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February 15, 2018

Countries must strengthen tax systems to meet Sustainable Development Goals

The IMF, the OECD, the United Nations and World Bank Group have called on governments to strengthen and increase the effectiveness of their tax systems to generate the domestic resources needed to meet the Sustainable Development Goals (SDGs) and promote inclusive economic growth.

Domestic resource mobilisation is a particular challenge for developing countries, which struggle to raise sufficient revenue to provide basic services, such as road infrastructure, healthcare, and public safety.

Research indicates that at least 15% of GDP in revenue is necessary to finance these basic services but, in almost 30 of the 75 poorest countries, tax revenues are below this 15% threshold.

At the same time, all countries need to pay greater attention to the spillovers from their tax policies and increase their support for stronger tax systems, the international organisations warned. "Governments and relevant stakeholders need to work together on establishing a fair and efficient system of international taxation, including efforts to fight tax evasion and tax avoidance."

During a conference at UN headquarters on taxation and the SDGs organised by the Platform for Collaboration on Tax, ministers of finance, tax authorities, and senior representatives from civil society, private sector, and academia debated the key directions needed for tax policy and administration to meet the SDGs by 2030.

The conference aimed to provide guidance to countries and stakeholders on how to better target tax efforts to achieve broader development goals.

By Joe Pickard

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