Responding to the first draft of the Financing for Development outcome document, this brief puts forward recommendations for ten priority areas of domestic resource mobilisation.
Domestic resource mobilisation is the primary and most sustainable source of financing for development. The Fourth International Conference on Financing for Development (FfD4), represents a tremendous opportunity to renew ambition and define the agenda on raising tax revenues in a way that is equitable, efficient, and sustainable.
The first draft of the outcome document offers a good basis on which to build a constructive consensus. In particular, we welcome:
- the call for development partners to double their support for domestic resource mobilisation and public financial management by 2030;
- the commitment to strengthen progressivity in tax systems, including the taxation of high-net-worth individuals;
- the inclusion of gender equality as an imperative, and the commitment to promote taxation and budgeting that advance this;
- the addition of a commitment on the effective taxation of natural resources;
- the strengthened commitment to phase out fossil fuel subsidies, while noting that the loophole word “inefficient” should be removed;
- the commitment to ensuring equitable benefits and addressing the specific needs of developing countries in international tax cooperation; and
- the commitment to enhance beneficial ownership transparency through effective registries.
As negotiations progress towards the conference in Seville, it is important to safeguard these commitments, while also adapting the text to better ensure success. Priorities include:
- adding a focus on enforcing existing laws when it comes to taxing the wealthy;
- On integrating the informal sector, adding language to focus efforts on undeclared income and wealth and protecting the lowest income earners;
- encouraging the collection of sex-disaggregated data to support gender-responsive policy making;
- including a commitment to rationalise and implement minimum standards for reporting on tax expenditures;
- adding language on data governance and the protection of citizen rights in relation to digitalisation;
- adding a reference to own source revenue collection in the section on subnational finance; and
- adding a commitment on health taxes, as an efficient way to advance health and revenue goals.
This brief puts forward suggested language for ten priority areas of domestic resource mobilisation, along with brief explanations for why these changes matter for the financing for development agenda and links to key supporting resources.
