It has been another exciting year in the tax world, and for the ICTD.
Globally attention has focused on continued efforts to reform global tax rules at the OECD, and, more recently, the adoption of a new tax convention at the UN. Lower-income countries have argued – supported by ICTD research – that reform efforts at the OECD have not done enough to give voice to, and meet, their needs. The new tax convention at the UN marks a new effort to build a global tax system that fully reflects those needs.
At the national level many countries are searching for new sources of revenue amidst significant fiscal pressures in the aftermath of the global pandemic. ICTD research has sought to highlight new revenue raising opportunities (including taxation of the wealthy, property taxes, better cross-border taxation and digitalisation) – while warning against strategies that may be ineffective, or increase inequality (including the dangers of mass registration campaigns, poorly designed taxes on mobile money, or regressive, and often gender-unequal small and informal taxes).
Meanwhile, the ICTD has continued to grow, invest in the tax and development field, and seek to shape global debate. We held two large and hugely successful international conferences in Nairobi in June. The most recent iteration of our teaching and learning course attracted a record 460 applicants, while we added four fully funded PhD students to our team. We also welcomed an impressive new Centre Advisory Group, chaired by former Uganda Revenue Authority Commission General Doris Akol, about which more news in the year ahead.
Thanks to all of our partners and supporters, and wishing everyone a happy holiday and new year.
ICTD milestones from 2023
After over a year in development, the ICTD launched in February a new research programme on Climate and Environmental Tax. As the climate emergency worsens, our research aims to provide more evidence on what types of climate and environmental taxes are desirable for lower-income countries and how to make them successful.
Courts are rarely invited to pronounce on the constitutionality – rather than the simple legality – of the way in which governments choose to organise tax collection. That said, the High Court of Trinidad and Tobago has been engaged in just such a case over the past year. The ICTD’s Mick Moore was invited by the Ministry of Finance to provide expert advice. Underlying it is a wider story about obstacles to reforming tax administration more generally, including the intensity of public sector trades union opposition to much-needed reforms that seem to threaten existing employment privileges.
Most read publications
In July, 138 members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting released an Outcome Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. Pillar Two provides for a global minimum tax on the earnings of large multinational businesses to reduce tax competition and profit shifting. If enacted, multinational business in scope will be required to pay a corporate income tax of at least 15% in each of the jurisdictions in which it operates.
A century since the League of Nations first began to discuss international taxation, the ICTD’s Martin Hearson argues that global tax governance is at a major inflection point.
Analysis of the international network of double tax treaties reveals a large potential for tax avoidance. Developing countries are, on average, not more likely to suffer from tax revenue losses than other countries. Yet, this average masks the fact that several countries, such as Bangladesh, Egypt, Indonesia, Kenya, Uganda and Zambia, are vulnerable to substantial potential losses of withholding tax revenue by treaty shopping.
In recent years, policymakers and donors have become increasingly interested in the use of mass registration campaigns as a tool to expand the tax nets of lower-income countries. While registering taxpayers is common – and indeed necessary – practice for revenue authorities, these mass campaigns seek to accelerate the process.
Most watched videos
Students Jacob Iormbagah from the University of Makurdi, Olivia Okello from the Kenya Revenue Authority, and Celeste Banze Filipe from Mozambique’s Ministry of Economy and Finance share reflections and highlights from participating in the 2021-2022 cohort of the ICTD’s Research on Tax and Development course.
A panel discussion covering lower-income countries’ achievements in international tax negotiations, the challenges they face, lessons learned and future prospects, moderated by Miranda Stewart, of the University of Melbourne.
The ICTD convened a conference in June Nairobi to discuss the future of global tax governance, which as Research Director Martin Hearson argues, has reached a critical juncture. The event brought together over 120 researchers, government officials, and members of civil society to present research, engage in pertinent policy discussions, and debate the future of multilateral tax cooperation.
The ICTD hosted a four-day workshop which brought together a group of partners from the research departments of the tax administrations of Uganda, Rwanda, Eswatini, Ethiopia, Nigeria, Ghana, and Kenya. Held at the ICTD’s institutional base at the Institute of Development Studies (IDS) from March 27-30th, the event served as an opportunity for officials to reflect on the scope, challenges and opportunities for conducting research within revenue authorities in Africa.
Although property taxes can serve as a valuable source of revenue for local governments, they remain largely untapped as a source of revenue in many lower-income countries. To address this critical gap, the Local Government Revenue Initiative (LoGRI) aims to support governments to raise local revenue more fairly and in ways that promote trust, transparency, and accountability. Guided by this objective, LoGRI hosted its inaugural conference from June 13-15 in Nairobi, Kenya, in partnership with the Intergovernmental Budget and Economic Council (IBEC) and the Kenya School of Revenue Administration (KESRA).
Across Africa, the rapid growth of digital financial services (DFS) has led to increased interest in effectively taxing these services. To meet the need for up-to-date information on evolving tax regulations, ICTD’s DIGITAX Research Programme has launched the DFS TaxMap, a dynamic web portal in English and French tracking the diverse approaches to DFS taxation.