Revenue mobilization is a key development priority and essential to finance investments in human capital and infrastructure to achieve the World Bank’s twin goals of ending extreme poverty and boosting shared prosperity. Countries generate and collect public revenues through taxes and fees, domestically and internationally, to finance activities and services to improve healthcare, education, infrastructure services, public order and other services for their citizens and businesses.
The Global Tax Program (GTP) provides an umbrella framework for tax support and leads an ongoing program of activities at both international tax and country levels focused on strengthening tax institutions and mobilizing revenues at the international and domestic levels. The GTP Program is one of the Umbrella 2.0 pilots for Trust Fund Reforms recently undertaken by the WBG.
- The development of diagnostic tools, as well as engagements and the provision of support to global efforts for improving domestic resource mobilization (DRM) in developing countries. This includes the Tax Policy Assessment Framework (TPAF), and the DIAMOND framework for identifying drivers and solutions of performance weaknesses in revenue administrations;
- Supporting countries in the improvement of revenue collection, through medium-term revenue strategies that are guided by country-focused diagnostic work;
- Improvement of tax policies and administrations’ ability to collect revenues;
- Equipping revenue administrations with knowledge and tools to raise revenues in hard-to-tax sectors and reduce the size of the shadow economy;
- Instituting transfer pricing arrangements and mechanisms for resolving disputes between taxpayers and revenue administrations that secure a fair share of taxes on profits for developing countries such as Vietnam;
- Expanding the tax net to include the digital economy;
- Fighting tax evasion through early detection and smarter auditing;
- Increasing taxpayers’ voluntary compliance through outreach and education to build trust, increase collection and address informality;
- Supporting countries to enhance the effectiveness of their tax incentives regimes to contribute to the achievement of the country’s tax policy and development objectives (including improving the efficiency and equity of the tax system, broadening the tax base and reducing corruption);
- Promoting knowledge exchange on country experiences with DRM reform.
The GTP combines different types of trust funds. A Multi-Donor Trust Fund (MDTF), which manages funds collected from different donors as a single program, and Single-Donor Trust Funds (SDTFs), where the activities are determined by a bilateral agreement between the donor and World Bank.
The number of donors and size of commitments have changed markedly since the first meeting of the GTP Steering Committee in September 2017. The number of donors has increased from three to nine: Australia, Denmark, France, Japan, Luxembourg, Netherlands, Norway, Switzerland, and United Kingdom. The GTP total secured contributions amount to more than USD 67 million for the period FY2018-24.
Development Partners who meet the eligibility criteria compose the GTP’s Steering Committee (SC), which is the key oversight body of the Program. The purpose of the Committee is to provide strategic guidance and monitor progress on the activities funded under the GTP. PCT partners and other Development Partners are also invited to participate in the SC meetings with an observer status.