Taxation with Representation: Citizens as drivers of accountable tax policy

Throughout history, taxation has been controversial and often dramatically contested. Yet today it is accepted as one of the primary ways for governments to increase domestic revenue in order to better meet the basic needs of citizens.

Particularly in an era of flat foreign assistance allocations, policymakers around the world are needing, and seeking, alternative sources of finances. Domestic resource mobilization (DRM) is seen as the largest and most sustainable public source of development finance, as well as a prerequisite for achieving the United Nations’ Sustainable Development Goals (SDGs).

But there is no direct link between increased taxes and better development outcomes. Increasing DRM can actually increase inequality and increase poverty, depending on how it’s formulated and implemented. This is because equitable DRM is as much about how, as it is about how much.

To ensure that tax policy is pro-development, and contributes to enhanced governance, a broad representation of citizens’ voices must be included in that tax policy’s development and execution. To create a tax system that is representative of broad societal goals, factors such as gender, ethnicity, geography, and language must all be considered. While technical experts should, and will, continue to play a central role in tax policymaking, DRM will fail to achieve its potential as a key source of finance to achieve the SDGs if it’s pursued without citizen input, and without prioritizing equity.

The goal of this report is to analyze evidence on citizen tax advocacy in order to garner insights, and identify trends, on how civil society organizations (CSOs) have contributed to creating accountable and progressive tax policies in developing countries within the framework of equitably financing the SDGs.