| Abstract: |
This paper reviews the evolution and current state of subnational taxation in
five large emerging countries: Brazil, Russia, India, China, and Nigeria –
BRIC plus one. As these case studies show, intergovernmental fiscal relations
in any country are inevitably both path-dependent and context-sensitive. In
India and Brazil, for example, subnational governments already have a
significant degree of fiscal autonomy in terms of being able to set some key
tax rates. In both countries, however, substantial attention still must be
paid to improving the general consumption taxes that are the main source of
regional government revenues as well as the property taxes on which local
governments mainly depend. Although Nigeria, like India and Brazil, is a
federation, its fiscal system depends so heavily on oil revenues that almost
all political attention has been focused on securing a bigger share of these
revenues. Both China and Russia have made a number of important changes in the
direction of centralizing rather than decentralizing effective control over
subnational taxes. In both countries the key issue is the extent to which
fiscal decentralization is to be accompanied by any significant political
decentralization. At the present time, in neither China nor Russia is it clear
that the central authorities are willing to permit subnational governments
much autonomy in this respect. |