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Domestic revenue mobilization has been a longstanding challenge for countries in the Middle East and Central Asia. Insufficient revenue has often constrained priority social and infrastructure spending, reducing countries' ability to reach the Sustainable Development Goals, improve growth prospects, and address climate related challenges. Moreover, revenue shortfalls have often been compensated by large and sustained debt accumulation, raising vulnerabilities in some countries, and limiting fiscal space to address future shocks. The COVID-19 pandemic and the war in Ukraine have compounded challenges to sustainable public finances, underscoring the need for revenue mobilization efforts. The recent global crises have also exacerbated existing societal inequalities and highlighted the importance of raising revenues in an efficient and equitable manner. This paper examines the scope for additional tax revenue mobilization and discusses policies to gradually raise tax revenue while supporting resilient growth and inclusion in the Middle East and Central Asia. The paper's main findings are that excluding hydrocarbon revenues, the region's average tax intake lags those of other regions; the region's fragile and conflict-affected states (FCS) face particular challenges in mobilizing tax revenue; In general, there is considerable scope to raise additional tax revenue; countries have made efforts to raise tax collection, but challenges remain; tax policy design, notably low tax rates and pervasive tax exemptions, is an important factor driving tax revenue shortfalls; weak tax compliance, reflecting both structural features and challenges in revenue administration, also plays a role; and personal income tax systems in the region vary in their progressivity-the extent to which the average tax rate increases with income-and in their ability to redistribute income. These findings provide insights for policy action to raise revenue while supporting resilient growth and inclusion. The paper's analysis points to these priorities for the region to improve both efficiency and equity of tax systems: improving tax policy design to broaden the tax base and increase progressivity and redistributive capacity; strengthening revenue administration to improve compliance; and implementing structural reforms to incentivize tax compliance, formalization, and economic diversification.

Taxation. --- Tax administration and procedure.

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Lucas (2004) asserts that "Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution... The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production." In this paper we evaluate this claim using an extended version of Lucas' (1987) welfare-evaluation framework. Surprisingly, we find that the welfare costs of inequality outweigh the benefits of growth in most cases. These calculations support the case for a research agenda that treats not only growth but also inequality as a priority.

Economics -- United States -- History. --- Economists -- United States. --- Income distribution -- Econometric models. --- Lucas, Robert E. --- Public welfare -- Econometric models. --- Macroeconomics --- Aggregate Factor Income Distribution --- Macroeconomics: Consumption --- Saving --- Wealth --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Economic growth --- Income inequality --- Consumption --- Consumption distribution --- Business cycles --- Income --- Income distribution --- Economics --- United States --- Economic development --- Poverty --- Econometric models.

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How can governments reduce the prevalence of cross-border tax fraud? This paper argues that the use of digital technologies offers an opportunity to reduce fraud and increase government revenue. Using data on intra-EU and world trade transactions, we present evidence that (i) cross-border trade tax fraud is non-trivial and prevalent in many countries; (ii) such fraud can be alleviated by the use of digital technologies at the border; and (iii) potential revenue gains of digitalization from reducing trade fraud could be substantial. Halving the distance to the digitalization frontier could raise revenues by over 1.5 percent of GDP in low-income developing countries.

Estonia, Republic of --- Business and Economics --- Exports and Imports --- Taxation --- Industries: Information Technololgy --- Fiscal Policies and Behavior of Economic Agents: General --- Tax Evasion and Avoidance --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- 'Panel Data Models --- Spatio-temporal Models' --- Technological Change: Choices and Consequences --- Diffusion Processes --- Business Taxes and Subsidies --- Trade Policy --- International Trade Organizations --- Trade: General --- Information technology industries --- Public finance & taxation --- International economics --- Digitalization --- Value-added tax --- Tariffs --- Imports --- Tax evasion --- Technology --- Taxes --- Revenue administration --- International trade --- Information technology --- Spendings tax --- Tariff --- Panel Data Models --- Spatio-temporal Models

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How do firm-specific actions-in particular, innovation-affect firm productivity? And what is the role of the financial sector in facilitating higher productivity? Using a rich firm-level dataset, we find that innovation is crucial for firm performance as it directly and measurably increases productivity. Moreover, its effects on productivity are mediated through the financial sector; firms reap the maximum benefits from innovation in countries with well-developed financial sectors. This effect is particularly important for firms in high-tech sectors, which typically have higher external financing needs.

Finance: General --- Industries: Information Technololgy --- Production and Operations Management --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- Financial Markets and the Macroeconomy --- Macroeconomics: Production --- Technological Change: Choices and Consequences --- Diffusion Processes --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics --- Finance --- Information technology industries --- Financial sector development --- Emerging technologies --- Productivity --- Total factor productivity --- Capacity utilization --- Financial markets --- Technology --- Financial services industry --- Industrial productivity --- Industrial capacity --- India --- Industries --- Industrial management. --- Technological innovations. --- Finance.

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We present a stylized real model of the Chinese economy with the objective of explaining two features: (1) domestic production is highly competitive in the sense that an accumulation of capital that raises the marginal product of labor elicits increases in employment and output rather than only in wages; and (2) even though the domestic saving rate is high, foreign direct investment is also substantial. We explain these features in terms of a conventional neoclassical growth model-with no monetary or nominal exchange rate policy-by including two aspects of the economy explicitly in the model: (1) low production wages are sustained by a large reserve army of rural labor which drives internal migration, and (2) domestic capital is distinct from importable capital and complementary with it in production. The results suggest that underlying real phenomena are important in explaining recent history; while nominal renmimbi appreciation may dampen price and wage increases, it would probably not change the real factors that have sustained rapid growth.

Business & Economics --- Economic History --- Economic development --- Investments, Foreign --- Econometric models. --- China --- Economic conditions --- Economic policy --- Capital exports --- Capital imports --- FDI (Foreign direct investment) --- Foreign direct investment --- Foreign investment --- Foreign investments --- International investment --- Offshore investments --- Outward investments --- Development, Economic --- Economic growth --- Growth, Economic --- Cina --- Kinë --- Cathay --- Chinese National Government --- Chung-kuo kuo min cheng fu --- Republic of China (1912-1949) --- Kuo min cheng fu (China : 1912-1949) --- Chung-hua min kuo (1912-1949) --- Kina (China) --- National Government (1912-1949) --- China (Republic : 1912-1949) --- People's Republic of China --- Chinese People's Republic --- Chung-hua jen min kung ho kuo --- Central People's Government of Communist China --- Chung yang jen min cheng fu --- Chung-hua chung yang jen min kung ho kuo --- Central Government of the People's Republic of China --- Zhonghua Renmin Gongheguo --- Zhong hua ren min gong he guo --- Kitaĭskai︠a︡ Narodnai︠a︡ Respublika --- Činská lidová republika --- RRT --- Republik Rakjat Tiongkok --- KNR --- Kytaĭsʹka Narodna Respublika --- Jumhūriyat al-Ṣīn al-Shaʻbīyah --- RRC --- Kitaĭ --- Kínai Népköztársaság --- Chūka Jinmin Kyōwakoku --- Erets Sin --- Sin --- Sāthāranarat Prachāchon Čhīn --- P.R. China --- PR China --- Chung-kuo --- Zhongguo --- Zhonghuaminguo (1912-1949) --- Zhong guo --- Chine --- République Populaire de Chine --- República Popular China --- Catay --- VR China --- VRChina --- 中國 --- Jhongguó --- Bu̇gu̇de Nayiramdaxu Dundadu Arad Ulus --- Bu̇gu̇de Nayiramdaqu Dumdadu Arad Ulus --- Bu̇gd Naĭramdakh Dundad Ard Uls --- Khi︠a︡tad --- Kitad --- Dumdadu Ulus --- Dumdad Uls --- Думдад Улс --- Kitajska --- 中国 --- 中华人民共和国 --- Capital movements --- Investments --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- China (Republic : 1949- ) --- PRC --- P.R.C. --- BNKhAU --- БНХАУ --- Exports and Imports --- Labor --- Macroeconomics --- Labor Economics: General --- Wages, Compensation, and Labor Costs: General --- Geographic Labor Mobility --- Immigrant Workers --- International Investment --- Long-term Capital Movements --- Aggregate Factor Income Distribution --- Labour --- income economics --- Finance --- Wages --- Labor mobility --- Income --- Labor economics --- China, People's Republic of --- Income economics