Trade Policy Reform and the Missing Revenue
Posted: 23 Jun 2008
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Trade Policy Reform and the Missing Revenue
Trade Policy Reform and the Missing Revenue
Date Written: January 2008
Abstract
In many African countries, large discrepancies exist between revenues implied by published tariff rates multiplied by estimated import volumes and actual receipts. We develop a stylised trade model where average and marginal tariff rates diverge and incorporate insights from this model into a computable general equilibrium model of an African economy (Mozambique) to study the implications of trade policy reform. Model simulations indicate that lowering tariff rates and reducing duty-free importation in a manner that maintains official revenue benefit nearly everyone. The main exception is those who benefited from duty-free imports in the base.
Keywords: D58, H26, O55
Suggested Citation: Suggested Citation