Tax reform in developing countries, Volume 235 by Wayne R. Thirsk

By Wayne R. Thirsk

Tax Reform in constructing international locations conscientiously examines the event of 8 constructing international locations that experience passed through -- and in a few cases are nonetheless present process -- major and entire tax reform. The international locations are Bolivia, Colombia, Indonesia, Jamaica, Korea, Mexico, Morocco, and Turkey. It attracts on their stories to discover classes discovered and to determine how they are utilized to different nations at the highway to tax reform. equivalent recognition is given to the method of tax reform, the way it is carried out, and the substance or result of reform efforts. all through, the focal point is at the sensible instead of the theoretical facets of tax reform.

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In some cases measurements of marginal effective tax rates (METRS) have been used as a diagnostic tool in determining either the efficiency attributes of various Page 11 reforms or the pattern of prereform investment distortions. The METR tries to take account of all investment-related taxes and tax provisions in estimating how much of a marginal investment's before-tax return is absorbed by taxes. 4 According to this approach, the efficiency goal of tax reform requires a reduction in the dispersion of METRS across different sectors and investors in the economy while a smaller aggregate METR indicates success in reducing tax-induced distortions in the intertemporal allocation of resources.

The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. A. Wayne Thirsk is a director with the Barents Group, KPMG. Previously, he was professor of economics at the University of Waterloo, Canada, and a member of the World Bank's Public Economics Division.

McLure, Jr. C. Wayne Thirsk Director, Barents Group LLC, Kiev, Ukraine George Zodrow Professor and Chair, Department of Economics, Rice University, Houston, Texas Affiliations as of July 1997. Page 1 1 Overview: The Substance and Process of Tax Reform in Eight Developing Countries Wayne Thirsk Beginning in the 1970s a number of developing countries tried to radically reform their tax systems. What can we learn from these experiences with tax reform? How can any lessons learned be made useful to other countries also on the road to tax reform?

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