The practice of mobilizing one’s revenue significantly, in order to create room for social spending and investing in capital relating to human and physical, is called revenue mobilization. It is a practice mostly found in developing and emerging economies where people want to grow bigger in terms of finance. The composition of taxes changed significantly while the tax revenues remained stable with a GDP ratio of 13%, in the last two decades. If the government wants to increase tax to GDP ratio and wants to grow inclusively, they definitely need to reevaluate their tax administration process. Such developing economies usually follow the traditional taxation method that focus only on domestic taxation without paying heed to the international taxation changes and credit risks.

Reference:

Chami, Mr Ralph, Elorm Darkey, and Mr Oral Williams. A Time to Build: Does TA Matter for Revenue Mobilization?. International Monetary Fund, 2021.