IMF Working Papers

Enhancing Tax Capacity: Revenue Gains from Strengthening Tax Administration

By Jean-Marc B. Atsebi, Nikolay Gueorguiev, Manabu Nose

October 24, 2025

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Format: Chicago

Jean-Marc B. Atsebi, Nikolay Gueorguiev, and Manabu Nose. "Enhancing Tax Capacity: Revenue Gains from Strengthening Tax Administration", IMF Working Papers 2025, 219 (2025), accessed October 25, 2025, https://doi.org/10.5089/9798229029827.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Building on previous studies, we propose a robust estimation strategy to uncover the causal effects of tax administration strength on tax revenue in 121 countries over the period 2014–2022. Our novel approach utilizes a unique expert survey to construct an Operational Strength Index of tax administration, using the International Survey on Revenue Administration (ISORA), and employs an instrumental variable strategy based on the IMF Fiscal Affairs Department’s Capacity Development programs. We find that strengthening tax administration significantly boosts tax revenue, particularly in emerging and developing economies, and especially in countries with lower levels of informality, stronger institutions, and higher financial development. These findings carry important policy implications for governments and development partners aiming to enhance tax administration capacity and strengthen public finances overall.

Subject: Econometric analysis, Estimation techniques, External debt, International Survey on Revenue Administration (ISORA), International trade, Labor, Labor force, Oil exports, Revenue administration, Revenue performance assessment, Social security contributions, Tax administration core functions, Taxes, Taxes on trade, Terms of trade

Keywords: Estimation techniques, International Survey on Revenue Administration (ISORA), ISORA, Labor force, Oil exports, Social security contributions, Tax Administration, Tax administration core functions, Tax Policy, Taxes on trade, Terms of trade

Publication Details

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