domestic resource mobilization

Domestic Revenue Mobilisation is key for governments to fund their own development goals, finance gender-responsive public services and to reduce economic, social and gender inequalities. While the EU is leading the way when it comes to the quantity of aid it provides towards domestic revenue mobilisation, there is significant room for improvement when it comes to the quality of the aid provided.

Governments need more domestic revenue to fund their own development goals, but it won’t come from squeezing the poor. It’s not only about collecting more. It’s about how that revenue is collected.

This joint briefing from Oxfam, Christian Aid, Action Aid and the CBI reflects a growing convergence between businesses and tax advocacy groups on the use of tax incentives in the Global South.  It argues that tax incentives can be a useful tool in promoting decent jobs and growth.  But it also contends that too often tax incentives are used in inefficient and ineffective ways, and in the worst cases are entirely redundant.  

The World Bank shouldn’t forget its goals to “end poverty and boost shared prosperity” as it increasingly relies on the private sector to finance development, Oxfam warned at the start of the institution’s Spring Meetings.

In Mali, French aid aims to build the technical capacity of Malian administrations to collect tax by fighting against fraud and tax evasion. However, collecting more domestic resources alone will not be sufficient to reduce poverty. France must support watch-dog organizations to ensure greater transparency and accountability on the use of these resources for the benefit of the poorest.

Oxfam welcomes the Addis Tax Initiative and its ambition to help developing countries strengthen their tax administrations. Tax revenue provides vital finance for governments to reduce poverty and inequality.