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The Tax That Failed: The VAT in Niger
Author(s) -
Barlow Robin,
Snyder Wayne
Publication year - 1994
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/1540-5850.01013
Subject(s) - sophistication , value added tax , revenue , business , tax reform , order (exchange) , tax revenue , public economics , indirect tax , ad valorem tax , economic policy , economics , finance , social science , sociology
The value‐added tax (VAT) requires considerable sophistication on the part of both the taxpayers and the tax authorities in order to function effectively; not all countries meet this criteria. After Niger implemented the VAT in 1986, instead of realizing an increase in tax revenue it witnessed a decline, creating a major budget crisis. This article discusses why the VAT was an inappropriate choice for Niger, analyzes the reasons for the decline in tax revenue, and proposes alternative policies consistent with the administrative capacity of the Niger government and the existing socioeconomic environment.