The World Bank and the International Monetary Fund (IMF) will soon launch a new initiative to help developing countries strengthen their tax systems, an IMF statement said on Saturday, reports BSS. Referring to an analysis, the statement said many lower-income countries have the potential to increase their tax ratios by at least 2-4 percent of GDP, without compromising fairness or growth, and the additional revenues will allow developing countries to fill financing gaps and to promote development. The WB and IMF would launch the new initiative soon to help the developing countries explore the potential. The announcement came ahead of the “Financing for Development” conference, to be held in Addis, Ethiopia on July 13-16. Heads of state, civil society organizations, multilateral institutions and private sector representatives will participate in the conference to discuss on how to scale up finances to meet the Sustainable Development Goals (SDGs). The initiative would have two pillars: deepening the dialogue with developing countries on international tax issues, aiming to help increase their weight and voice in the international debate on tax rules and cooperation; and developing improved diagnostic tools to help member countries evaluate and strengthen their tax policies. The initiative would be based on the Bank’s current tax programmes in over 48 developing countries and the Fund’s technical assistance projects in over 120 countries. The WB and IMF also planned to strengthen their diagnostic tools, developing new methodologies where needed, to enable member countries to identify priority tax reforms and design the requisite support for their implementation. This effort would complement the launch of the Tax Administration Diagnostic Assessment Tool (TADAT) in November. The WB and the IMF will also continue to work in close collaboration with other development partners in expanding technical advisory work in the tax area.
