Financing government has emerged as a central problem in almost all transitional countries. Under Planned communist regimes, governments directly control and allocate economic resources. In decentralized market economies they must find incentive - compatible and administratively efficient ways to extract resources from large numbers of agents. New tax bases consistent with a market economy are required as the old tax bases, consisting of the surpluses of state enterprises, evaporate. This volume provides a broad coverage of the formidable problems governments face in transforming their systems of taxation in the transition. Deeper insights into the broad issues requires case analysis of the actual issues confronted by governments and their policies. This volume considers the experience of Bulgaria. Having experienced very large external shocks and large declines in the ration of tax revenue to GDP, Bulgaria has attributes in common with many countries of the former Soviet Union.
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