São Tomé and Príncipe: Domestic Tax System and Tax Revenue Potential, Issues 2009-2215São Tomé and Príncipe is very open and highly depends on imports resulting in high indirect tax revenue. At the same time, the production and export base are very narrow, leaving the authorities with a small domestic tax base. For these reasons, the country compares unfavorably with neighboring economies and other island countries, in terms of domestic revenue in percent of GDP. The paper describes the domestic tax system in São Tomé and Príncipe and uses cross-country empirical analysis to reach a benchmark tax potential for the country. The paper reaches the conclusion that whether São Tomé and Príncipe becomes an oil producer or not, it is more sustainable for it to rely on non-oil domestic revenue-a less volatile and less exhaustible resource-to finance current expenditures. To meet the country's increasing development and social objectives, the authorities need to mobilize sufficient domestic resources. The paper offers a number of fiscal reforms to reach this goal, including implementation of the new tax laws, reduction of exemptions, tax system reforms, and improvement of the tax administration. |
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São Tomé and Príncipe: Domestic Tax System and Tax Revenue Potential Nisreen H. Farhan Limited preview - 2009 |
São tomé and Príncipe: Domestic Tax System and Tax Revenue Potential Nisreen H. Farhan No preview available - 2009 |
Common terms and phrases
Adjusted R-squared S.E. Agriculture output Analysis of Tax Appendix assessment average Burkina Faso Cape Verde Coefficient Std compared country's tax Cross-Section Analysis customs denotes statistical significance dependence on imports domestic resources Dummy ease of paying Error t-Statistic Prob excise duties excise tax Exemptions expect higher tax fiscal Gambia Ghana higher tax revenue import duty improving income tax indirect taxes island economies Lesotho Madagascar Maldives Mauritius Millennium Challenge Corporation million dobra Mozambique Nature of Tax oil bonuses Papua New Guinea paying taxes pcGDP percent of GDP Potential Dependent Variable PPP per capita Príncipe's tax potential R-squared Adjusted R-squared reforms revenue in percent revenue performance S.E. of regression São Tomé sector stamps Sub-Saharan African countries surtax Table tariff tax administration tax base tax laws Tax Levied tax performance Tax Potential Dependent tax rate tax revenue levels tax system taxpayer Tomé & Príncipe Tomé and Príncipe Vanuatu vehicle World Bank