Effective Mechanisms for Raising Tax Revenues
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Publication Type:
Publisher:
Asian Development Bank (ADB)
Publication:
July 2025
This paper explores why raising tax rates may not yield intended results unless certain conditions are met.
The design of tax systems determines the efficiency and equity of the mechanism for generating expected revenues. The determinants of tax revenue are multifaceted, with the tax base and tax rate playing pivotal roles. The tax base encompasses the total economic activities or income subject to taxation, which influence revenue outcomes.
This paper explores why raising tax rates may not yield intended results unless certain conditions are met. The findings highlight the importance of a balanced approach in tax policy design to achieve revenue goals while maintaining economic efficiency.
Contents
- Introduction
- Theoretical Analysis
- Empirical Analysis
- Conclusions
