Taxation of wealthy individuals – broadly those with relatively high incomes and/or wealth as compared to national populations – presents an enormous, but relatively understudied, opportunity for lower-income countries seeking to increase revenue mobilisation and strengthening equity.
The ICTD invites research proposals that aim to understand barriers to more effective taxation of the wealthy and to explore concrete strategies for improving outcomes. With a focus on improving collection from wealthy individuals in lower-income countries, your proposal may consider a wide variety of tax types and issues – for example, personal income taxes, automatic exchange of information, property taxes, capital gains taxes, rental income taxes, and inheritance taxes.
Relative to wealthier countries, the largest gap in revenue collection in lower income countries lies in weak collection of taxes on personal income and property, including taxes on capital gains, rental income and professional incomes. Personal income taxes amount to almost 10% of GDP in most OECD countries but the comparable share in lower-income countries is generally only 2 to 3% of GDP. Similarly, property taxation in lower income countries is often only about 10% of the levels seen in richer countries. Recent research has also highlighted the very limited reach of taxes on wealth, including inheritance taxes.
While there are gaps in the collection of these taxes across all groups of taxpayers, the largest driver of weak revenue collection lies in ineffective collection from wealthier members of society. These gaps reflect a combination of non-compliance by taxpayers, weak collection and enforcement capacity within tax administrations, and significant gaps in existing policy. Recent international reforms have aimed to strengthen the taxation of income and wealth held offshore, but evidence shows that most lower-income countries have struggled to translate new rules into improved tax collection.
The ICTD has previously supported pioneering research that has deepened our understanding of the technical and political barriers to taxing the wealthy, as well as potential reform strategies to improve outcomes. This call aims to build upon and expand insights from that research. This includes, among others, research aimed at:
- Understanding patterns of non-compliance and improving mechanisms for identification of wealthy individuals in Uganda and Rwanda
- Exploring efforts to strengthen taxation of wealthy taxpayers in Uganda (here and here)
- Understanding technical and political barriers to taxing valuable properties in Sierra Leone, and
- Reviewing the political challenges of taxing elite groups effectively.
As we expand this work we are currently supporting projects exploring:
- The effectiveness of automatic-exchange of information at the Federal Inland Revenue Authority in Nigeria;
- Efforts to strengthen taxation of high-value properties in Sierra Leone and elsewhere;
- Programs to strengthen rental income taxes in Sierra Leone and Uganda;
- Strengthening taxation of wealthy individuals in Sierra Leone and Borno State, Nigeria;
- Strategies to better tax high-income professionals; and
- The potential and limits of general wealth taxes in lower-income contexts.
Submit a research proposal
We are looking to fund new research that can build upon these recent advances. We invite proposals from any relevant academic discipline, employing either qualitative or quantitative methods. We particularly encourage proposals from researchers from the regions in which we work (Africa and South Asia), and which involve collaboration or engagement with government authorities.
To submit a proposal, please fill in the form here, and select the theme that is most closely related to your planned research (either tax administration and compliance, international tax, informal tax, or property tax and subnational taxes).
Most research grants are for £50,000 or less, with most grants well below that amount, but there is no limit on project size and we also fund larger and multi-year projects. The deadline for proposals is March 3, 2023, though we may be able to consider proposals with a relatively immediate start date more quickly.
Calls for this proposal are now closed.