Domestic Revenue Mobilization in Guinea-Bissau

This paper quantifies Guinea-Bissau’s tax potential using a stochastic frontier model and investigates the underlying sources of untapped revenue.
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Volume/Issue: Volume 2025 Issue 109
Publication date: August 2025
ISBN: 9798229018869
$15.00
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Topics covered in this book

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Economics- Macroeconomics , Public Finance , Taxation - General , Domestic revenue mobilization , Tax reform , Tax capacity , Fiscal policy , Public debt , Sales tax , Resilience and Sustainability Facility , Personal income tax , Income tax systems , Corporate income tax , Tax administration core functions , Revenue mobilization , Value-added tax , Tax gap , Tax collection

Summary

This paper quantifies Guinea-Bissau’s tax potential using a stochastic frontier model and investigates the underlying sources of untapped revenue. Beyond benchmarking performance against structural peers, it tackles the complex drivers of low revenue mobilization, including high informality, administrative inefficiencies, a fragmented tax system, and weak enforcement. The analysis distinguishes between structural constraints and policy or institutional gaps, offering a nuanced diagnosis of where reforms can yield the greatest returns. It finds that Guinea-Bissau has significant scope to increase domestic revenue by broadening the tax base, enhancing compliance, and strengthening core tax functions. Targeted, sequenced reforms in administration and policy could help close the tax gap and support more sustainable, resilient public finances.