptsand gains made by other taxpayers. Riggins has carried Kaldor's idea furtherby introducinga selfenforcingtax system for developingcountries. Riggins' system includes a personalincome tax (includingcapital gains), a corporationincome tax, a general sales or turnovertax, a wealth tax, a tax on excess inventory,and a personal expendituretax. Theoretically,the KaldorHiggins system is self-checkingbecause personalexpenditureIs defined as the excess of income over savings,and savings are equal to the increasein net wealth. Thus, taxpayerswho under-reporttheir expenditureby overstating their savings increasetheir wealth tax

1/ See Mansfield,op cit.

- 20 -

liability. A seller of a propertywho understateshis capital gains hurts the buyer, because the buyer cannot claim the full amount of the investment,thereby forcing him to declare higher expendituresand increasinghis expendituretax liability. The excess inventory tax is designed to discourageunder-reportingof sales, thus helping enforce sales and income tax. The more grandiose self-enforcingschemes suggested by economists have generally received short shrift from tax administrators. Goode, in writing on economic aspects of tax administration,comments: these proposalsappear so unrealisticthat a detailed critique is not worthwhile. In my opinion their authors exaggeratedthe proclivityof taxpayers to refined calculations,the capacity of tax departments for using the great mass of data that would be generated,and the receptlvity of governmentsto fiscal innovations. I suspect that most tax administratorswill regard the Idea of a self-enforcingtax system as fantastical. Even if put into operatlon the proposed systems would not prevent evasion in cases in which both parties to a transactionomit it from their records or understateits amoonc.

Both parties could evade

the related taxes, and as no conflictof interestwould arise between them, neither vould have an economic incentive to report correctly."1/ Despite the justifiedcriticismof elaborate self-enforcing schemes,tax administratorsmay corn to see a grain of truth in the logic

of such schemes,

and one suspects

they

should

not be dismissed

1/ See Goode, Richard, Government Finance in Developing Countries, (Washington, D.C., 1984). Brookings Institution

-

entirely.

21 -

In many developing as well

as industrial countries, import

duties and taxes on domestictransactionsare tvpicallyadministeredby separatedepartments,with little or no contact or exchange of information among them. In some countries sales and income taxes are also administeredby separatedepartments,and outside experts usually recommendthe exchangeof informationbetween these revenue departments. Such an exchange is highly advisable because gross sales are an element of income tax determination,and the exchangeof information forces consistencyIn tax reporting. As computersystems allow great quantitiesof data to be stored and used, the idea of self-enforcing taxes

based on matching

of iformation

more possible. In developing

from different

countries

sources

becomes

the scope for self-checking

taxes will be limited,however,by the fact that so much economic activity stems from the self-employed.

4.

Computerization 1/

Over the past decade computer technologyhas become an integral part of tax administrationoperationsin many developingcountries. This technologyhas an obvious capacity to perform more rapidly such routine tasks as processingforms, compiling statisticsand using available data more effectivelyto improve forecastingof fiscal revenues. Furthermore,revenue administratorsin developingcountries face expandingworkloads: the number of taxpayershas grown rapidly,

1/ See Corfoat,Franjois, 'ComputerizingRevenue AdministrationsIn LDCs," Finance and Development,(September1983).

- 22 -

proceduresand regulationshave become more complex, internationaltrade has increasedand greater quantitiesof data for economic and fiscal policy making are necessary. In theory, computer technologycould play a large part in solving these challenges. Rowever,a cAreful distinction should be made between the ability of computer technologyto perform routine tasks more rapidly and its ability to actually increase revenue collections. After an initial period of over-optimismIn the 1960s-70s it has become clear that computer technologyis not a panacea for revenue administrations. In the first place the improved technology must be effectivelyused for routine tasks. More importantly,computer technologymust be combinedwith politicalwill and effective organization If it is to yield its potential for greater revenue. Technology without accompanyingenforcementprocedures,for example, will not help in increasingrevenues. a.

Master files

Given these caveats,how can computer technologyhelp improve tax administration? A central idea is the developmentof a master file

system.

This unique

The system assigns number directly

aids

a unique

number to each taxpayer.

in identifying,

assessing

and col-

lecting direct taxes, such as the personal lncome tax, the corporate income tax and the property

tax.

In addition,

information

relating

to

the taxpayer, such as value of Imports or gross sales, can be stored togetherwith his unique number. In this way the master file can

- 23 -

for audlt. If the taxpayer identibecome an Importantinstrument ficationnumber is tied to other means of identification,such as a social securitycard, a driver's license or a passport, it also can be a potentiallypowerfulmeans of tax enforcement. As noted above, the master file number is a potentiallypowerful aid to tax administration, but Is must be combined with politicalwill and human organizationto be effective. b.

Applicationto customs

Cooputer technologycan aid in customs administrationto identify importers,clear goods, manage tariff files, control inventoriesand complle externaltrade statistics. These functionsare usually divided into two categories: central processingand customs office functlons. At the central processingsite, maintenanceand compilationof the "Integratedtariff,"and data centralizationand !nformationservices are the main functions. Automated ciearancerequires the creationof a set of files (the integratedtariff) that would contain, for each customs tariff heading, all the data needed to verify that goods meet requirements(quotas,licenses,health regulations,etc.) and to calculateduties and taxes payable. The data centralizationand informotion external insurance

services trade

of computer system are designedto produce

statistics,

and freight

analyses studles.

of Import and export prices, and

Useful

information,

such as general

- 24-

accountingestimationof cost of duty-free and privilegedclearances, fraud analysesand changes in workloadscan also be generated for customs management. In customs offices, automatedclearance of importedand exported goods is the main applicationof computer systems. Principal operations Include entering,checkingand storing data; printing out of declarations; applicationsof regulationson external trade (e.g., licenses,quotas, prohibitions,and health controls);calculation of duties and other levies;and identifyingwhere document checks and physical examination of goods might be needed. These are normally processed instantaneousli. Less time-sensitivemanagesenttasks are

often handled through batch

processing. This method allows a computer to collect data and process It at a later date and can be used to maintainofficial records,produce daily periodicaccounting statementsand compile official activity reports and tables. c.

Application to Internal tax administration

Tax collectionproceduresvary from country to country,but computer systems have commonlybeen used to process returns and payments,assist In enforcementoperationsand compile statistics. In processingtax returns and payments,computers can pre-address forms and payment vouchers, check the accuracyand consistencyof data reported,calculate taxes, identifycomputationerrors, maintain taxpayers'records and prepare refund, assessment,and penalty notices.

-

25

Mathematicalformulasand statisticalprograms can be developed to select returns for audit, and verify data and identifytax evaders through cross-checkingwith external sourcesor other computer files. At minimal cost, computerprograms can also produce opeTating and statisticalreports designed to assist tax managers and policy makers in managementand planning,formulationof tax policy and economic analysis and research. An importantfunctionin tax administrationis the selectionof returns for audit so that limited resourcesare focused on particular areas to maximize gains in revenue and elicit compliance. In identifying likely candidatesfor auditing, computerprograms use selection criteria and classificationtechniquesto assign weights to various characteristicsinvolvingthe high probabilityof error, change and evasion. The formulasused in this process are kept secret not only to avoid manipulationof returns by taxpayersbut also to ensure Impartialityin the selectionof returns. d.

Introductionof computers in developingcountries

Developingcountries introducingcomputer systems for revenue administrationface a number of importantdecisions regardingdesign and implementation.One concerns the structureof the computersystem; satisfactoryresults have been producedboth by those systems servicing solely the Tax Departmentfrom within, and those systems located outside the Departmentand perhaps servicingseveral other entitiesas well.

-26-

In an externalsystem the design, developmentand operation are provided by an organizationthat is independentof the tax collectingdepartments and that may be responsiblefor providingall publi. entities with the informationneeded for their operationsand decisions. Such are the systems used in Brazil, El Salvador, and most of the nations of francophoneAfrica. In an approach using Internalsystems the Finance Ministry may require operating departmentseach to be responsiblefor the supervisionand control of their own computer systems. The U.S. InternalRevenue Service, for example, organizesits operations in this manner, as do most of the tax departmentsof the member countries of the Inter-AmericanCenter of Tax Administrators. While the Initial choice may depend upon several factors, including the scale of operations to be performed,capital expenditures,and efficientutilizationof computer hardware,one major considerationis the availabilityof adequate numbers of skilled computer technicians. Because computer costs are falling and the number of available technicians is increasing,and because servicesprovidedby the central computer organizationmight prove unresponsivein terms of either seasonal fluctuationsof work or unplanned events (tax legislation changes, for example),a mixed approach may be preferable and is often applied. Under such a scheme the central computerof the Ministry of Finance usually provides services for policy activitiesand for the ministry'sown statisticaland national reportingneeds and may, when

-

27 -

necessary,provide serviceson a time-sharingbasis for some collection work of the revenue departments. On the other hand, the data processing units of the revenue departmentsoperate their own computer systems and perform time-sensitiveactivities,such as issuing custams

clearances,

tax refund checks, assessmentnotices, tax receipts,and answering inquiries. e.

Conclusion

In conclusion,there clearly are potentialadvantagesto properly applied systems of data processing. In customs work the growing volume of internationaltrade, new methods of transport,increasinglycomplex regulations,

necessity borders

and expanded

information

requirements

may make automationa

If developing countrieswish to prevent undue delays at their and to increase,

or even just

maintain,

their

share of world

trade. In administrationof internal taxes, increased compliancewith tax obligationsand more efficientcollectionare becoming priorities for developingcountries. Automationmay eventuallyoffer the most effective neansof meeting these needs. Our initial note of caution should remain, however. For many reasons,both administrativeand political,the Lntroductionof computer systemsmay not achieve the intendedresult. Many of the difficulties associated appropriate specific

with automation, planning goals.

however,

and a careful

The experience

can be avoided assessment

or minimized

of current

with

needs and

of many Industrialand a growing number

- 28 -

of developingcountries,as well as the availabilityof technical assistance,can help a country make the transitionfrom manual to computerizedsystems a successfulone.

5.

PresumptiveTaxation 1/ Presumptive taxationrefers to the use of simple methods of

assessingcomplicated taxes, or in some cases the replacementof more sophisticatedtax legislationvith simplerrules. Presumptivetaxes my be used in the field of personaland corporate income taxes, as well as propertyand land taxes. In the case of income taxes, public finance xperts tend to think of individualand company income tax as being imposed on a well-definedand accuratemeasure of recorded income over a given period, normally a year. In fact, income tax assessmentfor large numbers of taxpayers in both industrialand developingcountriesis "presumptive'--that is, It is legally defined on the basis of appropriate indicators. In most cases presumptivemethods are used as a simple administrativeexpedient,but they can also be used for efficiencyand equity goals. Presumptionsare used to assess developing taxpayers

countries, comprise

adminlstrative that

but especially a large

resources

fraction are generally

taxpayers

In both developed

and

In the latter,where Ohard-to-taxs of the taxpaying scarce.

population

and

One developedcountry

has a well-establishedsystem of income presumptionis France,

1/ This section relies heavily on Casanegrade Jantscher,Nilka, and Tanzi, Vito, "The Use of PresumptiveIncome in Modern Tax Systems," publicationforthcoming.

-

29

-

where the forfait system is used widely. The forfait system establishes alternativelegal bases of assessment,using indicatorsto determine estimated income rather than assessments that are supposed to be based on conventionalrecords. Forfaitsare used to assess the income tax of farmers,unincorporatedbusinessenterprisesand professionalpersons whose gross receipts fall below stipulatedlevels. The process of establishinga presumptiveincome zay involve negotiationbetween thetaxpayerand tax officials. Apart from the specialuse of the forfait,where the presumptivebasis is establishedIn the legislation itself,standardassessmentsbased on gross receipts,assets or visible wealth are employedas administrativedevices. The degree the choice plied.

of economic

development

tends

to influence

of methods for estimatingincomes and the way they are ap-

Countries

in the earlier

rough and ready methods because study

of a country

the profitability

stages of developmenttend to apply they have few personnel

of different

economic

activities

qualified

to

and establish

the indices required for calculatingpresumptiveincomes. In those countriesin which sectoralstudies have been made and appropriate indices have been established,it is possible to estlmate Incomeswith a much higher degree of accuracy. A perusal of the legal provisionsthat establish presumptionsof income does not, in general,disclose to what extent a particularcountry is applying the presumptionsestablishedin the law nor how they are applied. The answers will depend on the

- 30 -

country's circumstancesand particularlyon the aveilabilityof the administrativeresourcesneeded to cope with the complexitiesof certain presumptivemethods. One of the criteria for classifyingpresumptionsof income Is whether or not they are applied generallyfor assessing taxpayers' income. Some methods for estimatingincome are regularly applied to entire sectors of taxpayersas a substitutefor actual incomes based on accounts. Other presumptionsof income apply only when taxpayersomit to file an income tax return, or their return is audited. The forfait method and the standardassessmentmethods used In a number of countries are examplesof presumptivemethods that are applied In a wide variety of circumstances. Presumptionsof income that apply only when taxpayers do not submit a return or when they are audited include ethods ranging from the use of specific factors and indicesof profitabilitydetermined for different activitiesto crude presumptionsbased on a single factor, such as the total assets of the taxpayer. A variety of economicbases and methodsof calculationare used to provide presumptionsof income. For example,certain presumptions are based exclusivelyon the taxpayer'snet wealth or on the value of the enterprise. Still others are based on visible signs of wealth. The forfaitand the standardassessmentmethods use several key factors and indices of profitability,which vary by activity,to determine the taxpayer'sincome.

- 31 -

A presumptivetax that is used In lieu of the corporatetax on net profits Is a tax on gross receipts. Such a tax avoids the difficulties of measuringsuch sophisticatedconceptsas depreciationin calculating net profit. This tax has been found to be effective in.terms of revenue yield and ease of administration. FrancophoneAfrican countrieshave been pioneers in the establishmentof minimum corporate income taxes. This tax can be credited against the regular corporate tax, but no refundsare allowed if the minimum tax exceeds the corporate tax. The minimum tax based on gross receipts is equivalentto a simple presumptionof income. For example, if the corporate tax rate ln a country that applies this system is equal to 40 percent of net profits and the minimum tax is equal to 1 percent of gross receipts,authorities are acting as if all corporationsearn a minimum net taxable income equal to 2.5 percent of their gross receipts. As an example outside Africa, in 1983 Colombia establisheda general presumptionof net income based on gross

receipts,

applicable

to all

taxpayers,

individual

and

corporate,except those whose main sourcesof income are wages and salaries. The law presumesthat net income amounts to at least 2 percent

of gross

receipts.

Like presumptions assets,

presumptions

based on net wealth based on gross

receipts

or on owuership

of particular

are not a panacea

for

tax

administrationsattemptingto improve taxpayercompliance. In most developingcountries concealmentof gross receiptsis a favoredmethod

32 -

-

of tax evaslon. Presumptionsof income based on gross receipts thus maLnly affect taxpayerswho cannot easily conceal gross receipts (e.g., large corporatlons). As a result of such presumptions,corporations with genuine losses are treated in the same manner as corporationsthat artiflciallyreduce their profits by such methods as manipulatlng transferprlces. All corporatlonswith the same turnover pay the same tax. For smaller enterprisesthat have prevlouslyconcealeda portlon of their gross recelptsand continue to do so, the LntroductLonof a presumptLonof net income based on turnover ls of llttle consequence and has no material effect on thelr tax liabllity. The income tax legislationof several countries includespresumptions

of income based on vislble

apply

only to indivlduals.

the tax department Lncomes higher signs

of wealth.

of wealth

than

those

reported

It is left

such as Brazil

by taxpayers

terms,

on the basls

to the administration

to decide

and Peru, to presume of visible which signs

to use and what level of income to attach to them. In other Lncluding

countries,

presumptlons

Prance,

Italy

are

described

Such signs

of wealth

and several

based on visible

in the income tax act.

considered

residences,

In some countrLes,

is empowered, ln somewhat general

countries,

specified

slgns of wealth. These presumptions

The signs

and each is assigned

usually

include

of wealth

of wealth

that

African are carefully *ust be

an income equivalent.

the taxpayer's

number of domestLc servants,

planes and race horses.

signs

francophone

main and secondary

automobiles,yachts, private

33 -

-

In practice,presumptionsbased on visible signs of wealth have proved difficultto apply. When they are establishedin general terms, tax administratorsare hard pressed to decide which signs of wealth to use as a basis for the presumptlonand how to establish the income equivalentof each. In those countries in which both the signs of wealth and their income equivalenthave been specifiedin the statute, the inflexibiltyof the provisionsmay lead to considerableunfairness. Recognizingthese problems, tax departmentstend to apply these presumptionscautiouslyand only when additionalassessmentscannot be supportedby other means. One of the areas in which such presumptions have proved useful is in supportingassessmentson illegal incomes, '.ich as those derived from racketeeringand drug trafficking. Many developingcountries use estimatedassessmentmethods for taxpayers.

the incomes of 'hard-to-tax proprietorships,

individual

farmers,

These taxpayers and professionals.

are mainly The forfait

method mentioned

above has inspireda number of other countries to adopt

systems.

But to successfullyimplementa forfait system several

similar

requirements nical activlty.

must be met.

First,

the tax department

must have the tech-

resources to make detailed studies of profitabilityby type of Second,

an adequate

number of tax officials

must be available

to verify Informationprovided by taxpayersabout the characteristicsof their business. Third, because the forfaitinvolvesdiscussionsbetween officialsand taxpayersregarding the level of the assessment,officials must be strictlysupervisedand adequatelypaid. Otherwise,the system creates strong incentivesfor corcuption.

- 34 -

Not many tax administrationscan fulfill these requirements. Those countriesthat have tried to implementsystems similar to the forfaitwithout adequate resourceshave ended up with highly flawed systems. One of the principal obstacleshas been the lack of resources to draw up detail d sectoral profitabilitystudies. Some countrles have managed to study a half dozen sectors,and no more. In such circumstances,discussionsbetween officialsand taxpayersabout assessments are based mainly on subjectiveimpressions. This has led to unrealistic assessmentsand to corruptionamong tax officials. In their search for more objective systems for estimatingincomes, a number of countrieshave tried to adapt the system developed originally in Israel under the name of tachshiv. This system emphasizesthe use of objective factors and indices to estimate the income of taxpayerswho do not keep adequatebooks and records. PhysicalInputs and factors such as the number of employees are highly important for the determination of each enterprise'sincome. If, for example, the enterpriseto be assessed is a barbershop,the assessmentguidelines(tachshiv)for this activitywill contain Instructionsfor estimatingthe enterprise's income accordingto the differentkinds of servicesprovided, the equipmentof the establishment,its location,work schedules,and the visits to a representativesample of businesses. The average profitability of the sector and its relationshipto specific factor and indices is discussedwith representativesof the sector before the tachshivis issued. More than 80 tachshivhave been developed.

- 35 -

Some aspects of the Israeliexperiencewith standardassessments have been criticized. Taxpayerswhose incomes are above the averageson which the tachshiv are based may pretend that they do not have adequate books and records of the tachshiv

to establish on precise

into a tax on the

factors

their

factors

actual tends

income.

The heavy reliance

to transform

the tax on income

set out in each tachshiv. Taxpayersare,

therefore,motivated to alter these factors in their business establishmentsin order to obtain a lower assessment. In spite of these defects, the Israeli system has been imitatedby other countries. Korea, for example,has Introduceda stan4ardassessment along the lines of the tachshiv. Other developingcountrieshave made efforts in this direction,but few have made much headway. Faced with the task of estimatingthe income of "hard-to-tax" taxpayers,some developingcountrieshave devised simple solutions that in practice depart radicallyfrom the preceptsof income taxation. For example, Ghana developeda standardassessmentsystem in the early 1960s that

resulted

in fixed

lump-sum payments for different

activities. These paymentswere establishedby determiningthe average taxable income of a few taxpayersselectedat random from each class of self-employedtaxpayers. Althoughthe lump-sum paymentswere established

as a minimum income tax,

to standard

in practice

most taxpayers

subject

assessments paid only the prescribedlump-sumamounts.

- 36-

As regards farmers,a number of countries have attempted to assess their income on the basis of the potentialoutput

of their land.

Profession-

als, on the other hand, are sometimesassessed a minimum income tax based on some estimate of average potentialearnings. Most developingcountries have not solved satisfactorilythe problemof how to estimate the income of "hard-to-tax"taxpayers. Their objective is to devise estimationmethods that will not divert an excessiveproportionof administrativeresources from more productive work. In Portugal, for example,35,000 enterprisespaid profits tax on actual incomes in 1983, while approximately340,000 businessespaid tax on a presumptivebase. Yet the 35,000 enterprisesthat paid on actual incomesaccounted for three-quartersof total profits tax collections. In these circumstances,tax administrationofficialsmust strive to minimizeadministrativeinvolvementwith low-yieldtaxpayers,without abandoningefforts to collect some tax from a'llenterprises. Despite the difficultiesmentioned it is clear that a need exists in developingcountries for simple methods to tax the 'hard-to-tax" groups that now escape income taxation. Presumptivemethods by nature cannot be exact, but my well be preferableto ad hoc judgmental assessmentsusing unspecifiedcriteria.

- 37 -

V. Summaryand Conclusions This paper has examined the strategyand tools of tax administrationin develcpingcountries. The traditionalaim of tax administrationis to assess, collect and enforce a given set of legislation. We have seen that the task of tax administratorsIn developingcountries is not so clear-cut. Burdenedwith legislation that may not be enforceable,they must select how a body of legislation will actuallybe applied. We have also noted that emphasison easyto-administertaxes results in a flawed tax structure,based in large part on foreign trade taxes. Althoughtax administratorscannot change legislation,they can help implementand/or make possible changes In legislationthat would improve the effective tax structure. These efforts should be aimed at implementingmore broadly based Income and consumptiontaxes in order to reduce dependenceon foreign trade taxes. For the personalincome tax this strategyshould mean directing additionaladministrativeefforts toward income other than wages and salaries,and especiallyearnlngs of the self-employed. For the company tax, efforts should be made to reach smallerfirms so that such firms are not subsidizedrelative to larger, sore modern establishments. With regard to consumptiontaxes, administrativeefforts should support legislativechanges to broaden the scope of sales taxes, making posstble

- 38 -

their applicationto servicesand to retail establishments. This type of administrativeeffort would help create a broad-basedconsumptiontax that would not discriminatebetween domesticand foreign goods and that would be r3eful for stabilizationpurposes. In follownpga policy of using administrativemeasures to promote a better tax structure,considerationshould be given to using less sophisticatedtaxes that would still broaden the tax base. Given this overall strategy,what are some more specific tools and solutionsthat can be used to Improve tax administrationin developing countries? Two importanttools that overlap are the concept of withaholdingand the use of computertechnology. WtthholdiugIs applied most successfullyto wages, interestand dividends,where the number of payers of Income is small

relativeto the number of receivers.

Computer technologymakes it possible to assign each taxpayer a unique number in a master file, and thus to simplify the process of withholding and enforcement. Computer technologyalso makes it possible to gather related informationon a given taxpayerand to use cross-checking methods to ensure accuracy. Many developingcountries have turned to Indirecttaxes such as the value-addedtax, instead of relylg heavily on the difficult-to-admlnister personalincome tax. Finally, presumptive methods of assessmenthave been used to gain added revenue while simplifyingadministration.

PPR Workina Paver Series

WPS16

WPS17

WPS18

WPS19

June 1988

S. Torrijos

Stanley Fischer

June 1988

S. Berteismeier 33-58

Harold Noah John Middleton

June 1988

W. Ketema 33651

Chnstiaan Grootaert

June 1988

R. Vartanian 34678

Ramon Lopez Vinod Thomas

June 1988

61679

Jaime de Melo Patrick Messerlin

June 1988

S. Fallon 61680

Jean-Paul Azam Patrick Guillaumont Sylviane Guillaumont

June 1988

E. Zamora 33706

A. Mead Over, Jr.

July 1988

N. Jose 33688

John Middleton Terri Demsky

July 1988

W. Ketema 33651

Economic Development and the Debt crisis

Chna's Vocational and Technical Training

Cote d'lvoire's Vocational and Technicat Education

WPS21

Effects of European VERs on Japanese Autos

WPS24

Patick Messerlin

Antidumping Laws and Developing Countries

Imports and Growth in Africa

WPS23

Contact for paper

Author

WPS20

WPS22

Date

Title

Methodological Problems in CrossCountry Analyses of Economic Growth

Cost-Effective Integration of Immunization and Basic Health Services in Developing Countries: The Problem of Joint Costs

World Bank Investments in Vocational Education and Training

WPS25

Israel's Vocational Training

Adrian Ziderman

July 1988

W. Ketema 33 6 5 L

WPS26

Changing Pattems in Vocational Education

John Middleton

July 1988

W. Ketema 33651

Marlaine E. Lockheed Bruce .:r Ronalo Ayirongo

July 1988

R. Rinaldi 33278

Bela Balassa

June 1988

N. Campbell 33769

Emmanuel Jimenez Marlaine E. Lockheed

August 1988

T. Hawkins 33678

Bela Balassa

July 1988

N. Campbell 33769

WPS27

WPS28

WPS29

WPS30

Family Background and Student Achievement

Temporary Windfalls and Compensation Arrangements

The Relative Effectiveness of Single-Sex and Coeducational Schools in Thaitand

The Adding Up Problem

PPR Workinc Pauer Series Oontmac

Title

Author

Date

for paper

WPS31 Public Finance and Economic Development Bela Balassa

August 1988

N. CAmpbell 33769

WPS32 MunicipalDevelopmentFunds and Intermediaties

Kenneth Davey

July 1988

R. Blade-Charest 33754

WPS33 Fiscal Policyin CommodityExportingLDCs

John Cuddington

July 1988

R. Blade-Charcst 337S4

WPS34 Fiscal Issucs in Macroeconomic Stabilization

Lance Taylor

September 1988

R. Blade-Charest 33754

WPS3S Improvingthe Allocation and Management of Public Spending

Stephen Lister

August 1988

R. Blade-Charest 33754

WPS36 Means and Implicationisof Social Security Finance in Developing Countries

DouglasJ. Puffert

August 1988

R. Blade-Charest 33754

WPS37 Black Market Premia, ExchangeRate Unification and Inflation in Sub-SaharanAfrica

Brian Pinto

July 1988

R. Blade-Charest 33754

Larry Schmreder

September 1988

R. Blade-Charest 33754

WPS39 Fiscal Policyin Low-IncomeAfrica

Stephen A. O'Connell

July 1988

R. Blade-Charest 33754

WPS40 Financial Deregulationand the Globalizaaionof Capital Markets

Eugene L Versluysen

August 1988

R. Blade-Charest 33754

WPS41 Urban Property Taxation in DevelopingCountries

WilliamDillinger

August 1988

R. Blade-Charest 33754

WPS42 Government Pay and EmploymentPeicies and GovernmentPerformancein DevelopingEconomies

David L Lindauer

August 1988

R. Blade-Charest 33754

Tax Administration Division

August 1989

WDR Office 31393

David L Lindauer

September 1988

R. Blade-Charest 33754

W?S38

lntergovernmentalGrants in DevelopingCountries

WPS43 Tax Administration in Developing Countries: Strategies and Tools of Implementation WPS44 The Size and Growth of Government Expenditures

7

A

-.

'1

i.