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Taxation is the main source of revenue for governments and funds vital public services and infrastructure. Tax also has significant impacts on individuals and businesses, affecting their incomes, incentives and behaviour. Effective tax policy and administration are therefore key building blocks of economic growth, economic development and well-functioning government. But effective policy-making relies on evidence on the impacts of different policies on revenues, and the incomes and behaviour of taxpayers. Research, analysis and analytical capacity are therefore vital.

The Centre for Tax Analysis in Developing Countries (TAXDEV) at the IFS is funded by the UK’s Department for International Development (DFID) and aims to contribute to more effective tax policy-making in low- and middle-income countries through applied research and policy analysis and a focus on improving the analytical capacity of governments. The centre was established in response to the relative paucity of theoretical and empirical evidence in relation to tax policy in low- and middle-income countries.

TAXDEV was officially launched on 1st February 2016. Its work programme consists of two main components:

Country Partnerships

  • The first component of our work involves collaborating with governments and other stakeholders in Ethiopia and Ghana to co-produce modelling tools and analyses of the key tax and benefit policy and administration issues these countries face. As well as informing decisions in particular policy areas, this co-production methodology will help foster in-country analytical capacity and help embed quantitative analysis of policies in the policymaking and evaluation process.

Broader Research

  • The second component of the work programme is broader research on taxation in low- and middle-income countries. The focus is on understanding how changing economic and administrative constraints affects what makes good tax policy as countries develop and exploring the impacts of tax policies and administration systems on revenue raising capabilities, households, businesses and the economy. This builds on existing research, new empirical and theoretical findings, and outputs from the analyses generated in Ethiopia and Ghana. In June 2016, we published a document which introduced four areas of research which have informed the development of our research agenda for this component.

This website is updated to include information on specific projects and outputs as they are developed and published. In addition, TAXDEV builds on the research and analysis of tax and benefit policies in low- and middle-income countries undertaken by IFS for a number of years.