Public spending plays a key role in the economic growth and development of most developing economies. This book analyzes revenues, policy, and administration of Domestic Resource Mobilization (DRM) in developing countries. It provides a broad landscape of practical examples, drawing from lessons learned in World Bank operations across Global Practices over the past several decades. It should be thought of as a starting point for a more comprehensive research agenda rather than a complete inventory itself. This book reviews the trends in tax revenue collection in developing countries. It provides an overview of efforts to close the revenue gap, many of which have been supported by World Bank operations. The book reviews the special challenges facing low income countries, which have traditionally relied on indirect revenues in the context of limited formalization of their economies. An overview of tax policy and administration reform programs is presented, with an overview of outstanding issues that will shape the policy agenda in years ahead.

This report shows why Southeast Asian countries need to consider tax reforms after many struggled to finance massive public expenditure programs to combat COVID-19. The second in a four-part series, the report considers the impact of COVID-19 on Cambodia, Indonesia, Myanmar, the Philippines, and Thailand to lay out steps policymakers can take to create healthier fiscal spaces. It illustrates challenges faced around informality, tax collection, compliance, and progressivity. It emphasizes how preventing fraud, taxing wealth, and introducing environmental levies can help reduce poverty, tackle inequality, and contribute toward more sustainable growth. It is therefore crucial to understand the required policy responses as well as potential technologies that could help expand the tax base, increase tax compliance, and ease the process of paying taxes.

The Fund has long played a lead role in supporting developing countries’ efforts to improve their revenue mobilization. This paper draws on that experience to review issues and good practice, and to assess prospects in this key area.

At the UN General Assembly of September 2015, countries around the world committed to the Sustainable Development Goals (SDGs). By 2030, counties committed to attain poverty and hunger eradication, healthy lives, quality education, gender equality and sustainable development. Countries also committed to promoting full-employment growth, decent work, peaceful societies and accountable institutions as well as to reducing inequality and strengthening global partnerships for sustainable development. One key factor to achieving the SDGs will be the availability of fiscal resources to deliver the floors in social protection, social services and infrastructure embedded in the SDGs. A significant portion of these resources is expected to come from domestic sources in developing countries themselves, complemented by transfers from the countries that are better off. The report states that for all countries, the mobilization and effective use of domestic resources is at the crux of our common pursuit of sustainable development and achieving the SDGs Moreover, countries will be expected to set spending targets to deliver social protection and essential public services for all and set nationally defined domestic revenue targets. In particular, that raising additional revenues domestically for infrastructure, protecting the environment or social services may leave a significant portion of the poor with less cash to buy food and other essential goods. It is not uncommon that the net effect of all governments taxing and spending is to leave the poor worse off in terms of actual consumption of private goods and services. Achieving the new Sustainable Development Goals will depend in part on the ability of governments to improve their tax collection and enforcement systems. However, demand for investments into infrastructure and public services must be balanced against the competing need to protect low-income households that may otherwise be made worse off from misaligned tax and transfer policies.

At a time when the development community is grappling with the challenge of raising the required investment—estimated in the trillions of dollars—for attainment of the Sustainable Development Goals (SDGs), countries’ mobilization of their own fiscal revenues is receiving increasing attention. This edited volume discusses the political and institutional contexts that enable poor countries to mobilize domestic resources for global commitments and national development priorities. It examines the processes and mechanisms that connect the politics of resource mobilization and demands for social provision; changes in state-citizen, state-business and donor-recipient relations associated with resource mobilization and allocation; and governance reforms that can lead to improved and sustainable public revenues and services. The volume is unique in putting a spotlight on the political drivers of domestic resource mobilization in a rapidly changing global environment and in different country contexts in Latin America, Asia and sub-Saharan Africa. It will appeal to a broad academic audience in the fields of economics, development studies and social policy, as well as practitioners, activists and policy makers.

As Southeast Asia reels from the impacts of the coronavirus disease (COVID-19), domestic resource mobilization (DRM) has never been more challenging or more critical. Prior to the pandemic, many countries in the region were not achieving a tax yield of 15% of gross domestic product—the level considered to be the minimum for sustainable development. The pandemic has further reduced tax revenues and public expenditures are facing increasing pressure. This publication identifies technical, policy, and administrative tax capacity issues faced by ten countries in Southeast Asia. It also explores potential policy and administrative measures to strengthen DRM.