A sustainable revenue base is a prerequisite for resilient and sustained economic growth. An efficient and well-administered tax system enables higher quality governance and creates an environment for the private sector to flourish. Increasing Domestic Resource Mobilisation (DRM) is also integral to financing the 2030 Agenda for Sustainable Development and the Financing for Development Addis Ababa Action Agenda.
In recognition of this, Australia is proud to be a founding member of the Addis Tax Initiative (ATI). The ATI commits Australia to doubling our support for technical cooperation in the area of taxation and DRM in developing countries from $16 million in 2014-15 to $32 million by 2020.
Australia’s DRM work will be guided by the Framework for supporting tax policy and administration through the aid program. This framework sets out our approach to increasing support for tax policy and administration reform in partner countries to meet our commitment to the ATI. It also aligns with Australia’s aid policy, which identifies a role for the aid program in developing the capacity of countries to mobilise domestic resources.
The framework describes the following approach to support effective investments in tax policy and administration:
- Underpin investments with thorough political and economic analysis.
- Prioritise working with partner governments to strengthen their revenue to gross domestic product (GDP) ratios and the fairness and sustainability of their tax systems.
- Promote international tax norm-setting processes that engage with developing countries in the Indo-Pacific region.
- Advance policy coherence on tax issues across Australia’s domestic and international policy spheres.