Norway launches Taxation for Development program

Today State Secretary Ingrid Fiskaa launched the new Taxation for Development programme, which is aimed at helping poor countries to increase their own tax revenues.

Photo: Christian Grotnes Halvorsen

“Increased tax revenues will better enable poor countries to finance their own development and make them less dependent on external assistance. The intention has never been that taxes in recipient countries should be replaced by aid,” said Ms Fiskaa.

The new programme focuses on four areas:
• helping partner countries to devise better systems for collecting taxes from citizens
• carrying out research on taxation and capital flight and sharing the findings with poor countries
• cooperating at international level on issues related to taxation and capital flight
• encouraging public debate and interest in issues related to taxation and capital flight

Zambia, Mozambique and Tanzania are the first three countries Norway is cooperating with in this field.

“We have developed good tax collection systems in Norway. The Norwegian model cannot be transferred wholesale to these countries, but we have valuable expertise we can share with them,” said Ms Fiskaa.

State Secretary Fiskaa presented the programme launch at the Development House in Oslo.
Photo: Christian Grotnes Halvorsen

Many poor countries are rich in natural resources, which are exploited by international companies at a great profit. This is particularly true now, as raw material prices are high and rising. However, very little of this wealth and value creation benefits the countries concerned in the form of tax revenues.

“In many cases the problem is that exemptions create huge loopholes in their tax systems. Many companies and individuals pay almost no tax. If the rich get away with paying little or no tax, there is little incentive for others to pay their share,” said Ms Fiskaa.

In Norway tax revenues account for 44% of GDP. In many poor countries in Africa, they account for less than 15%. State Secretary Fiskaa hopes that the Tax for Development programme will help to improve tax collection in Norway’s partner countries and foster greater political engagement.

“Those who contribute to the public purse by paying tax will also be concerned about how the tax revenues are used,” Ms Fiskaa added.

Pictures from the launch are available at flickr.