Domestic Resource Mobilization Underpinning Sustainable Development - - PowerPoint PPT Presentation

▶
domestic resource mobilization
SMART_READER_LITE
LIVE PREVIEW

Domestic Resource Mobilization Underpinning Sustainable Development - - PowerPoint PPT Presentation

Dec 12, 2023 272 likes •547 views

Domestic Resource Mobilization Underpinning Sustainable Development Kenneth A. Lanza Director Grant Thornton, LLC December 6, 2016 I. DRM Defined II. Development Priorities III. Funding the SDGs IV. Role of Donors V. Moving Forward 2 I.

slide-1
SLIDE 1

Kenneth A. Lanza Director Grant Thornton, LLC December 6, 2016

Domestic Resource Mobilization

Underpinning Sustainable Development

slide-2
SLIDE 2

I. DRM Defined

  • II. Development Priorities
  • III. Funding the SDGs
  • IV. Role of Donors
  • V. Moving Forward

2

slide-3
SLIDE 3
  • I. DRM Defined
  • What it is:

1. Is a mix of Tax Systems. 2. Is Focused on increased capture of domestic revenue sources-including debt—either through efficiency gains, raising rates, or expanding the base. 3. Is accountable, efficient and transparent processes.

  • What it is not:

1. Not singularly about increasing rates. 2. Not the only solution to enhancing state revenue for social investment. 3. Not simple or easy to implement.

3

slide-4
SLIDE 4
  • II. Development Priorities

Sustainable Development Goals (SDGs)

4

slide-5
SLIDE 5
  • II. Development Priorities

5

A Different Perspective

Source: Global Poverty Research Centre 2008-2009

slide-6
SLIDE 6

CPA Actual 2014 2015 2016 2017 2018 Europe 5,543 $ 4,501 $ 4,723 $ 4,800 $ 4,648 $ Africa 45,942 $ 47,068 $ 48,243 $ 47,910 $ 47,599 $ America 8,681 $ 7,964 $ 8,143 $ 8,083 $ 7,883 $ Asia 43,294 $ 44,866 $ 45,314 $ 45,648 $ 45,347 $

Middle East 9,970 $ 10,203 $ 10,021 $ 10,106 $ 10,096 $ South and Central Asia 21,022 $ 22,255 $ 22,664 $ 22,769 $ 22,593 $ Far East Asia 11,518 $ 11,456 $ 11,634 $ 11,758 $ 11,611 $ Asia, regional 784 $ 952 $ 995 $ 1,015 $ 1,047 $

Oceania 1,820 $ 1,883 $ 1,912 $ 1,935 $ 1,964 $ Thematic assistance

  • $

1,721 $ 1,770 $ 1,800 $ 1,534 $ Total 105,280 $ 108,003 $ 110,104 $ 110,176 $ 108,975 $ Constant 2013 USD million Region CPA Planned

  • III. Funding – Official Development Assistance

Country Program Assistance (CPA)

6

Source: OECD 2015

slide-7
SLIDE 7
  • III. Funding – Official Development Assistance

Total 2014 Net ODA Flows from Donor Countries

7

Source: OECD 2015

slide-8
SLIDE 8
  • III. Funding – Official Development Assistance

Financing the SDG Gap: Annual Funding Requirements (billions of 2013 US$)

8

Source: UN Sustainable Development 2015

slide-9
SLIDE 9
  • III. Funding – Official Development Assistance

Financing the SDG Gap: Annual Funding Requirements (billions of 2013 US$)

9

slide-10
SLIDE 10
  • III. Funding – DRM Donors

10

Source: 2014, Development Initiatives, OECD DAC Data

slide-11
SLIDE 11
  • III. Funding – DRM Donors

Source: 2014, Development Initiatives, OECD DAC Data

11

slide-12
SLIDE 12
  • 1. Broaden the Tax Base
  • IV. Role of Donors
  • 2. Develop Institutional Capacity
  • 3. Address Corruption-Efficiency
  • 4. Manage the Political Economy of Reform
  • 5. Increase Growth-Competitiveness

12

Key DRM Objectives

slide-13
SLIDE 13
  • IV. Role of Donors

With gradual and incremental changes in tax laws in pursuit of higher tax revenues,tax structures often become complex in

  • nature. Sometimes

governments go for minor taxes and fees that are costly to comply with and administer.

13

Broaden the Tax Base

slide-14
SLIDE 14
  • IV. Role of Donors

Some countries with a VAT continue to have the old mindset. .

14

Broaden the Tax Base

slide-15
SLIDE 15
  • IV. Role of Donors

The Personal Income Tax (PIT) is generally weak and poorly managed. In developing countries, there is always a pressure on government for granting exemptions by interest groups under all taxes.

15

Broaden the Tax Base

slide-16
SLIDE 16

The corporate income tax (CIT)

  • ften has a narrow base

focusing on foreign and large domestic companies. CIT on multinationals is always a concern as they have greater avenues for profit-shifting, transfer pricing and tax avoidance.

  • IV. Role of Donors

16

Broaden the Tax Base

slide-17
SLIDE 17
  • IV. Role of Donors

17

Broaden the Tax Base: Medium rates of taxation by country income Group

slide-18
SLIDE 18
  • IV. Role of Donors

18

Develop Institutional Capacity

slide-19
SLIDE 19
  • IV. Role of Donors

19

Develop Institutional Capacity

slide-20
SLIDE 20
  • IV. Role of Donors

20

Efficiency – Addressing Corruption

slide-21
SLIDE 21
  • IV. Role of Donors

21

The Political Economy of DRM

slide-22
SLIDE 22
  • 5. Human Capital
  • 4. Infrastructure
  • 3. Institutions
  • 1. Personal Security
  • 9. Technological

Readiness

  • 8. Financial Market

Efficiency

  • 7. Labor Market Efficiency
  • 6. Goods Market Efficiency
  • 2. Macroeconomic Stability

Investment Economy Factor Economy Innovation Economy

  • 10. Openness and

Market Size

  • 11. Business

Sophistication

  • 12. Innovation
  • IV. Role of

Donors

22

Competitive Economic Growth

slide-23
SLIDE 23

Investment Economy Factor Economy Innovation Economy

  • IV. Role of

Donors

Factor Economy: GDP P/C=$2000-2,999 52 countries (17 in transition) Investment Economy: GDP P/C=$3000-17,000 49 countries (19 in transition) Innovation Economy: GDP P/C= >$17,000 37 countries

2016-2017 Global Competitiveness Report, World Economic Forum

23

Competitive Economic Growth

slide-24
SLIDE 24
  • IV. Role of Donors

24

Competitive Economic Growth

slide-25
SLIDE 25
  • V. Moving Forward

1. Focus on basics before tacking more difficult reforms. 2. DRM will contribute to the SDG funding gap. 3. Broad-based, sustainable, economic growth is the only way to increase and sustain a tax base 4. Countries that have demonstrated the political will for DRM reforms should be prioritized. 5. Donors should follow government leadership 6. Programs should balance revenue collection with fairness, equity and governance considerations. 7. Transparency and broad-based dialogue should characterize all aspect

  • f DRM programs

8. Reforming and sustaining revenue collection institutions. 9. Programs should strengthen linkages between revenue and expenditures

  • 10. Take account of the international aspects of taxation.

25

10 Lessons Learned for Donors Engagement in DRM

slide-26
SLIDE 26

International Development Organizations Team

Scott King

Managing Principal, IDO T: +1 210.881.1802 E:Scott.King@us.gt.comscott.king2 @us.gt.com

Ken Lanza

Director, Global USAID Account, IDO T: +1 703 637 3090 E: Ken.Lanza@us.gt.com en.lanza@us.gt.com

Veronique Duchez-Pazhwak

Manager, IDO T: +1 703.637.2781 E: Veronique.Duchez-Pazhwak@us.gt.com veronique.duchez-pazhwak@us.gt.com

Melanie Douds

Manager, IDO T: +1 703.562.5912 E: Melanie.Douds@us.gt.com melanie.douds@us.gt.com

26