Tax Equity Initiative

Why Work on Tax?

Fiscal policies – including taxing and spending – are increasingly recognized as a key arena where important battles about the future of development and democracy are being fought. This has become evident in the starkest sense since the onset of the COVID-19 pandemic, as governments across the world are struggling to find the resources to ramp up health spending and keep their economies afloat.

At the International Budget Partnership (IBP), we work to promote citizen engagement with budget policies and processes to make them more equitable and inclusive. While our work has historically focused on the expenditure side of the budget, it is increasingly clear that we need to bring issues of taxation and revenue collection more squarely into our work. As a result, we have launched a Tax Equity Initiative to ensure citizens and civil society have the tools needed to effectively engage in tax reforms.

Why Focus on Equity?

Governments need to give more attention to promoting equity through taxation and have multiple policy tools at their disposal to promote more equitable societies. Among these, fiscal policies are probably some of the most important and powerful ones. How much tax different individuals pay, and how much they get back in public services can have an important effect on the overall distribution of income, wealth and economic and political opportunities—and determine how fair and equitable a society is.

We believe that enhancing civil society’s capacities and skills to engage in tax reform and push for more equitable taxation can pave the way for a reduction in inequality and the promotion of just societies where everyone has opportunities to flourish.

Tax Work at IBP

Over the course of 20 years supporting civil society budget work, IBP has developed a unique approach that combines technical expertise in public financial management, the capacity to link national and global processes and a focus on building independent local institutions.

IBP first started looking at tax issues with the 2006 publication of A Guide to Tax Work for NGOsto bring together evidence, examples and approaches relevant to civil society tax analysis and advocacy. In subsequent years, we have regularly covered tax transparency issues in the Open Budget Survey – our biennial global assessment of budget transparency, oversight and public participation – and documented case studies of successful civil society tax work.

In 2016, we launched a long-term tax project with the Latin America Tax Expenditure Research, Analysis and Learning (LATERAL) project which worked with ten organizations across Latin America to build their capacity to analyze and influence tax expenditure policies in their countries. IBP has provided partners with capacity building, research and advocacy support, peer learning opportunities and linkages to regional actors and events.

The Future of our Tax Work

The Tax Equity Initiative will build on past activities and take them to another level of effort and engagement through a comprehensive strategy aimed at shifting existing policy debates and creating better conditions for civil society to engage with and influence domestic taxation reforms.

Our work will be guided by four principles and practices:

  1. Build the institutional capacities of civil society groups in developing countries to influence tax policies through tailored technical assistance and the promotion of a network of groups that can learn from one another.
  2. Support civil society groups to engage with domestic tax reform processes and promote more equitable tax policies. We will support efforts directed at increasing overall revenues with a clear emphasis on the distributional aspects of such efforts.
  3. Work in partnership with other actors including country-level, regional and international institutions already active in this field. This will allow us to be more effective in building reform coalitions and promoting broader learning.
  4. Promote an integrated approach to budget work that links taxation and expenditure to take advantage of the complementary nature of revenue and spending to deliver on development goals such as the reduction of poverty and inequality.

After a series of consultations with country partners, international NGOs, donors, academics and others in the field, we decided to focus on three main areas of work for the first stage of the Tax Equity Initiative:

  1. Create and share a better knowledge base to build the field and inform further strategy development. This will include a scan of civil society tax work around the globe, a set of country case studies on successful CSO engagement in domestic tax reforms and a convening of relevant actors to discuss and reflect on progress so far.
  2. Foster tax transparency and participation by working with the Global Initiative for Fiscal Transparency (GIFT) on a global survey of civil society groups to inform the development of new international principles around tax transparency and citizen participation in tax policy decisions.
  3. Support CSO engagement with domestic tax reforms in developing countries through training, technical assistance, peer learning and more. This will include continuing our work on the LATERAL project, launching a new program to support CSOs in engaging with domestic tax reform efforts in Africa and developing training modules on taxation for civil society groups.