Five country cases illustrate how best to improve tax collection
A typical developing ec onomy collects
just 15 percent of GDP in taxes, com-
pared with the 40 percent collected
by a typical adva nced economy. e
ability to collect ta xes is central to a countr y’s
capacity to ﬁnance soci al services such as hea lth and
education, critical infra structure such as electricity
and roads, and other public goods. Considering t he
vast needs of poor countries, t his low level of tax
collection is putting economic development at risk.
How can policyma kers tackle thi s challenge?
A look at successful reforms between 2004 and
2015 in ﬁve low-income and emerging market
economies—which achieved some of the largest
revenue gains after t ax reform—oﬀers some
answers. e experiences of t his diverse set of
countries—Cambodia, Georgia, Guyana, Liberia,
and Ukraine —show that, rega rdless of the con-
straints they face, countries can st rengthen their
capacity to collect ta x revenue by pursuing reform
strategies with cer tain distinct features. We focus
here mainly on Georgia. By ana lyzing what worked
in that country we c an draw lessons for what strat-
egies other countries should consider.
Georgia oﬀers a strik ing example of successful t ax
revenue reform. Following the collapse of the Soviet
18 FINANCE & DEVELOPMENT | March 2018
the tax base.