Ring-fencing Taxation

How and why the earmarking of tax revenues is widespread across the world

This paper demonstrates that the ring-fencing of tax revenues for specific purposes takes place widely across the world.

Examples like India’s CES tax, whose receipts for the 10 years to 2023/24 totalled nearly $300 billion, challenge the assumption propagated by Finance Ministries that hypothecating taxes is not possible. Through the many examples cited, this paper makes the case that the automation of financial transfers now makes the practice of earmarking spending entirely feasible.

REPORT: Ring-fencing Taxation: How and why the earmarking of tax revenues is widespread across the world