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Report by the Platform for Collaboration on Tax to the G-20: Enhancing the Effectiveness of External Support in Building Tax Capacity in Developing Countries

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Photo credit: Deshan Tennekoon



25/07/2016 — G-20 Finance Ministers, in their communique of February 2016, called upon the IMF, OECD, UN and World Bank Group to “recommend mechanisms to help ensure effective implementation of technical assistance programmes, and recommend how countries can contribute funding for tax projects and direct technical assistance, and report back with recommendations” at their July meeting. The four organisations, working jointly as the members of the new Platform for Collaboration on Tax — drawing on their individual experiences in delivering technical advice and their interactions with other providers of technical assistance, development partners, and especially country governments — developed a series of recommendations and enabling actions in response to this request. The recommendations in this report further benefitted from a public request for feedback on draft recommendations which attracted responses from governments, businesses, civil society and individuals.

This report seeks to identify core elements of successful tax capacity building programmes, as well as the enabling factors that help to produce such successes. The paper emphasises the need for a supportive political and social environment for reform at the country level — to ensure country-led reform is supported by all key stakeholders: leading government officials, political and business leaders, civil society and the citizenry more generally. The international organisations and G-20 countries can help to build this through well-designed support for revenue reform initiatives, including through the inclusion of appropriate incentives. Coherent revenue reform strategies are needed as part of development financing plans — as recognised in the Addis Ababa Action Agenda a year ago. Co-operation and collaboration among development partners — including Regional Tax Organisations — at the country level will become even more important with the anticipated scaling up of support for work on tax capacity building. Further inclusion of developing countries in international discussions will help to foster the needed consensus for revenue policy and administrative reforms.

The recommendations present an ambitious agenda to be supported by development partners. The report notes that further monitoring and evaluation will be needed to ensure the effectiveness of this support in enabling countries to fulfil their development goals. 

The G-20 Finance Ministers and Central Bank Governors acknowledged the report at their meeting held in Chengdu, China, on 23-24 July, and asked for a progress update by mid-2017.



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