Developing countries are well advised to adopt appropriate tariff and tax policies. An ideal scheme of such policies would include the following : 1) export taxes should be set on the basis of the long run elasticity of foreign demand in the case of commodities in which the country has market power and at a rate to ensure that exportable production equals the quota when export quotas are applied, 2) import tariffs should be set at equal rates on all manufactured goods, complemented by taxes on their primary inputs, to ensure equal effective rates of protection at desirable levels, preferably not exceeding 10 percent. Primary activities and exports in general should be exempted from tariffs on their inputs. 3) Value added taxes should be levied on all commodities at equal rates, supplemented by excise taxes on luxury commodities and on commodities that create negative consumption externalities.
Stored only when both papers are in the corpus — 22 citations exist upstream.