29 July 2016: The UN Economic and Social Council (ECOSOC) has circulated a set of recommendations on building tax capacity in developing countries. The recommendations were provided by four organizations – the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the UN, and the World Bank – in response to a request from the Group of 20 (G20) Ministers of Finance and Central Bank Governors in February 2016.

The ECOSOC Note (E/C.18/2016/2) reports that the four organizations worked jointly as the ‘Platform for Collaboration on Tax’ to develop recommendations and enabling actions, and then solicited a round of public feedback from governments, businesses, civil society and individuals. The recommendations were presented to the G20 in Chengdu, China, on 23-24 July 2016. The Ministers of Finance and Central Bank Governors of the G20 requested a progress update by mid-2017. In the meantime, the recommendations are being presented to ECOSOC’s Committee of Experts on International Cooperation in Tax Matters for information and further feedback.

The executive summary of the four organizations’ report notes that the G20’s request arose in the context of increased recognition of: the centrality to development of strong tax systems; the importance of external support in building them; and the correspondingly increased willingness of advanced economies to provide substantially greater financing and other support for this purpose. The report “adopts as fundamental premise” that not only the quantity of revenue raised matters for development and growth, but also the way in which it is raised, emphasizing the value of strong tax systems. The report points to several key enablers to building tax capacity, including: a coherent revenue strategy as part of a development financing plan; strong coordination among well-informed and results-oriented providers; a strong knowledge and evidence base; strong regional cooperation and support; and strengthened participation of developing countries in international rule setting.

Another Note pertaining to the Committee of Experts provides an update on implementing the UN Capacity Development Programme on International Tax Cooperation, under the responsibility of the UN Department of Economic and Social Affairs’ (DESA) Financing for Development Office (FfDO). This Note (E/C.18/2016/3) includes a section on links to the Addis Ababa Action Agenda (AAAA) and the 2030 Agenda for Sustainable Development.

The Committee of Experts is expected to hold its 12th session in October 2016. [Note by the Secretariat: Enhancing the effectiveness of external support in building tax capacity in developing countries] [Note by the Secretariat: United Nations Capacity Development Programme on International Tax Cooperation] [Tax Cooperation Webpage]