Acronyms/Glossary 4

I. Introduction 5

II. Stylized Facts and Analysis 9

  A. Revenue Performance and Tax Potential 9

  B. How Tax Policy Shapes Revenue, Equity and Efficiency 12

  C. Administrative Capacity as a Constraint on Revenue Mobilization 15

III. Selected Areas for Reform 21

  A. Strengthening VAT as a Core Revenue Instrument 22

  B. Rationalizing Corporate Income Tax Incentives to Protect the Tax Base 27

  C. Unlocking the Revenue Potential of Recurrent Property Taxation 31

  D. Using Digitalization to Improve Tax Compliance and Service Delivery 34

  E. Building Public Trust to Strengthen Voluntary Compliance 39

IV. Conclusions 43

References 45