弥合差距：南亚的收入动员（英）

Bridging the Gap Revenue Mobilization in South Asia Hagen KruseFranziska OhnsorgeGabriel TourekZoe Leiyu Xie South Asia RegionOffice of the Chief EconomistApril 2025 Policy Research Working Paper11104 Abstract in five of the region’s eight countries larger than in theaverage EMDE. Even after controlling for country char-acteristics, such as widespread informal economic activityoutside the tax net and large agriculture sectors, sizable taxgaps remain, suggesting the need for improved tax policyand administration. The paper discusses and provides evi-dence from international experience with reforms to raisegovernment revenues. This paper examines tax revenue shortfalls in South Asiancountries. On average during 2019–23, South Asian reve-nues totaled 18 percent of GDP—well below the average 24percent among emerging market and developing economies(EMDEs). Econometric estimates from stochastic frontieranalysis, which control for tax rates and the size of potentialtax bases, suggest that tax revenues in the region are 1 to 7percentage points of GDP below potential, with shortfalls This paper is a product of the Office of the Chief Economist, South Asia Region. It is part of a larger effort by the WorldBank to provide open access to its research and make a contribution to development policy discussions around the world.Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may becontacted at lxie@worldbank.org. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Bridging the Gap: Revenue Mobilization in South Asia Hagen Kruse, Franziska Ohnsorge, Gabriel Tourek, and Zoe Leiyu Xie * Keywords:Tax revenues, stochastic frontier analysis, tax administration, South Asia JEL classification:H23, H24, H25, H26, O23 1.Introduction South Asian countries face significant fiscal challenges, in particular large debt and debt-serviceburdens.1At end-2023, gross government debt averaged 77 percent of GDP in South Asia,compared with an emerging market and developing economy (EMDE) average of 64 percent ofGDP. Partly as a result, South Asian governments spent 26 percent of their revenues on interestpayments—well above the EMDE average of 9 percent. Heavy debt and debt-service burdensconstrain funding capability for basic government services. All South Asian countries exceptMaldives spend less on healthcare than would be expected based on their per capita incomes,and three of the four South Asian countries with the highest interest burdens spend less than halfof the EMDE averageon education (relative to GDP)—and far less than would be expected basedon their per capita incomes(World Bank 2025a). At the root of South Asia’s fiscal challenges are low revenues. During 2019–23, South Asiangovernments’ revenues excluding grants averaged 18 percent of GDP, the lowest among all EMDEregions and well below the EMDE average of 24 percent of GDP. All countries in the region otherthan Maldives have tax revenues that are 2–18 percentage points of GDP less than the EMDEaverage. This paperfirst presents key stylized facts of South Asia’s revenue collection, then quantifies thesize of tax revenue shortfalls in South Asian countries using stochastic frontier analysis.In contrastto the literature(for example, Benitez et al. 2023; Garg, Goyal, andPal 2017;McNabb, Danquah,and Tagem 2021),we conduct the estimation in two steps and for each main tax category.Thefirst-step estimation considers only tax rate and potential tax base as input for revenue collection,and country characteristics that correlate with revenue collection are only introduced in thesecond step.The two-step approach is applied to each tax category to identify specific shortfallsand gapsand guide policy recommendations. In the first step, w e find that South Asian countries’ tax revenues are 1–7 percentage points ofGDP below the estimated potential implied by their tax rates and potential tax bases. Five of theregion’s eight countries have tax revenue shortfalls above 5 percentage points ofGDP, muchhigher than the EMDE average of 3 percentage points. Revenue shortfalls are particularlypronounced for consumption taxes but are also sizable for personal income taxes and, in thelarger economies, corporate income taxes. Taking into account countrycharacteristicsin the second steponly accountsfor a small port