Policy Brief

Getting Targets Right: How Much Revenue can Lower-Income Countries Raise?

Policy Brief 6

How much revenue can lower-income countries raise? Recent years have seen some highly ambitious estimates, including an IMF paper that suggested a potential of 9 additional percentage points of GDP. But thinking of this as achievable in the medium term is unrealistic: history suggests that a year-on-year increase of 0.5 per cent of GDP is already very ambitious. We highlight that overly zealous tax targets can be actively counterproductive to tax administration and suggest five concrete ways to set better targets.

Authors

Max Gallien

Max Gallien is a Research Fellow at the ICTD. His research specialises in the politics of informal and illegal economies, the political economy of the Middle East and North Africa and development politics. He completed his PhD at the London School of Economics. Max co-leads the informality and taxation programme with Vanessa, as well as the ICTD’s capacity building programme.

Adrienne Lees

Adrienne Lees is a Doctoral Fellow at ICTD, working primarily on projects relating to tax administration and compliance, and on the DIGITAX programme. She has completed an ODI Fellowship in the Tax Policy Department at the Ministry of Finance, Planning and Economic Development in Uganda. Adrienne holds an MSc in Economics for Development from the University of Oxford and is completing her PhD in Economics at the University of Sussex.

Giulia Mascagni

Giulia Mascagni is a Research Fellow at the Institute of Development Studies and Executive Director of the ICTD. Her main area of work is taxation, but she also has research interest in public finance, evaluation of public policy, and aid effectiveness. She is an economist by training, holding a PhD in Economics from the University of Sussex. Her main geographical interest lies in African countries, with a particular focus on Ethiopia and Rwanda.
Download

Publication Details

Publisher: ICTD
Date: March 2024
Citation: Gallien, M., Lees, A., and Mascagni, G. (2024) ‘Getting Targets Right: How Much Revenue can Lower-Income Countries Raise?,’ ICTD Policy Brief 6, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.016