This paper presents an overview of taxation in the transitional economies of Central and Eastern Europe and the Former Soviet Union. The governments of transitional economies have been implementing simultaneous reforms of legal, political, and economic institutions, reforms which are dependent upon the ability of the emerging tax systems to efficiently enforce the tax system. As the transitional process continues, we are able to identify characteristics of successful reform programs, and note the common problems that hinder implementation of more stable tax systems. The discussion covers 4 main issues: the enduring legacy of centralized tax systems, the general direction and timing of tax reform, the tax policies of the transitional period, and thoughts about the path of reform in the future.
Working Paper Number 97-01.