Overview
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Policy Brief
Few people like to pay tax and even fewer like to see their existing tax burdens rise further. Many governments have thus found that the most propitious time for tax reform is when the state public finances allows an overall reduction in taxes or, failing this, a revenue-neutral reform that allows some compensating cuts for politically sensitive groups of taxpayers. At present, many countries are not in such a fortunate position. The need to undertake fiscal consolidation strategies over the medium term leaves little room for manoeuvre to finance any tax reductions. In many cases, countries’ assessment of the appropriate balance between cutting public expenditure and raising taxes means that tax revenues will need to be increased.
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