How much revenue can lower-income countries raise? Recent years have seen some highly ambitious estimates, including an IMF paper that suggested a potential of nine additional percentage points of GDP. But thinking of this as achievable in the medium term is unrealistic: history suggests that a year-on-year increase of 0.5 per cent of GDP is already very ambitious. We highlight that overly zealous tax targets can be actively counterproductive to tax administration and suggest five concrete ways to set better targets.
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