Will Changes to the international Tax System Benefit Low-income Countries?

Abstract

As leaders gather together at the African Union summit, new analysis from the Institute of Development Studies (IDS) recommends that they must seize the initiative on tax reform and not wait for richer countries to implement proposed changes from last year’s G8 and G20 summits.

Professor Moore who leads the International Centre for Tax and Development highlights two key areas where poorer countries can take positive action. Firstly, on tax exemptions, which are particularly prevalent in poorer countries, but universally used and granted to companies to attract new investment. Doubts have been cast around how effective exemptions are in generating new investment and Professor Moore argues that organisations such as African Union, the African Development Bank and the African Tax Administrators Forum should take the lead on developing new international guidelines on their use and effectiveness. Secondly, poorer countries can boost their own domestic tax revenues by boosting property tax collections and this could be encouraged through the creation of a regional based organisation such as an African Property Tax Initiative.