1st Edition

Taxation in a Low-Income Economy The case of Mozambique

Edited By Channing Arndt, Finn Tarp Copyright 2009
    408 Pages 42 B/W Illustrations
    by Routledge

    408 Pages 42 B/W Illustrations
    by Routledge

    This volume contains a stimulating collection of analytical studies focusing on taxation in Mozambique. It tells a compelling story about tax systems in a low income economy increasingly integrated into the world trading system, but very much dependent on foreign trade taxes and international development assistance.

    Key issues covered include:


    • A better understanding of the historical background of tax reforms in a representative African economy (Mozambique) along with an assessment of taxation performance in a comparative perspective.
    • Insights into the practice and implications of tax policy, both from the perspective of the consumer and the firm level.
    • Discussion of the existing institutional set up in which tax policy and its enforcement operate and analyses of current tax practices.
    • Taxation themes at the border and at domestic level, which are typical for low-income economies, characterized by a high degree of reliance on foreign trade taxes.


    This volume is meant as a guide for developing country government officials and professional aid practitioners as well as academics, researchers and tax policy analysts working in the development field. It will also be of interest to students of development with a special interest in public finance issues in poor countries and how to improve policy-effectiveness, including tax policy, in a developing country setting.

    Introduction  1. Taxation in retrospect  2. Household Survey Evidence  3. Enterprise Survey Evidence  4. Comparative Perspective  5. Institutional Design  6. VAT and External Aid  7. Macroeconomic Modelling: Process and Practice  8. Forecast Quality  9. Transmission of Prices From the Border to Domestic Markets  10. Empirics of Evasion  11. Mozambique and Regional Integration  12. Trade Policy Reform and Missing Revenue  13. Taxation and the Cost of Capital  14. Fiscal Treatment of Mega-Projects  15. Prospects for an Electricity Tax  16. VAT and Economy-Wide Modelling


    Channing Arndt is Principal Economist for The Ministry of Planning and Development in Mozambique and Finn Tarp is Professor of Development Economics at the University of Copenhagen in Denmark