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Home About the IFS IFS announcements Centre for Tax Analysis in Developing Countries (TAXDEV) funding renewed until November 2022

Centre for Tax Analysis in Developing Countries (TAXDEV) funding renewed until November 2022

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The Department for International Development (DFID) has renewed funding for the Centre for Tax Analysis in Developing Countries (TAXDEV) until November 2022. TAXDEV is based at the Institute for Fiscal Studies and aims to contribute to more effective tax and social protection policy-making in low- and middle-income countries.

The second phase of TAXDEV will be delivered jointly by the IFS and the Overseas Development Institute (ODI), who have a long track record of building the capability of governments to develop, implement and evaluate tax and spending policies.

TAXDEV provides applied research, policy analysis and capacity building in collaborative partnerships with partner governments. In the first two years of the programme, IFS researchers worked closely with government partners in Ethiopia and Ghana to support the use of evidence in formulating and evaluating tax policies. Working together with civil servants in Ethiopia and Ghana, TAXDEV produced new modelling tools, including models to assess the distributional impacts of changes to tax and spending policies. This allowed Ghanaian officials to estimate which type of households would be impacted by updates to income tax thresholds, as well as the overall revenue effect. IFS researchers also provided structured training on specific approaches to tax policy analysis and broader data analysis skills.

Furthermore, the Centre funded broader research on taxation in low- and middle-income countries. This included new evidence on the distributional effects of preferential VAT rates, analysis of how simplified tax regimes could improve compliance and boost revenues, and on the prevalence and impacts of corporate tax incentives.

Renewed funding for TAXDEV will support continued collaboration with partners in Ethiopia and Ghana and expansion to two new countries, where TAXDEV will use the same collaborative model for policy research and technical capacity building. It will also enable the Centre to develop and expand the range of novel, high quality and relevant research on tax and social protection policymaking in low- and middle-income countries that it undertakes and supports.

Paul Johnson, IFS Director, said:

"The first two years of TAXDEV allowed the IFS to forge strong relationships with partner governments, develop and implement new models and tools, and generate important evidence on tax policy in low- and middle-income countries in collaboration with our research network. This renewed funding, and expertise from the ODI, will allow us to build on this progress and to expand the scope of our research and analysis. This will help governments raise tax revenues in fairer and more efficient ways that support their development goals. We thank the DFID for their continued support for this important work."

Simon Gill, acting Executive Director of the Overseas Development Institute, said:

"The ODI is delighted to be working in partnership with the IFS on the TAXDEV programme, which has already helped government partners in Ethiopia and Ghana to make evidence-based tax policy decisions to boost their development aims. We are looking forward to continuing our collaboration with country governments to build technical capacity and to ensure that tax and social protection policymaking is carried out for the benefit of all."

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