ABSTRACT
This chapter addresses two issues related to the design and administration of the fiscal provisions that affect the competitiveness of a country in the production of manufactured exports. The first issue is how to design a system that allows exporters to sell their output free of the burden of domestic sales taxes. The second issue is how to relieve exporters from the burden of import tariffs levied on inputs used in the production of exports. The chapter identifies the elements of the administrative systems needed to deliver effectively value-added tax (VAT) input tax credit refunds and to eliminate the burden of import duties on inputs used in exports. Removing duties on imported inputs for use in the production of exports is very important for developing countries to be able to compete in selling their products in international markets. Development of the mechanisms and institutional arrangements to implement this policy is equally essential for a successful export promotion and economic growth.
