Assessing the effects of combating illicit financial flows on domestic tax revenue mobilization in developing countries - HAL-SHS - Sciences de l'Homme et de la Société Access content directly
Preprints, Working Papers, ... Year : 2019

Assessing the effects of combating illicit financial flows on domestic tax revenue mobilization in developing countries

Abstract

Using propensity score matching, this paper assesses the effects of tackling illicit financial flows (IFFs) on domestic tax revenue mobilization in developing countries. It uses data on countries’ compliance with Financial Action Task Force (FATF) Recommendations as treatment variable and involves 67 developing countries around the world. We find that countries which comply with FATF Recommendations (Cooperatives countries) record higher values of domestic tax revenue in comparison with those which do not comply with those Recommendations (Non-cooperatives countries). Otherwise, Cooperatives countries outperform Non-cooperatives countries in terms of domestic tax revenue mobilization. More interestingly, the extent of this adverse impact depends on tax structure: goods and services taxes are more affected, followed by VAT and excise taxes. Our results suggest that developing countries could mobilize more domestic tax revenue by implementing policies to curtail IFFs. Moreover, they should establish sound institutions.
Fichier principal
Vignette du fichier
Combes et al 2019-7 à PUBLIER OK.pdf (2.38 Mo) Télécharger le fichier
Origin Files produced by the author(s)
Loading...

Dates and versions

halshs-02019073 , version 1 (14-02-2019)

Identifiers

  • HAL Id : halshs-02019073 , version 1

Cite

Jean-Louis Combes, Alexandru Minea, Pegdéwendé Nestor Sawadogo. Assessing the effects of combating illicit financial flows on domestic tax revenue mobilization in developing countries. 2019. ⟨halshs-02019073⟩
643 View
991 Download

Share

Gmail Mastodon Facebook X LinkedIn More