Research in Brief 135
Low-income countries (LICs) are looking at the potential of environmental taxes – such as charges on air pollutants, levies on household waste, and taxes on energy use – to increase revenue and tackle environmental issues. LICs are slow to adopt environmental taxes, and international financial institutions, multilateral development banks, and international donors are helping LIC governments assess them. Little is known about the institutional, administrative, and political obstacles leading to slow adoption of environmental taxes, and how these taxes can be made more appealing, especially in sub-Saharan Africa.
This paper reports evidence from 16 in-depth interviews with ministries of finance, revenue authorities, and other government stakeholders in six African countries. One key obstacle is the competing mandates and revenue-raising capacity of different ministries and agencies. There is concern that granting institutions new capacity to raise revenue might lead to meeting revenue targets being prioritised over conserving environmental resources. As a result, the public, politicians, and businesses may resist these policies being introduced.
Summary of ICTD Working Paper 177 written by Giovanni Occhiali.
