How will the ACP replace the revenues they lose by reducing tariffs and continue to pay for public services?
This question is not as acute as some would have it and answers are available. Replacing customs tariffs by other sources of fiscal revenue is a reform most countries have made because other fiscal revenues are more efficient both for the economy as a whole and the government. A much better long term solution is to shift dependence from tariff revenues to fiscal revenues (through excise duties, sales taxes or taxes on revenues) but also by increasing the tax base through boosting trade and economic growth. These other forms of taxes are a more sustainable tax base to finance much needed basic social services such as health and education. Some studies have overestimated the impact of tariff reduction on fiscal revenues, without considering other aspects. The assumption of rapid liberalisation on the ACP side is clearly mistaken. Current high tariffs encourage smuggling and corruption, and theoretical revenues are often lost through derogations and irregularities. Lower tariffs would red
