ISSN: 2226-3624
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Sub-central government (SCG) funding arrangements, particularly tax sharing arrangements and intergovernmental grants, are often difficult to disentangle. Statistical databases, including Fiscal Network statistics, do not always provide coherent and comparable data on these arrangements. To overcome such data weaknesses, a test was applied on all tax sharing systems and intergovernmental grants. This test, using four criteria, helped to distinguish the various SCG revenue arrangements. Applying the four test criteria allowed drawing a coherent and comparable dividing line: between tax sharing arrangements and intergovernmental grants and, within tax sharing arrangements, between strict tax sharing and tax sharing. The study found that the dividing line between “tax sharing” and “intergovernmental grants”, as shown by data bases such as National Accounts or Revenue Statistics, remains unchanged for most countries. However, few Countries would have to reclassify some tax sharing as intergovernmental grants or vice versa.
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.C., A. U., .I., O. G., & Kalu, U. D. (2015). Finding the Dividing Line between Tax Sharing and Grants: A Cross Sectional Investigation. International Journal of Academic Research in Economics and Management Sciences, 4(1), 34–45.
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