implications relating to tax structures following trade liberalisation and the eventual higher dollar lost in trade tax revenue, while lower-income countries at best. We find that trade liberalization episodes led to larger and longer-lived decreases in total tax revenues in developing countries since the 1970s than in rich 5 In addition, with liberalization,. 4 Import taxes constituted 85 percent of trade tax revenues in 1990. 5 IMF 2011; Tanzi and Zee 2001. The tax revenue comes from direct taxes, indirect taxes and international trade taxes. The non-tax revenue comes from grants, income and fees, and divestiture of
18 Feb 2017 This paper tries to find out the implications of trade liberalization on international trade tax revenues and its macroeconomic implication on
trade tax revenue in developing countries and examine whether this impact is conditioned by the level of trade liberalization; (b) explore the empirical nexus. * The measure for openness is exports and imports as a share of GDP; inequality is measured by share of pre-tax national income of the top one percent. 30 This In the mid 1990s tariff revenue exceeded 30 per cent of the government's total tax revenue in more than 25 developing countries whereas in high-income countries 12 Jun 2002 They effectively imply that tax revenues are just sucked out of the economy—they are not taxes on specific items like capital or labor income. From 7 May 2014 Government revenue implications of trade liberalization in Africa: by Prof. Akpan H.Ekpo University of Uyo, Akwa Ibom State Nigeria
The fare of revenue impact of trade liberalization seems to be considerable in developing countries because for most of them the share of trade tax in total tax revenue is high. In this regards, trade liberalization may possibly lead to changes in the tax structure.
trade tax revenues are affected by trade liberalization, and on identifying (arguably something of a chimera) a revenue-maximizing tariff rate, beyond which trade tax revenues fall with further tariff cuts. With the public finances of many developing and emerging market countries still heavily dependent on trade tax revenues, further trade liberalization may be hindered unless they are able to develop alternative sources of revenue. The IMF study concluded that trade liberalization could be tailored to avoid adverse consequences. Nevertheless, in the long term, trade liberalization inevitably reduces the total share of revenue derived from trade taxes. To ensure that revenue is maintained, domestic tax reforms must accompany trade liberalization. The apparent contradiction between trade liberalization and continuing high trade tax revenue raises the important question of how, precisely, the one affects the other. Although policymakers generally recognize the long-term benefits of trade liberalization, some have argued for at least a slower pace, in part because of revenue concerns. Data on total domestic tax revenue, VAT, corporate income tax, personal income tax, and trade tax revenue are taken from the IMF’s Government Financial Statistics (GFS) database, and IMF country documents, as discussed in Sect. Standard theory predicts that, in the long term, trade liberalization leads to an increase in allocative efficiency and hence an increase of fiscal revenues. This prediction is based on the idea that overall economic surplus determines the size of the tax base and an improvement in allocative efficiency increases surplus. The findings indicated that trade openness positively affect trade tax revenue both in the long run and short run.
Trade liberalisation carries substantial risks that tax revenue among other economic problems
trade tax revenues are affected by trade liberalization, and on identifying (arguably something of a chimera) a revenue-maximizing tariff rate, beyond which trade tax revenues fall with further tariff cuts. With the public finances of many developing and emerging market countries still heavily dependent on trade tax revenues, further trade liberalization may be hindered unless they are able to develop alternative sources of revenue. The IMF study concluded that trade liberalization could be tailored to avoid adverse consequences. Nevertheless, in the long term, trade liberalization inevitably reduces the total share of revenue derived from trade taxes. To ensure that revenue is maintained, domestic tax reforms must accompany trade liberalization.
In the mid 1990s tariff revenue exceeded 30 per cent of the government's total tax revenue in more than 25 developing countries whereas in high-income countries
Liberalizing trade has proven highly challenging for some low-income countries, as a large share of their tax extraction derives from trade taxation. 4 Aug 2012 In low-income countries they represented a third of total tax revenue; in high- income countries, less than 2%. What's more, revenues from trade 18 Feb 2017 This paper tries to find out the implications of trade liberalization on international trade tax revenues and its macroeconomic implication on