Tax and Development

Aid Modalities for Strengthening Tax Systems

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Tax revenues provide governments with funds to invest in development, relieve poverty, deliver public services and build the physical and social infrastructure for long-term growth. Moreover, there are mutually beneficial links between taxation and good governance. Tax and Development: Aid Modalities for Strengthening Tax Systems highlights how taxation can have a positive effect on the quality of governance and a government’s relationship with citizens and, in turn, how good governance can have a positive effect on compliance and revenue mobilisation.

How can international assistance providers, including OECD members, international and regional organisations, support the development of tax systems in developing countries? Tax and Development: Aid Modalities for Strengthening Tax Systems provides practical guidance for policy makers and practitioners based on the results of an extensive literature review, a survey of aid agency officials and six country case studies (Ghana, Guatemala, Liberia, Mali, Mozambique, and Tanzania). It examines the aid instruments that donors use to assist developing countries including general and sector budget support, basket financing, stand-alone bilateral aid and funding South-South organisations. The strengths and weaknesses of each modality for supporting tax systems are identified, and some 50 recommendations to support the development of effective, efficient and growth-oriented tax systems in developing countries are provided.


Annex B. Survey questionnaire

As an information input to the study, a questionnaire was sent to representatives from 33 organisations – 19 bilateral agencies, 10 multilateral organisations, 2 regional tax organisations (CIAT and ATAF), and 2 non-government organisations (the Tax Justice Network, and the International Centre for Tax and Development). In consultation with KfW and the OECD (sponsors for this study), 20 of these organisations were identified as priorities for a direct interview, based on their involvement with tax and development issues. In the end, 17 interviews were completed, using the questionnaire as a framework for discussion; one other respondent replied in writing rather than doing an interview. For the organisations that were not targeted for interview, the study team invited designated representatives to respond by email, especially when only quick answers were required. For this group the response rate was very low, with 4 questionnaires received.


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