The paper explores how tax reform can contribute to improved governance and poverty reduction in poorer countries. It argues that Middle Income Countries (MICs) can play an important role in this process. Due to recent changes in the fiscal environment including changes in tax structures, it suggests that taxpayers in MICs are likely to become more engaged politically, and that issues of taxation and public spending will become more prominent in public policy debates. There is an opportunity to promote constructive tax reform directly in MICs, and indirectly in Low Income Countries where MICs exercise influence on development policy. Aid donors can contribute positively to such tax reform by encouraging local initiative and broad democratic debate over tax.
This is a two-page summary of a paper which can be accessed in full on this page.
Brighton, UK: Institute of Development Studies, 2 pp.
Research Summary 3, Taxation, Governance and Poverty: Where do the Middle Income Countries Fit? IDS Working Paper no. 230.