United Kingdom

Doubling support to DRM in partner countries

The UK’s tax and development vision is that partner countries “raise their own revenues, in a way that finances public services, enables sustainable and inclusive growth and reduces poverty”. Helping countries to develop well-functioning tax and public finance systems forms a crucial part of the UK’s support to partner countries. 

In 2017, the UK had a wide range of programmes supporting improved tax administration at the country level, including in their trailblazer countries Rwanda, Uganda, Ghana, Ethiopia and Pakistan. Furthermore, they provided funding for the OECD, World Bank and the Global Forum to help partner countries implement international tax standards, as well as supporting the Tax Administration Diagnostic Assessment Tool (TADAT) trust fund and the Institute for Fiscal Studies to help countries analyse tax policy changes.

The UK has worked with other donors, the G20 and with international organisations (OECD, IMF, World Bank and UN) to make tax capacity building more effective – including through the development of Medium-Term Revenue Strategies (MTRSs) for revenue authorities – and regularly raised tax for development at the G20 and G7. Through discussions at both ministerial and working level, together they have harnessed the existing momentum on domestic revenue mobilisation to encourage other development partners to support partner countries’ capacity to meet global standards on tax and to improve delivery with international organisations through the Platform for Collaboration on Tax (PCT).

Policy coherence for development

The UK takes a whole-of-government approach to tax and development with DFID working alongside HM Revenue and Customs’ (HMRC) Tax Capacity Building Unit (CBU), which provides peer-to-peer capacity building expertise in support of tax reform in partner countries. The CBU consists of a blend of programme staff, along with subject matter experts providing specialised support in the areas of Automatic Exchange of Information (AEoI), transfer pricing, Base Erosion and Profit Shifting (BEPS), human resources, debt management and audit.

At the country level, UK’s partners (DFID, HMRC’s Capacity Building Unit, Foreign & Commonwealth Office, HM Treasury) regularly share knowledge and experiences of partner countries to build a combined profile of the factors that may affect the success of tax capacity building programmes. This includes joint scoping missions to partner countries. DFID has also developed mechanisms to facilitate peer-to-peer learning and review by HMG actors to: (i) provide targeted support to DFID country offices at key moments in the programme cycle, e.g. design, implementation, annual review, evaluation and project completion; and (ii) identify, disseminate and apply good practice from one programme to another.

Outlook

The comparative advantage of the Addis Tax Initiative is to bring together a broad set of global stakeholders (development partners, partner countries, civil society organisations, academics, international financial institutions, regional organisations) to set the tax and development agenda.

With regard to ATI Commitment 1, the UK is committed to doubling its spending on tax projects. Although there is still work to do to meet this commitment by 2020, the UK has made good progress over the last year by announcing large country and central programmes.