“Increased tax revenues will better enable poor countries to finance their own development and make them less dependent on external assistance,” Ms Fiskaa explained at the launch. Zambia, Mozambique and Tanzania are the first three countries Norway is cooperating with for the Taxation for Development program.
“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,” Ms Fiskaa said. In Norway tax revenues account for 44 per cent of GDP, while in many poor countries in Africa they account for less than 15 per cent. State Secretary Ms Fiskaa hopes that the new program will help to improve tax collection in the program countries and foster greater political engagement.
Many developing countries are rich in natural resources. These recourses are often exploited by international companies, and only small shares of their profit benefits the host countries 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,” Ms Fiskaa said.
The Taxation for Development Program focuses on the four following 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 and encouraging public debate and interest in issues related to taxation and capital flight.