1.4 Tax effort - Dominik Naeher
Channel: UNU-WIDER
Date: 2023-09-25

It is well established that low- and middle-income countries are expected to raise more in tax revenues to fund their development needs. How much tax revenue must be raised, however, remains unclear. Research on tax effort across countries—defined as the ratio of actual tax collection to tax potential (the amount of tax revenue a country can collect given its structural characteristics)—sheds light on this question. The research is extensive, with different sources of data, empirical strategies and modeling assumptions being employed.

This session aims to discuss the political economy of tax effort estimates, comparing various estimates and how to interpret them. The focus will be on linking modeling assumptions to the political economy of revenue mobilization across countries and understanding what we can—and crucially cannot—take away from tax effort estimates.