K4D Helpdesk Report 079

Impacts of Tax Capacity on Development Outcomes

Published on 11 March 2017

There is increasing recognition that strong tax systems can have impacts on economic growth, the sustainability of revenues for expenditure, state-building, and inequality, although there are debates about the trade-offs to achieving these differing and sometimes incompatible objectives.

Tax revenue appears to be more likely to be used to support broad development goals than revenue from grants or from natural resources. However, state capacity improvements and civil society engagement are important to help ensure that tax revenues improve development outcomes. Mick Moore cautions that the developmental impacts of tax reform may be difficult to discern because “there are very few countries where revenue reform has been effective and sustained over long periods of time”.

Cite this publication

Lucas, B. (2017). Impacts of tax capacity on development outcomes. K4D Helpdesk Report. Brighton, UK: Institute of Development Studies.

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published by
Institute of Development Studies
Lucas, Brian


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