TAX ADVICE TO DEVELOPING-COUNTRIES - AN HISTORICAL SURVEY

The tax policy advice given to developing countries by foreign experts has been influenced by changing public finance doctrines, development theory and policy, and practices and debates in industrial countries. Current tendencies include less emphasis than formerly on taxation to mobilize savings in accordance with a national plan, to reduce inequality, and to influence resource allocation by special incentives. Governments are advised to avoid interfering with market-directed allocations of resources, high and progressive income tax rates, high import duties, and export taxes. A value-added tax is recommended for middle-income countries.