Managing the Reform Process

Managing the Reform Process

Approaches to Tax Reform • Public economics • Macroeconomic • Administrative • Political

The Process of Tax Reform • Policy formulation • Policy authorization • Policy implementation

Policy Authorization • Legislative independence? • Closed or open process?

Policy Formulation: Institutionalization • Better packaging • More flexibility • Better defense • Better control

Policy Formulation: Key Components • Information • Analysis • Planning

Policy Formulation: Location • Tax administration • Ministry of Finance • Other

Policy Formulation: Timing • Sporadic • Continuous

Example: Indonesia • Issue definition • Ownership • Timing • Scope

Example: Indonesia (2) • Administrative aspects • Political aspects

Example: Colombia • Gradualism • Duration • Education

Example: Transitional Countries • Initial conditions • Complementary reforms • Perspective • Policy and administration

Lessons from Developed Countries • Champion • Package • Visible benefits • Adequate discussion

Lessons from Developing Countries • Timing • Simplify • Sequencing • Scope

Lessons from Bank Experience • Systems view • Transition

Wisdom from the Fund • Clarity • Details • Incrementalism • Politics

The Key Questions • What • How • Who • When

The Main Lesson • Tax reform is mainly about politics