When it comes to collecting revenues, many countries in the developing world are caught in a vicious cycle. Impediments range from widespread informality to tax evasion from elites and a dearth of tax administration skills. The lack of domestic resources from fair and efficient taxation impairs governance which, in turn, impairs tax compliance.
But where there is a vicious circle there can be a virtuous one, argues this book. ‘Tax and Development: Aid Modalities for Strengthening Tax Systems’ is a timely response to the growing awareness of the potential mutually beneficial links between taxation and governance. It examines the aid instruments that donors can use to assist developing countries in strengthening their tax systems.