Many lower income countries face significant pressures to expand their tax base. In recent years, this challenge has often been discussed with reference to informal economies, where a substantial share of workers and enterprises operate. While common approaches to taxing informal economies have focused on simplified or presumptive tax regimes and mass registration campaigns, research has shown that these strategies have been largely ineffective and regressive, disproportionately impacting low-income groups while generating minimal revenue. Unrealistic revenue targets set by international and national actors have also led to short-term and unproductive practices in this regard. While the formalisation and integration of informal economies has been a long-standing demand from a range of stakeholders, from revenue authorities to labour unions to informal sector associations, addressing it effectively from a tax perspective requires policies to be more progressive, context-appropriate and part of a holistic engagement with informal economies.
At the 2025 ATI General Assembly, ICTD is co-organising a technical session to draw on experiences from ATI partner countries and beyond. Practitioners will discuss innovative strategies for progressively expanding the tax base and adapting tax practices to emerging economic trends. Discussions will cover the challenges with common approaches to taxing informal economies, new approaches to targeting such as risk-based registration and taxing self-employed professionals and combining taxation with social protection provision.
Objectives
This session aims to:
- Share best practices and concrete country experiences on progressive and effective approaches to taxing the informal economy.
- Challenge the prevalent notion that broad-based registration campaigns and presumptive taxes are the most effective way to close the compliance gap by examining the latest research and experiences on their cost-benefit outcomes and wider socio-economic impacts.
- Promote evidence-based and inclusive strategies that align tax formalisation with social and economic development goals.
Speakers
- Regina Navuga, Tax Equity Manager Africa, International Budget Partnership (IBP)
- Max Gallien, Research Lead, International Centre for Tax and Development (ICTD)
- Denis Mukama, Interim Commissioner, Strategy and Risk Analysis Department, Rwandan Revenue Authority
- Guillermo Montt, Social Protection Specialist, International Labour Organisation (ILO)
About the 2025 ATI General Assembly
The 2025 ATI General Assembly will serve as a platform to reflect on ATI’s progress and challenges since 2020, and to present and discuss the new ATI post-2025 declaration.
Technical exchanges, opportunities for policy advocacy and networking shall nurture the effectiveness of the ATI. Further, the 2025 General Assembly shall strategically guide the ATI, bring the needs and priorities of ATI partner countries to the fore and strengthen members’ engagement to implement the post-2025 declaration and its commitments.
The hybrid event is organised by the International Tax Compact (ITC), in its role as the facilitator of the ATI Secretariat, in close cooperation with the ATI Steering Committee. The ITC is funded by the German Federal Ministry of Economic Cooperation and Development and co-funded by the European Union.
Please note that this event is exclusively for ATI members.
Check out highlights from the event
ATI put together key points across different panels during the General Assembly, including the discussion on Taxation and the Informal Economy. Read it here.