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Tax Effort and Tax Potential in Timor-Leste: Assessing Post-Pandemic Fiscal Challenges and Priorities

Tax Effort and Tax Potential in Timor-Leste: Assessing Post-Pandemic Fiscal Challenges and Priorities

Paperback

Investing & FinanceGeneral Law

ISBN10: 929270737X
ISBN13: 9789292707378
Publisher: Asian Development Bank
Published: Mar 30 2025
Pages: 58
Weight: 0.45
Height: 0.16 Width: 8.50 Depth: 11.00
Language: English
This report analyzes tax policy reforms needed in Timor-Leste to boost domestic revenue mobilization and help drive more inclusive and sustainable economic growth.

Timor-Leste, one of Southeast Asia's poorest countries, relies heavily on petroleum income to finance its large public expenditure envelope. As a result, the country remains vulnerable to revenue fluctuations which in turn contribute to macroeconomic volatility. This report concludes that a more diversified approach to domestic resource mobilization will reduce such volatility and provide more stability in government finances. To achieve this, it proposes a modern value-added tax is introduced alongside other tax administration reforms, and that these need to be complemented by more efficient public expenditure.

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