International Centre for Tax and Development (ICTD)

The International Centre for Tax and Development (ICTD) is a global policy research network, devoted to improving the quality of tax policy and administration in developing countries, with a special focus on sub-Saharan Africa. It is led by Professor Mick Moore and funded by the UK Department for International Development and the Bill and Melinda Gates Foundation.

Commissioner General, Ethiopian Revenue Authority being interviewed by journalists at the Annual Meeting of the International Centre for Tax and Development (ICTD). Credit: Rhiannon McCluskey - IDS/ICTD

The ICTD’s primary objective is to provide research evidence that supports developing countries in raising domestic revenues equitably and sustainably, in a manner that is conducive to pro-poor economic growth and good governance. It does this by generating and disseminating research to policymakers and the public in order to broaden public debate on taxation issues in Africa. The ICTD also seeks to build the capacity of revenue authorities and academics in Africa to conduct research on tax issues through research collaboration and training.

Key ICTD research themes

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Image: Former Commissioner General of the Ethiopian Revenue and Customs Authority, Beker Shale, being interviewed by journalists at the ICTD Annual Meeting in 2016. Credit: R.McCluskey - IDS/ICTD

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This is the front cover of ICTD Working Paper 40, Limitations of the BEPS Reforms: Looking Beyond Corporate Taxation for Revenue Gains

Limitations of the BEPS Reforms: Looking Beyond Corporate Taxation for Revenue Gains

ICTD Working Paper 40 (2015)

This paper argues that global corporate tax policies have long been dominated by a political consensus among governments of countries at all levels of economic development, to the effect that forces of tax competition render taxation of the cross-border income of multinational companies both infeasible and unwise. Current tax laws around the world, which permit widespread tax avoidance through shifting corporate profits to tax havens, reflect the implementation of this political consensus. More details

This is the front cover of ICTD Working Paper 39, What Do We Know about Mineral Resource Rent Sharing in Africa?

What Do We Know about Mineral Resource Rent Sharing in Africa?

ICTD Working Paper 39 (2015)

Governments that lack the capacity to mine resources themselves have to attract foreign direct investment. However, since resources are not renewable countries need to capture a ‘fair’ share of mineral resource rent to promote their development. While the sharp rise of the world prices of most minerals (in particular, gold, copper, iron and bauxite) multiplied the global turnover of the mining sector by 4.6 between 2002 and 2010, tax revenue earned by African governments from the non-renewable natural resource sector only grew by a factor of 1.15 (Mansour 2014). The sharing of mineral resource rent between governments and investors is often criticised for being unfavourable to African governments. More details

This is the front cover to IDS Policy Briefing 96, 'Building Tax Capacity in Developing Countries'.

Building Tax Capacity in Developing Countries

IDS Policy Briefing 96 (2015)

The agenda for the Third International Conference on Financing for Development suggests there will be less focus on aid, and more on how developing countries can generate their own financial resources for development. Governments will be urged to tax more effectively, and donors will be called upon to help build capacity in developing country tax administrations. More details

IDS publications on international development research

Tax and the Governance Dividend

ICTD Working Paper 37 (2015)

It is now widely believed that taxation contributes to the quality of governance. There are a number of variants of the broad argument. The most general proposition is that, if governments are dependent on broad general taxation for their incomes, they will, for reasons of self-interest, be more responsive to the needs of their citizens and more likely to allow citizen representatives to share in governance. From a broad historical perspective, that argument is probably valid. More details

This is the front cover of ICTD Working Paper 38, Taxing the Urban Boom: Property Taxation and Land Leasing in Kigali and Addis Ababa

Taxing the Urban Boom: Property Taxation and Land Leasing in Kigali and Addis Ababa

ICTD Working Paper 38 (2015)

Much contemporary economic growth in Africa is driven by urban service sectors including construction and real estate. This manifests in rapidly transforming landscapes and the proliferation of valuable property in the continent’s booming large cities, often accompanied by growing socio-economic inequality. In this context, improving systems for property taxation is an urgent and growing need – something that national and international policymakers increasingly recognise. More details

This is the front cover of ICTD Working Paper 36, Limitations on Interest Deductions: A Suggested Perspective for Developing Countries

Limitations on Interest Deductions: A Suggested Perspective for Developing Countries

ICTD Working Paper 36 (2015)

This paper evaluates the efforts of the Organisation for Economic Co-operation and Development (OECD), in its project on base erosion and profit shifting (BEPS), to control profit shifting by members of multinational groups through payments of interest on related-party loans. Currently, members of groups appear be shifting large amounts of income from countries around the world to affiliates in zero- or low-tax countries, More details

IDS publications on international development research

The Political Economy of Property Tax in Africa: Explaining Reform Outcomes in Sierra Leone

African Affairs 114.456 (2015)

Effective local government taxation is critical to achieving the governance benefits widely attributed to decentralization, but in practice successful tax reform has been rare because of entrenched political resistance. This article offers new insights into the political dynamics of property tax reform through a case study of Sierra Leone, focusing on variation in experiences and outcomes across the country's four largest city councils. More details

This is the front cover of ICTD Working Paper 35, Unitary Taxation in the Extractive Industry Sector

Unitary Taxation in the Extractive Industry Sector

ICTD Working Paper 35 (2015)

This paper analyses whether a global unitary taxation approach to corporate income tax (CIT) can improve the ability of governments to design and administer efficient and effective tax and royalty policies for the extractive industries. Drawing upon experience with unitary approaches to corporate income taxation of the extractive sectors in subnational taxation systems of the United States (US) and Canada, this paper suggests that a unitary CIT should not be used in isolation, or be employed as the dominant source of revenue from the extractive sector. Instead, because of its informational and risk-aligning advantages, a unitary CIT may be best used in combination with other rent/profit-related levies on the extractive sector. More details

This is the front cover of ICTD Working Paper 34, Unitary Taxation: Tax Base and the Role of Accounting

Unitary Taxation: Tax Base and the Role of Accounting

ICTD Working Paper 34 (2015)

For more than twenty years there have been discussions on the issue of multinational corporations shifting profits from high- to low-tax jurisdictions, with resulting gains to them from the resulting reduction in their effective tax rate. Underpinning much of this debate has been an implicit assumption that, first of all, profits are a fixed and constant known factor in this tax base-shifting equation; and, secondly, that by adopting consistent international financial reporting standards (IFRSs) the risk of arbitraging on tax is removed from this equation. More details

This is the front cover of ICTD Working Paper 33, Understanding Low-Level State Capacity: Property Tax Collection in Pakistan

Understanding Low-Level State Capacity: Property Tax Collection in Pakistan

ICTD Working Paper 33 (2015)

This paper is based on a detailed analysis of how field staff in the Excise and Taxation Department of the Punjab Provincial Government collect the (very low-yielding) property tax. In general, informal practices and relationships play a major role. More specifically, field staff enjoy considerable discretion in making key decisions about property tax assessment; the additional earnings that they are able to get from colluding with taxpayers are used in part to employ support staff and cover routine operating costs; and field-level staff are deeply rooted in the locality where they work, typically serving in one office for their entire career, and both monopolise and manipulate the information on the tax base and on collection performance that senior management would need to establish effective control of the system. More details

The Tax Policy Outlook for Developing Countries: Reflections on International Formulary Apportionment

ICTD Working Paper 32 (2015)

The author offers a retrospective analysis of his recently-completed extensive research on the technical feasibility of international formulary apportionment of corporate taxable income, as a replacement for the body of ‘arm’s-length’ transfer pricing rules generally in use around the world. In this retrospective analysis the author considers recent analytical work on base erosion and profit shifting. More details

IDS publications on international development research

How Property Tax Would Benefit Africa

Africa Research Institute: Counterpoints (2015)

The developmental benefits of governments taxing citizens, even for modest sums, are often disregarded. African governments have long depended on revenue from natural resources or foreign aid to fund budgets. While the potential contribution that better domestic resource mobilisation could make to national finances has received greater attention since the 2008 global financial crisis, international donors often fail to recall the central role that bargaining over taxation has played in building effective, accountable and responsive states across the developed world. Although never popular, taxation is an essential component of consensual and representative government. More details

This is the front cover for Working Paper 28, Global Taxes and International Taxation: Mirage and Reality

Global Taxes and International Taxation: Mirage and Reality

Many global taxes have been proposed over the years. This study reviews the more important global tax proposals and concludes that, while many such ideas seem inappropriate or inadequately thought through, others are worth taking seriously. In reality, however, no global governance structure to impose such taxes exists or is likely to emerge in the near future. Global taxation – a dream for some and a nightmare for others – thus is, and is likely to remain for years to come, little more than a mirage. More details

This is the front cover for Working Paper 31, Information Technology and Fiscal Capacity in a Developing Country: Evidence from Ethiopia

Information Technology and Fiscal Capacity in a Developing Country: Evidence from Ethiopia

ICTD Working Paper 31 (2015)

Governments in developing countries are typically constrained by a limited fiscal capacity to finance the provision of essential public goods – a constraint that has been cited as one of the fundamental challenges to economic development. Several developing countries haverecently implemented electronic tax systems (ETS) to improve monitoring tax compliance using modern information technology (such as electronic sales registry machines (ESRMs)). More details

This is the front cover for Working Paper 29, Revenue Pressure on Mexican Municipalities: Does it Lead to Greater Accountability?

Revenue Pressure on Mexican Municipalities: Does it Lead to Greater Accountability?

ICTD Working Paper 29 (2015)

Development scholars are taking renewed interest in the taxation-accountability theory, which broadly claims that if governments are dependent on taxation they will become less corrupt and more accountable to citizens. The need to raise tax revenue is said to spark incentives that lead to mutually beneficial bargaining between the government and its citizens, through which citizens agree to make tax payments in return for more accountable governance and increased influence in government decision-making. More details

IDS publications on international development research

Taxation, Responsiveness and Accountability in Sub-Saharan Africa: The Dynamics of Tax Bargaining

This book provides the most complete treatment of the connections between taxation and accountability in developing countries, providing both new evidence and an invaluable starting point for future research. More details

This is the front cover for Working Paper 25, Unitary Taxation of the Finance Sector

Unitary Taxation of the Finance Sector

ICTD Working Paper 25 (2014)

The international tax system, designed a century ago, has not kept pace with the modern multinational entity, rendering it ineffective in taxing many modern businesses according to economic activity. There are difficulties associated with the application of the traditional international tax regime to traditional multinational entities, and these are exacerbated when the same regime is applied to sectors of multinational entities which are considered non-traditional businesses. More details

This is the front cover for Working Paper 27, International Distribution of the Corporate Tax Base: Implications of Different Apportionment Factors Under Unitary Taxation

International Distribution of the Corporate Tax Base: Implications of Different Apportionment Factors under Unitary Taxation

ICTD Working Paper 27 (2014)

Under the current system of separate accounting, tax-motivated international profit shifting results in misalignment of profits and real economic activity. While the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting initiative aims to measure and curtail this, critics claim serious progress is only possible with greater emphasis on formulary apportionment methods (Picciotto 2013), or other methods outside the present international tax architecture (IMF 2014). More details

This is the front cover for Working Paper 26, Unitary Taxation and International Tax Rules

Unitary Taxation and International Tax Rules

ICTD Working Paper 26 (2014)

Any proposal for adoption of a unitary tax (UT) system ought to clear the first and most common hurdle of its compatibility, or lack of it, with the current norms in the international tax system – specifically, the current tax treaty network. This paper argues that unitary taxation is compatible with most of the current bilateral tax treaties and local countries’ national tax laws. More details

IDS publications on international development research

Taxation, Non-Tax Revenue and Democracy: New Evidence Using New Cross-Country Data

ICTD Working Paper 23 (2014)

A large body of cross-country econometric research has investigated the possibility of a political resource curse, by which access to extensive natural resources reduces the extent of democracy and accountability. More details