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International Centre for Tax and Development (ICTD)

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 16-12-2010
 31-03-2015
 Taxation
 Research and Evidence Division (Growth Team), Research and Evidence Division (Governance, Conflict and Social Development Team)


 Mick Moore, Adam Randon, Tanja Ustvedt

  Global
  Global


To generate knowledge that will help developing (particularly low income and fragile) countries to (i) mobilise domestic resources efficiently, effectively and equitably and (ii) develop tax systems that promote pro-poor economic growth and good governance.

The evidence shows there is a need to improve tax systems in developing countries because:
1. Increasing tax revenues, combined with sustainable economic growth, are the eventual exit strategy from aid dependency.

2. Taxes, if designed well, can promote economic growth, lessen extreme inequalities, tackle climate change and fund the delivery of the MDGs.

3. Tax is a core part of state-building. Fair and transparent tax collection improves government legitimacy and accountability, and stimulates effective state administration and good public financial management.

4. Taxes shape investment and economic growth: tax revenues that increase with economic growth encourage improved prosperity and ensure sustainable funding of essential public services for poor people.

5. Developing countries have committed themselves, under the 'Monterrey Consensus' to deliver 'effective, efficient, transparent and accountable' tax systems in return for increased development assistance.

6.The 2010 UN MDG Summit committed UN member countries to "Strengthening international cooperation in tax matters to enhance governments' tax revenues, fiscal capacity and policy space".

7. Evidence of partner countries’ ‘tax effort’ matters for sustaining public support in OECD countries for international development.

8. There are concerns that aid can become a ‘resource curse’, undermining the accountability between state and taxpaying citizens.

9. Improving tax systems is essential to maintain public finances during the current financial crisis.

10. Gender issues around taxation are poorly understood but in some developing country contexts women may be disadvantaged;

11. Corruption, rent-seeking and tax evasion are closely inter-connected with weak governance.

1. Knowledge and evidence generation: A high quality, rigorous and relevant body of data and knowledge is available as evidence for better policies and strategies, which promote better tax systems for poverty reduction.

2. Research uptake improved: through increased use of high quality evidence as the basis for promoting effective tax systems.

3. Capacity Building: Increased capacity for producing and using tax research in the global south.

Funded by the Growth Research Team.

Total cost with joint financiers is: £5,998,048 (NORAD £2,498,048; DFID Growth Research Team £1,750,000; DFID Governance Research Team £1,750,000)


£3,500,000
  201097