ABSTRACT
There is an old adage that says that the only things certain in life are death and taxes. For transition countries, the evidence and experience since 1991 suggests otherwise. Loss-making enterprises that would normally exit if operating in a mature market environment have managed to survive through external forms of financial assistance. One form of this financial aid is late, in-kind or non-payment of taxes (of course, not exclusively to loss-making firms as the evidence in Chapter Four indicates). Taxes are suppose to be rigid (‘hard’) obligations, not ‘soft’, subject to negotiation. Likewise, tax liabilities are suppose to be parametric, not customised to individual taxpayers. Revenue erosion and lax payments discipline, manifesting itself in low revenue mobilisation, ineffective tax collection and widespread non-compliance, have been a problem in many TEs since the start of transition. This book examines the problem of tax payments discipline and collection in the context of the SBC and other legacies from the socialist era. Much of the literature on the revenue collapse in transition countries to date has focused on either economy-wide transitional phenomena (recession, unofficial economy) or taxpayers’ non-compliance (tax evasion, tax culture). In contrast, this monograph examines the problem from the position of the tax collector, that is, the state, and its ability and/or willingness to collect taxes.
