Chapter 4 | Page 167 migrants.125 Such frameworks are vital in creating more favourable conditions for developing States to regulate and manage their level of external debt. 4.3.3 Outcome challenges: Equity and revenue maximisation In addition to the institutional and process challenges identified above, maximising resources for ESC rights faces a number of outcome challenges. These include adequacy of revenue generation, fairness, equity and progressiveness. 4.3.3.1 Adequacy of revenue generation The effective tax rate is an important measure of mobilisation of adequate tax revenue. The effective tax rate is a measure of the overall level of tax in the country in relation to aggregate GDP. In relation to rationalising tax structures to increase revenue, the World Bank suggested that an optimal tax structure must: minimise exemptions and tax incentives; have no minor and costly taxes; include corporate taxes that are broad-based and reasonable; have simple personal income taxes; and adopt a broad application of VAT/GST and lower trade tax rates.126 These policy orientations are essential for broadening and deepening adequacy and effectiveness of tax structures. Tax reform policies in developing countries should also be guided by the fact that indirect taxes create deadweight losses and lower revenues127 and the share of direct taxes overall should rise, especially that of corporations.128 The number of income tax brackets should be small, the degree of progression moderate and the top marginal tax rate low.129 If the tax rate is too low, the ability of the tax regime to generate sufficient revenue for development and social services can be severely limited. If the tax rate is too high, there is a 125 Ibid. 126 The World Bank, above n 73, 18. 127 Jha, above n 73. 128 Ibid., 25. 129 Ibid.