Integration, decentralization, taxation, and revenue sharing : Good governance, sustainable fiscal policy and poverty reduction as peace-keeping strategies

Dezentralized System 
 
Separate Taxation with Free Competition 

 
 
Grants System (From the Subordinate to the 
Higher Jurisdiction) 

 
 
Separate Taxation with Partial Legislative 
Sovereignty 

 
 
Surcharge System Without Limitations 

 
 
Common Tax Pool for the Whole Tax System 
(With Concurrent Legislation) 

 
 
Common Tax Pool for Single Taxes 

 
 
Surcharge System With Limitations 

 
 
Separate Taxation without Legislative 
Sovereignty on the Subordinate Level 

 
 
Grants System (From the Higher to the 
Subordinate Jurisdiction) 
Centralized System 
Figure 6: Revenue Sharing and Centralization/Decentralization 
For a systematic coverage of all necessary tax data a full registration of all liable indi-
viduals, households and firms including the place of residence is necessary. There-
fore, a tax identification number (TIN) has to be implemented being equal for all juris-
dictional levels. The TIN should clearly indicate the local responsible revenue office, 
the kind of tax raised, the tax number of the respective individual/household or firm, 
and the shareholder numbers of the firms consisting of the firm tax number and the 
individual/household tax number. All these TIN numbers have to be used within the 
different tax forms for direct and indirect taxation so that a clear base for the tax sta-
tistics is formulated, which enables the fiscal administration or the Ministries of Fi-
nance (MoF) to implement highly sophisticated revenue estimation models (e.g. mi-
cro simulation models) for the necessary revenue forecasts. 

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