Low tax revenue collection limits the capacity of the state to provide public goods and invest in human capital, redistribute income, and insure against shocks. Although domestic revenue mobilization has increased in the past two decades, many low-income countries still collect less than 20 percent of their GDP in taxes, a level which is insufficient to address their citizens’ needs. In this Policy Research Talk on October 27, 2020, World Bank economist Pierre Bachas discussed the differences in tax structures across countries and sketched some of the frontiers of research in this area.
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