A reflection on the ATI/ITC Tax and Development Conference 2019

By Frederik Heitmüller

From July 1st to July 4th, representatives of tax administrations, finance ministries, development cooperation organizations, researchers and civil society organizations met in Berlin to discuss the relationship between taxation and development. The ATI/ITC[1] meeting was part of a series of conferences organized in connection with the Addis Tax Initiative.

In these few lines, I want to record some of my impressions. They do not aim at giving an exhaustive summary of the conference, but I rather want to highlight two topics that spurred my interest and that I was involved in, namely the coordination of technical assistance efforts and the processes of standard-setting in international tax.

What is the Addis Tax Initiative?

In 2015, heads of states, ministers of Finance and representative of multilateral institutions met at the UN Financing for Development Conference in Addis Ababa to discuss how the 2030 Sustainable Development Agenda should be financed. In addition to traditional budget support transferred from mainly members of the OECD to countries in the developing world, they agreed that domestic resource mobilization – meaning taxes – should play a more important role. Some states (donor and developing countries) agreed to collaborate more closely towards this goal in the Addis Tax Initiative. Participating donors agreed that technical assistance to tax administration and tax policy issues in developing countries should be enhanced – they committed to spend twice as much by 2020 on technical assistance related to domestic resource mobilization compared to 2015. On the other hand, developing partner countries promised to make more efforts to mobilize domestic resources. Finally, the third – and probably the most difficult to achieve – goal was to increase policy coherence. Policy coherence means in essence that other policies enacted by the same stakeholders (donor and partner countries) should not harm increasing domestic resource mobilization.

What happened in Berlin?

The conference in Berlin featured panel discussions, breakout sessions with small group discussions, a marketplace with poster presentations and informal engagement among the participant. It aimed on the one hand at discussing and exchanging knowledge on policies related to domestic resource mobilization. On the other hand, the people involved reflected on the initiative, discussed its successes and problems and decided on a way forward. In addition, it functioned also as forum to connect people with each other and served as a platform where new projects could be initialed.

More coordination within the technical assistance community

Many stakeholders noted a lack of coordination among the many efforts to increase domestic resource mobilization. They pointed out that this could  lead to a misallocation of resources and to difficulties among the recipients of technical assistance, which might get redundant or conflicting advice. Participants at the conference therefore called for more rationalization and coordination of the support system – both on the side of donors as well as on the side of revenue administrations being assisted. It was suggested that regional tax organizations could play a crucial role, since they are often well informed on the individual needs of their member countries and are well connected will international institutions and development agencies.

One might nevertheless ask whether perfect coordination would be always desirable since there might be different opinions on what policies work effectively for domestic resource mobilization (think of questions such as for example whether to focus efforts on VAT, PIT, CIT, excises, etc.). Whether such differences in opinions should be “coordinated away” is a question. One might think of the “Washington Consensus” of the 1990s and its one-size-fits-all economic policy solutions, which proved to be not necessarily beneficial for all countries. In particular with regards to more policy-related aspects of domestic resource mobilization, a plurality of technical assistance offers and some level of redundancy might therefore not always be harmful for an administration or ministry that receives the advice.

We can consider this together with another comment that frequently came up in discussions during the conference, namely that the question of how much tax revenue should be raised from whom and through which procedures as the answer may be highly political. In contrast, these questions were mainly discussed in an apolitical, technical manner – increased coordination and work sharing could increase the technicity of the debate.

International standards and the voice of developing countries

Breakout sessions during the conference touched on many different topics such as tax incentives, digitalization of tax administration and the role of the civil society in domestic resource mobilization.

The GLOBTAXGOV project facilitated one breakout session on how to make the creation of international tax standards more inclusive.

Standard setting in international tax matters has for a long time mainly been driven by the OECD Secretariat and the Committee on Fiscal Affairs at the OECD. This process has been considerably enlarged to include more than 130 countries from all regions of the world in the Global Forum on Transparency and Exchange of Information for Tax Purposes and more recently in the Base Erosion and Profit Shifting (BEPS) Inclusive Framework, which are hosted by the OECD. After the introduction of the four BEPS minimum standards in 2015, new standards (labeled as “BEPS 2.0”) on the allocation of profits of digitalized businesses and on global minimum taxation are now discussed at meetings of the Inclusive Framework.

The question of how to make the creation of standards more inclusive is a highly procedural question – there is indeed not much knowledge about the concrete impacts of any policy proposals on developing countries, since each proposal is complex and the concrete effects of their adoption depend on the interplay on many factors. Some argue for example that more taxing rights for market jurisdictions would be beneficial for developing countries while others disagree with such a view. Thus, the discussion is more focused on the process itself.

Despite the formal inclusiveness of an institution in terms of its membership, the actual dynamics that lead to a consensus decisions of actors cannot be described as mathematical calculation of an average of each participant’s interest, but rather as a negotiation process the dynamics of which can depend on many factors. The discussion took off from the general perception that developing countries (although they outnumber developed countries) are disadvantaged in these dynamic processes. What the factors causing the disadvantages are and how they can be alleviated was subject of the discussion in the breakout session.

One of the issues raised in the session is speed. We could learn during the discussion that even highly sophisticated finance ministries of European countries may struggle in rapidly analyzing various of the policy options discussed and in formulating an opinion thereon. This should be an indication that the speed of the decision-making process  is too high. The same is true for many countries on the implementation side –  Nevertheless, this should not be understood as a call to endlessly slow down these processes. With regards to implementation processes of international standards, officials in finance ministries also need internationally imposed deadlines to raise sufficient resources and political support to undertake the reforms within their respective organizations.

A second issue is language (in relation to the issue of speed). While many officials from many countries are fluent in English, the major international language, this is not the case for all countries. Policy documents are mostly also released in French, and sometimes in Spanish and other languages, however, always with a time lag, which exacerbates the previously noted issue of speed. Therefore, language can be a barrier and a disadvantage to a state. On a more general level, the same legal concepts expressed in English might be understood in different ways by people with different native languages and different entry points to the English language.

A third issue is the decision-making power of representatives. In international negotiation settings, people might come together that have different ranks within the countries and organizations they represent. Some might have the capacity of making authoritative decisions, others not. Sometimes countries send different people to each negotiation session. Greater consistency and trust in the fact that an official can “speak for his/her country” might be important for a country to assert its interests in a negotiation.

All these challenges are interrelated, dealing with them depends on personal formal skills, resources in the country and also on understanding what is actually going on in international standard-setting processes. Maybe a future field for technical assistance?

[1] ATI stands for Addis Tax Initiative. ITC stands for International Tax Compact, which is an informal platform for collaboration on issues related to domestic ressource mobilization, hosted by the German Development Agency (GIZ), see https://www.taxcompact.net/mission



  1. Dear Frederik,

    Thank you for your insightful comments on the Conference.
    Regarding the dynamics of the decision-making and implementation processes, I found very interesting the three points you have highlighted: speed, language, and imbalances in the composition of the national delegations. Is there already a structured discussion on how to overcome these constraints?

    1. Dear Giovana,
      thanks for your comment – as far as I am aware, there is no such structured discussion yet (although I would be grateful on any hints, should I have missed this). I also believe, it would be interesting to research whether such issues have been discussed (and maybe overcome) in other international regimes, since they seem to be problems inherent to international cooperation (and not only international tax cooperation).

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