Domestic revenue mobilisation

The issue

Domestic public resources are a crucial source of finance supporting the attainment of the SDGs, with widespread recognition of the potential for governments to increase the scale of this resource through improved domestic revenue mobilisation (DRM).

The way in which domestic revenue is mobilised is important. For example, taxes have the potential to improve or deepen inequality, or can influence behaviours to improve environmental and health outcomes. Despite this potential and the significant political attention DRM receives globally, nationally and sub-nationally, actions to support it (such as international tax cooperation and technical assistance) are not widespread, and progress has been mixed.

The purpose of our work

We have been working on DRM since 2014 in a number of different ways.

Measuring progress on DRM and the use of official development assistance (ODA) to support it: We help state and non-state actors develop a clearer understanding of the current quantifiable evidence on the status of DRM. Firstly, we do this by providing data and analysis on governments’ progress and medium-term outlook on domestic public resources. Secondly, we provide analysis for development partners who are aiming to support DRM through ODA.

Outlining opportunities for improving DRM and development partner support: We assess opportunities to improve the scale and quality of DRM, as well as how to better support such efforts. Our evidence helps governments and donors understand what improvements they could be making in mobilising a greater volume of domestic revenue.

Our impact

We have provided support on DRM to a number of governments in Asia, including for Myanmar, Lao PDR, Vietnam, Philippines, Thailand and Indonesia, through our Development Finance Assessments (DFAs). This work identified and made recommendations for how governments could improve quality and effectiveness through better financing frameworks and strategies such as medium-term revenue plans and environmental taxation. We have also undertaken other country-level work in Ethiopia, Kenya, Nigeria, Pakistan and Uganda, which has helped non-state actors advocate for governmental reforms to DRM structures, policies and strategies.

In assessing development partner support to aid for DRM, our work has ranged from providing global analysis on ODA for DRM disbursement and how systems for monitoring and reporting must improve to country-level analysis in Kenya and Uganda on how ODA is stimulating DRM.

More recently, we have worked in close collaboration with other experts in the field to help create better understanding of DRM and presented at events such as the UN Development Cooperation Forum, Financing for Development forum and the Stockholm Tax Conference. We have made recommendations on how to strengthen domestic resource mobilisation in low-income countries and fed into the Addis Tax Initiative Conference with thought leadership on how development partners seeking to improve tax systems can accelerate progress and produce more equitable outcomes.

Our unique research has made a significant contribution to evidence on ODA for DRM and its effectiveness. Through our programme of research in this area we have been able to provide a briefing to answer the fundamental question; is ODA for domestic resource mobilisation working? We have also published more in-depth analysis in our full report on ODA for DRM: progress, prospects and opportunities for effective support.