Background

G20 Finance Ministers, in their communique of February 2016, called upon the IMF, OECD, UN and World Bank Group to “recommend mechanisms to help ensure effective implementation of technical assistance programs, and recommend how countries can contribute funding for tax projects and direct technical assistance, and report back with recommendations” at their July meeting. The four organizations, working jointly as the members of the new Platform for Collaboration on Tax—drawing on their individual experiences in delivering technical advice and their interactions with other TA providers, development partners, and especially country governments—have developed a series of recommendations and enabling actions in response to this request, which are laid out in this draft summary document. The Platform organizations seek comments from interested stakeholders on these recommendations by July 8. A longer underlying analysis, and supporting examples, will be included in the final report to the G20, which will take account of comments received in this consultation. This will be submitted for the July G20 Finance Ministers meeting.

The attached draft seeks to identify core elements of successful tax capacity building programs, as well as the enabling factors that help to produce such successes. The paper emphasizes the need for a supportive political and social environment for reform at the country level—to ensure a country-led reform supported by all key stakeholders: leading government officials, political and business leaders, civil society and the citizenry more generally. The international organizations and G20 countries must help to build this through well-designed support for revenue reform initiatives, including through the inclusion of appropriate incentives. Coherent revenue reform strategies are needed as part of development financing plans—as recognized in the Addis Ababa Action Agenda a year ago. And cooperation and collaboration among development partners—including regional tax organizations–at the country level will become even more important with the anticipated scaling up of support for work on tax capacity building. Further inclusion of developing countries in international discussions will help to foster the needed environment for revenue policy and administrative reforms.

Questions to consider

1. The attached paper emphasizes the need for country-led and coherent revenue reform strategies, implemented over a period of years by committed governments providing sustained and visible political support, to underpin successful revenue improvement efforts. Does the draft imply the proper balance of roles for governments, technical development assistance providers, donor countries and agencies, and other stakeholders in this process?
2. The paper emphasizes that both technical skills and especially managerial knowledge/skills are critical to success (Enabler 1.2). Do you agree that the latter are important and if so, do you have thoughts on how development partners can best assist countries to develop, retain and bring to bear such managerial skills?
3. Are current tools for the effective measurement and evaluation of capacity support adequate (Enablers 2.2; 3)? If not, what can countries and development partners do to further improve their design and expand their use?
4.  Are there other factors not mentioned, or not sufficiently emphasized, in the paper that you think are important for successful capacity building and revenue system reforms?

Please do not restrict yourself to these questions; any other views you have on facilitating more effective capacity building by concerned governments and their development partners are sought.

Please respond with comments to:

GlobalTaxPlatform@worldbank.org, a common comment box for all the Platform organizations.

Discussion Draft: Report on Effective Capacity Building on Tax Matters in Developing Countries