World Bank and IMF to help developing countries strengthen tax systems

Tax ReformWASHINGTON, United States, Friday July 10, 2015 – The World Bank and International Monetary Fund (IMF) are launching a new initiative to help developing countries strengthen their tax systems.

The announcement comes ahead of the Financing for Development conference in Addis, Ethiopia next week, at which heads of state, civil society organizations, multilateral institutions and private sector representatives will discuss how to scale up finances to meet the Sustainable Development Goals (SDGs).

“A strong revenue base is imperative if developing countries are to be able to finance the spending they need on public services, social support and infrastructure,” said IMF Managing Director Christine Lagarde. “But experience shows that with well-targeted external technical support and sufficient political will, it can be done.”

Responding to country demands, the IMF/World Bank initiative has two pillars: deepening the dialogue with developing countries on international tax issues, aiming to help increase their weight and voice in the international debate on tax rules and cooperation; and developing improved diagnostic tools to help member countries evaluate and strengthen their tax policies.

By further leveraging their collective expertise, the Bank and Fund aim to play a fuller role in helping all of their member countries achieve the ambitious goals that the world will be setting for itself later this year in New York.

“We very much want to help developing countries raise more revenues through taxes because this can lead to more children receiving a good education and more families having access to quality health care,” said World Bank Group President Jim Yong Kim.

“If everyone pays their fair share – even while challenging the status quo– developing countries can close their financing gaps and promote inclusive growth.”

The initiative will deepen the institutions’ ongoing collaboration with developing countries to identify key international tax policy concerns and potential solutions, both at the country level and in the context of the continuing international dialogue.

The institutions also plan to strengthen their diagnostic tools, developing new methodologies where needed, to enable member countries to identify priority tax reforms and design the requisite support for their implementation. This effort would complement the launch of the Tax Administration Diagnostic Assessment Tool (TADAT) in November.

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