Tax Farming: A Radical Solution for Developing Country Tax Problems?

26 Pages Posted: 15 Feb 2006

Date Written: September 1992

Abstract

Systemic tax administration problems in many developing countries have led to a search for radical solutions. One such proposed solution is tax farming. Tax farming is a system wherein the right to collect taxes is auctioned off to the highest bidder. An analysis of the historical experience with tax farming shows that its purported administrative efficiency is largely illusory. While certain aspects of tax administration may be suitable for privatization, the classic form of tax farming would appear to have little attraction for a modern state concerned with justice and equity.

JEL Classification: H86, K42, L33

Suggested Citation

Stella, Peter, Tax Farming: A Radical Solution for Developing Country Tax Problems? (September 1992). IMF Working Paper No. 92/70, Available at SSRN: https://ssrn.com/abstract=884946

Peter Stella (Contact Author)

Central Bank Archaeology ( email )

Venice, FL
United States

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