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An effective tax system is fundamental for successful country development. The first step to understand public revenue systems is to establish some commonly agreed performance measurements and benchmarks. This paper employs a cross-country study to estimate tax capacity from a sample of 104 countries during 1994-2003. The estimation results are then used as benchmarks to compare taxable capacity and tax effort in different countries. Taxable capacity refers to the predicted tax-gross domestic product ratio that can be estimated with the regression, taking into account a country's specific economic, demographic, and institutional features. Tax effort is defined as an index of the ratio between the share of the actual tax collection in gross domestic product and the predicted taxable capacity. The authors classify countries into four distinct groups by their level of actual tax collection and attained tax effort. This classification is based on the benchmark of the global average of tax collection and a tax effort index of 1 (when tax collection is exactly the same as the estimated taxable capacity). The analysis provides guidance for countries with various levels of tax collection and tax effort.

Debt Markets --- Economic Theory and Research --- Emerging Markets --- Finance and Financial Sector Development --- Macroeconomics and Economic Growth --- Private Sector Development --- Public Sector Economics and Finance --- Tax --- Tax administration --- Tax base --- Tax collection --- Tax expenditures --- Tax Policy --- Tax reforms --- Tax revenues --- Tax system --- Taxation --- Taxation and Subsidies

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This paper provides an overview of the fiscal problems faced by five urban agglomerations in India, namely, Delhi, Hyderabad, Kolkata, Chennai, and Pune. It analyzes the fiscal health of the five urban agglomerations, quantifies their revenue capacities and expenditure needs, and draws policy recommendations on the means to reduce the gaps between revenue raising capacities and expenditure needs. The main findings suggest that, except for five small urban local bodies in Hyderabad, the others are not in a position to cover their expenditure needs by their present revenue collections. All the urban agglomerations have unutilized potential for revenue generation; however, with the exception of Hyderabad, they would fail to cover their expenditure needs even if they realized their revenue potential. Except in Chennai, larger corporations are more constrained than smaller urban local bodies. The paper recommends better utilization of "own revenue" through improved administration of property taxes, implementation of other taxes, and collection of user charges. It recommends that state governments should explore the option of allowing local bodies to piggyback a small proportion on their value-added tax collections. Another way to reduce the fiscal gap would be to earmark a portion of the sales proceeds from land and housing by state governments sold through their development agencies for improvements in urban infrastructure. The paper also recommends that the State Finance Commissions should develop appropriate norms for estimating expenditure needs, based on which transfers from the state to local governments can be decided.

Cities --- Debt Markets --- Expenditure --- Expenditure decisions --- Expenditure needs --- Finance and Financial Sector Development --- Fiscal decentralization --- Fiscal management --- Local governments --- Macroeconomics and Economic Growth --- Policy recommendations --- Public disclosure --- Public finance --- Public Sector Development --- Public Sector Economics and Finance --- Revenue capacity --- Revenue collections --- Revenue raising capacities --- Revenue sources --- State governments --- Structural reforms --- Subnational Economic Development --- Tax --- Tax base --- Tax bases --- Tax collections

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This paper proposes that, to increase the efficiency of public spending in oil-rich economies, some or all of the oil revenues be transferred to citizens, and fiscal instruments such as taxation be used to finance public expenditures. The authors develop the case as follows. First, they confirm the well-known result that public-expenditure efficiency is lower in oil-rich countries compared with other developing countries. Second, they show that this efficiency gap is associated with differences in accountability to citizens of government's spending decisions. They find that various measures of accountability are systematically weaker in oil-rich countries. They attribute this difference to the fact that oil revenues typically accrue directly to the government, unlike tax revenues, which pass through the hands of citizens. Third, they show that, controlling for a number of factors, accountability is stronger in countries that rely more on direct taxation to finance public spending. They conclude that accountability, and hence public expenditure efficiency, can be increased by transferring oil revenues to citizens and then taxing them to finance public spending. The paper reviews existing schemes that redistribute oil revenues to the population, such as the Alaska Citizen Fund, to assess the feasibility of a modest proposal in African countries. The authors conclude that, while it may be difficult to implement such a proposal in existing oil producers, there is scope for introducing it in some of Africa's new oil producers.

Central government --- Debt Markets --- Expenditure control systems --- Expenditure Efficiency --- Expenditure per Capita --- Finance and Financial Sector Development --- Governance --- Macroeconomic stability --- Macroeconomics and Economic Growth --- Medium-term expenditure --- National Governance --- Policy recommendations --- Public budgets --- Public Expenditure --- Public expenditures --- Public Sector Development --- Public Sector Economics --- Public Sector Expenditure Policy --- Public spending --- Redistribution --- Revenue collection --- Subnational Economic Development --- Tax --- Tax administration --- Tax administration capacity --- Tax base --- Tax policy --- Tax revenues --- Taxation

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May 2000 - The literature on privatization has overlooked how the tax status of the company to be privatized will affect the firm's, and the country's, financial transition. Privatization has been a popular strategy for improving efficiency in both market and transition economies. The literature on privatization includes broad discussions of pricing techniques but overlooks tax issues. In reality, a state-owned company loses its privilege of paying no taxes once it is privatized. This change in tax status would certainly complicate the financial transition of a newly privatized company, affect industrywide economic efficiency, and change the revenue pattern of governments. Using Ontario Hydro and the Canadian tax regime as examples, Mintz, Chen, and Zorotheos provide policymakers with a checklist on tax issues under privatization. Their main observations: The tax status of the company to be privatized must be considered in analyzing the firm's financial transition; The economic efficiency targeted by privatization may depend partly on the tax regime for a particular industry; Privatization affects government revenue through the revenue-sharing structure determined by intergovernmental fiscal relationships and cross-border tax arrangements. Time is a factor in tax and transition issues. At the time of privatization, for example, how are assets to be valued for calculating capital gains and cost deductions, for tax purposes? Are the assets transferred to the new owners at fair market value, book value, or at cost, for tax purposes? How should heavy debt loads be treated? Ontario Hydro will not be privatized but it will become taxable. How the taxes will be paid will depend on how the transition is treated. Tax policy will be a key determinant of the industry's future development. This paper - a product of the Governance, Regulation, and Finance Division, World Bank Institute - is part of a larger effort in the institute to increase understanding of infrastructure regulation.

Capital Gains Taxes --- Company Taxes --- Corporate Income Tax --- Corporate Income Taxes --- Debt Markets --- Deductions --- Economic Theory and Research --- Emerging Markets --- Finance and Financial Sector Development --- Income Tax --- Investment and Investment Climate --- Law and Development --- Macroeconomics and Economic Growth --- Private Sector Development --- Property Taxes --- Tax --- Tax Base --- Tax Benefits --- Tax Credits --- Tax Incentives --- Tax Law --- Tax Liabilities --- Tax Liability --- Tax Policies --- Tax Policy --- Tax Revenue --- Taxable Income --- Taxation and Subsidies --- Taxes --- Taxpayers

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Excise taxes on alcohol and tobacco have long been a dependable and significant revenue source in many countries. More recently, considerable attention has been paid to the way in which such taxes may also be used to attain public health objectives by reducing the consumption of products with adverse health and social impacts. Some have gone further and argued that explicitly earmarking excise taxes on alcohol and tobacco to finance public health expenditures-marrying sin and virtue as it were-will make increasing such taxes more politically acceptable and provide the funding needed to increase such expenditures, especially for the poor. The basic idea-tax "bads" and do "good" with the proceeds-is simple and appealing. But designing and implementing good "sin" taxes is a surprisingly complex task. Earmarking revenues from such taxes for health expenditures may also sound good and be a useful selling point for new taxes. However, such earmarking raises difficult issues with respect to budgetary rigidity and political accountability. This note explores these and other issues that lurk beneath the surface of the attractive concept of using increased sin excises on alcohol and tobacco to finance "virtuous" social spending on public health.

Accounting --- Added tax --- Addiction --- Aged --- Alcohol consumption --- Alcohol taxation --- Alcohol taxes --- Alcoholism --- Alternative minimum tax --- Children --- Crime --- Debt markets --- Differential taxation --- Earmarked tax --- Economic analysis --- Economic development --- Economic efficiency --- Economic theory & research --- Effective tax rates --- Equity --- Evasion --- Exchange --- Excise tax --- Exercises --- Expenditure --- Externalities --- Families --- Finance --- Finance and financial sector development --- Gambling --- Good --- Goods --- Governments --- Health --- Health care --- Health effects --- Health monitoring & evaluation --- Health outcomes --- Health policy --- Health promotion --- Health spending --- Health, nutrition and population --- Implementation --- Indirect taxation --- Inflation --- International bank --- Intervention --- Isolation --- Knowledge --- Labor --- Laws --- Levy --- Local finance --- Local governments --- Macroeconomic conditions --- Macroeconomics and economic growth --- Management --- Market --- Marketing --- Nutrition --- Passive smoking --- People --- Per --- Product taxes --- Psychology --- Public --- Public economics --- Public expenditures --- Public funds --- Public health --- Public revenues --- Regressive taxes --- Regulation --- Revenue --- Revenue sources --- Risks --- Sales taxes --- Services --- Sin tax --- Sin' tax --- Sin' taxes --- Smokers --- Smoking --- Social policy --- Social research --- Social welfare --- Spending --- Stress --- Tax --- Tax administration --- Tax base --- Tax burdens --- Tax changes --- Tax competition --- Tax evasion --- Tax incidence --- Tax increases --- Tax law --- Tax policy --- Tax rate --- Tax receipts --- Tax reduction --- Tax reform --- Tax revenue --- Tax structures --- Tax system --- Taxation --- Taxation & subsidies --- Taxes --- Tobacco tax --- Transparency --- Uniform taxes --- Use taxes --- Value added tax --- Weight