This 2016 Monitoring Brief on Commitment 2 of the Addis Tax Initiative is the second of three 2016 ATI Monitoring Briefs, each of which is concerned with the monitoring of the fulfilment of one of the ATI commitments. The results presented are based on official data sources from the IMF, the World Bank Group, the World Economic Forum, PEFA as well as TADAT assessments, and on the replies from ATI partner countries to the 2016 ATI Monitoring Survey. For the publicly available DRM indicators, data from 2016 is taken into account so as to track the changes compared to the results from the 2015 Monitoring Report. The reference period for the reform progress in the respective partner countries is from 2016 onwards, the priorities and outlook on activities are for 2018/2019.
The ATI partner countries have embarked on efforts to ensure adequate domestic revenue
to significantly spur development and growth. Despite having made convincing progress, many countries
still face considerable gaps in having enough revenues to finance sustainable development. Key findings
from the 2016 Monitoring Brief on Commitment 2 of the Addis Tax Initiatives include:
- The average tax-to-GDP ratio in 2016 was 15.3%. Fewer than half of the ATI partner countries have achieved a tax-to-GDP ratio above the 15% mark considered necessary to provide basic public services.
- The revenue structure among ATI partner countries is dominated by indirect taxes, such as taxes on goods and services, which contribute an average of 44.1% of total tax revenue. Direct taxes, including income taxes, account for 35.6% of total tax revenue.
- Tax administration performance is valued by the ATI partner countries as a means of enhancing revenue mobilisation. Most of the ATI partner countries use the Tax Administration Diagnostic Assessment Tool (TADAT) to systematically assess the strengths and weaknesses of the tax administrations systems. Out of the 23 ATI partner countries, 17 have concluded the TADAT assessment.
- Priority areas of the ATI partner countries aimed at enhancing revenue mobilisation include improving and simplifying revenue collection, improving tax compliance, building capacity to implement important international standards, frameworks and agreements such as the BEPS Inclusive Framework, and Automatic Exchange of Information.