how do we improve the quality of tax data for research purposes?
TRANSCRIPT
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How do we Improve the Quality of Tax Data for Research Purposes?
WilsonPrichardInterna(onalCenterforTaxandDevelopment
TiangbohoSanogo
UniversityofAuvergne,Clermont-Ferrand,FranceUniversityFelixHouphouet-Boigny,Côted’Ivoire
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The ChallengeHighqualitytaxdataforresearchpurposescanbeacri(caltool:• Fortaxadministra(ontoassess,andimprove,theirperformance
• Forresearcherstoanalyzetaxperformance,andtheconnec(onsbetweentaxandbroaddevelopmentoutcomes,inordertoinformpolicyandprac(ce
However,availabletaxdatahashistoricallybeenincomplete,andoIenhighlyinaccurate,andtheICTDhasinvestedheavilyinseekingtoaddressthisgap.
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Overview
1. TheICTDGovernmentRevenueDataset
2. Improvingtheuseofdata–andnextsteps
3. StrengtheningSub-Na(onalTaxData
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THE ICTD GRD
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The ICTD GRD - Motivation• Ini(atedin2010,andlaunchedin2014,respondstomajorgapsandanaly(calinaccuraciesinexis(nginterna(onaldatasets
• Constructedbymergingdatafromallmajorinterna(onaldatasetsandIMFAr(cleIVreports
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The ICTD GRD – DataTheICTDGRDdataisnotablerela(vetoothersourcesinfivemajorways:
1. Muchimproveddatacoverage,par(cularlyfordevelopingcountries
2. Eliminatesimportanterrorsandinaccuracies,includingrelatedtoGDPdata
3. Moresystema(ctreatmentofrevenuesfromnaturalresources
4. Systema(ca\en(ontodifferencesbetweencentralizedandfederalstates
5. Greatertransparencythanotherresearcherdatasets
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The ICTD GRD - ImpactTheICTDGRDhasalreadyhadademonstratedimpactonresearchfindingsandprac(ce:1. Thedatasetisnowaleadingdatasetfortaxresearchers,
andexpanding§ Over5000downloadsoverpastthreemonths§ MajorresearchconferenceatUNU-WIDER
2. Earlyfindingsprovideevidencethatemployingimproveddatayieldsnewandbe\erresearchresults
3. Providesaclearerandmorereliablepictureofcross-countryandwithincountrytrendsforpolicymakers
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Recent Data Initiatives
1. OECD/ATAFdatacollec(onforAfrica:Importantini(a(vefordeepeningdataqualityinpar(cipa(ngcountries
2. IMFWoRLDdataset:Majorstepforwardindatatransparency
3. IMFworkonnaturalresourcerevenues:Acri(calini(a(veforthefuture
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Sustainability and AdoptionResearchershavelongsoughttoimprovetaxdata–butsustainability,andwideadop(on,havebeenkeybarriers.1. Shortterm:TheICTDhascompletedafirst
updateofthedata,andac(velypublicizedthedata,whichisnowinwideuse
2. Longterm:WehaveenteredintoapartnershipwithUNU-WIDERwhowillhost,andconsistentlyupdate,thedata,inpartnershipwiththeICTD.
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Next Steps – Data UseKnowingthedatabeingusedforresearch,andusingitappropriately
1. Understandingwhatthenumberscapture,andtheirimplica(ons,cri(caltointerpre(ngresultsandappropriateanalysis
2. Cau(oninusingtaxra(os,andusingcross-countrycomparisonsappropriately• ProblemswithGDPdatacanmakecross-country
comparisonsmisleading• Evalua(ngtaxperformancedependsonrevenue
collected,butalsounderstandingthetaxbase
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Next Steps – Resource Revenues
TheICTDGRDa\emptstodis(nguishresourcerevenuesfromothertaxrevenue,butbe\erdis(nc(onsareneeded
§ Clearerdefini(ons§ Be\er,andpubliclyavailable,data§ IMFini(a(veonthisareaholdssignificantpoten(al
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Next Steps – Deeper DataWhileICTDGRDtellsushowmuchrevenueiscollected,understandingoftaxsystemsalsorequiresunderstandofwhatexactlyispaid,bywho,andrela(vetowhatispossible
§ Howistaxperformancerela(vetopoten(al?§ Howfairisthetaxsystemintermsofoverallstructure?
§ Howcompleteiscompliance,ordosomegroupsavoidpayment?Whatisthestructureofthetaxbase?
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Local Government Dataset in Cote D’Ivoire
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Overview• TheCôted’IvoireLGRdataaimsatfillingthegaprela(vetoabsenceofdatasetonlocalgovernments’revenue;
• This data represents the most complete and most accurate dataset on localgovernmentrevenue,covering12yearsfor90%ofthe196exis(ngmunicipali(es;
• Itisanimportanttoolforsta(s(calanalysisandtaxpolicyreforms;• However,thedatasetsuffersfromtwomajorlimita(ons:Missingdataremainandsomevariablesneedtobedisaggregated;
• Thereisaneedfortraininglocaladministra(onsandtosetupelectronicsystemfordatacollec(on;
• Itisvaluabletoundertakesuchprojectindevelopingcountrieswherenotexis(ng.
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Outline
1. Mo(va(ons
2. Methodology
3. Outputs
4. Limita(ons
5. Usingthedataandlessons
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Motivations1. Crucialneedtoundertakeresearchtodeepenprocessesof
state-building:§ Localrevenuedatasetallowtoundertakeresearchthatfoster
administra(vereforms
2. Absenceofaggregated,reliabledatacoveringallmunicipali(esoveralongperiod.§ Theexis(ngna(onalsourcessufferfromlimita(ons:Inconsistency
withthedefini(onofvariablesbetweenmunicipali(es,presenceofoutliers,significanterrors
3. Acomprehensivedatasetcontributestowidenthedebateonlocalgovernments'responsibili(es.
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Methodology - AccessContac4ngthedifferentsourcesofdataanddealingwithconstraintsofgainingaccess
§ Sendingformalle\ersforclearexplana(ons;§ Organizingseveralroundsofmee(ngs;§ Interviewingeightselectedmunicipali(es.
• DepartmentinchargeofDecentraliza(onandLocalDevelopment,MinistryofInterior(Datarequested:Theadministra(veaccountsformunicipali(es(localtaxandnon-taxrevenuesandexpenditures)
• MinistryofEconomyandFinance(Datarequested:Thena(onalaccountforlocalgovernmentsgrants)
• Financialservicesof8municipali(es(Datarequested:Localaccounts)(Bouake(Centre);Korhogo(North),Daloa(West);Kanakono(North);Abobo,Yopougon,Plateau(South),Tengrela(North)
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Methodology –Data Cleaning
Makingsuitableforresearch(Datacleaning)
§ Manualdataentering§ Dealingwithoutliers,possibleerrorsoftranscrip(onorrepor(ng
§ Runningsomestandardsta(s(caltests§ Addingnoteforclearexplana(on§ Findingallabruptchangesandtrea(ng§ Mergingdataformthedifferentsources
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Outputs (Data)
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Outputs (Data)
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Limitations
1. Missingdataremain
2. Outliersduetodiscre(onarydecisionsformcentralgovernment
3. Needtodisaggregatesomevariables
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Using the Data and LessonsExample• SanogoandMoummi(2015).Localgovernmenttaxa(on
andaccesstobasicservicesinCôted’Ivoire,CERDI,Workingpaper.
Lessons• Needfortraininglocaladministra(onsandtosetupelectronicsystemfordatacollec(on;• Needtoupdatetheexis(ngdata(from2012-2015);• Needtoextendthedata(1990to2000);• Valuabletoundertakesuchworkindevelopingcountrieswherenotexis(ng.
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Thank you for your a-ention!
Commentsandsugges(onsarehighlyappreciated