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

  title={Tax Farming: A Radical Solution for Developing Country Tax Problems?},
  author={Peter Stella},
  journal={Development Economics},
  • P. Stella
  • Published 1 September 1992
  • Economics
  • Development Economics
Ineffective tax administration is a chronic problem in many developing countries. A radical solution is tax farming, whereby the right to collect certain taxes is auctioned off to private sector collectors. Proponents argue that it minimizes administrative costs and results in more efficient collection. The purported gains are largely illusory, however. Because the system leads to overzealous collection, a government would have to expend considerable resources on monitoring private tax… 

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