Transcript Domestic resource Mobilization

TRENDS AND THREE ISSUES
Michael Keen
2014 CAPE Conference, ODI
November 12, 2014
Better Growth, Better Climate: The New Climate Economy Report
Trends
Tax revenues have more than held up
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1990
1992
Low income
1994
1996
1998
2000
Lower middle income
2002
2004
2006
Upper middle income
2008
2010
High income
But there is need, and scope , to do more
2012
But it’s not just the total that matters…
VAT revenues have increased…
…and CIT revenues been
robust
8
6
5
4
1990-1999
3
2000-2009
2
2010-2012
1
0
Low income
Lower
middle
income
Upper
middle
income
Percent GDP
Percent GDP
7
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
PIT revenues are modest but
rising….
8
6
1990-1999
4
2000-2009
2
2010-2012
Upper
middle
income
High
income
Percent GDP
Percent GDP
10
Lower
middle
income
2010-2012
Lower
middle
income
Upper
middle
income
High
income
…while trade taxes are in
decline
12
Low
income
2000-2009
Low
income
High income
0
1990-1999
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1990-1999
2000-2009
2010-2012
Low
Lower Upper
High
income middle middle income
income income
100
90
80
70
Iraq
Brunei
Equatorial Guinea
Saudi Arabia
Libya
Oman
Kuwait
Angola
Bahrain
Congo Republic
Nigeria
United Arab Emirates
Algeria
Yemen
Iran
Timor-Leste
Qatar
Chad
Sudan
Trinidad and Tobago
Azerbaijan
Venezuela
Botswana
Myanmar
Syria
Cameroon
Kazakhstan
Mexico
Bolivia
Malaysia
Indonesia
Ecuador
DRC
Russia
Guinea
Vietnam
Norway
Mauritania
Mongolia
Ivory Coast
Chile
Uzbekistan
Colombia
Namibia
Zambia
Niger
Ghana
Kyrgyz Republic
Australia
Sierra Leone
Brazil
Lesotho
United Kingdom
Tanzania
Canada
EI revenues are important to many
Average Natural Resource Revenue (in %
Total Government Revenue) 2000-2011
Petroleum
Mining
60
Both
50
40
30
20
10
0
Some results on conditionality
Extent and nature of revenue-related
conditionality
Resurgence since crisis
Much focus on commodity tax
45
40
Trade
12%
35
30
25
20
Income
32%
15
10
5
low income
middle income
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
0
G&S
56%
Signs of an impact?
Crivelli and Gupta (2014)
• Panel of 126 countries, 1993-2013; add dummy for
revenue-conditionality met to standard effort
equation; system GMM
• Revenue conditionality has significant, sizable impact
– Mainly for revenue from goods and services
– Especially in lower income countries
– Especially where governance strong
• Lessons?
Innovative sources of finance
Is it needed?
Proposals continue: FTT, SDRs, carbon taxes—May or
may not be good taxes, but:
• Why would governments be more willing to give up
these revenues then others?
• Stronger case for those that improve efficiency
– But increased giving likely to be minor
• Ideal is an efficient tax not ‘belonging’ to anyone
– International maritime/aviation
A diversion?
Protecting tax bases in developing
countries
Heavy reliance on corporation tax
20
18
16
14
12
10
8
6
4
2
0
Corporate tax revenue (in % of total revenue)
Importance of G20/OECD “BEPS” project
• Some items especially important for DCs
– Dealing with treaty abuse
• NL willing to renegotiate relevant clauses
– Simplifying arms length pricing?
• And significant issues for many from “Indirect
transfers of interest”
• ‘Fixing’ international tax won’t solve all
problems—but will be a big help