Will the Fund consider equity issues in its tax approach?

14 September 2011

In July NGOs ActionAid and Eurodad published a review of IFIs’ (International Financial Institutions) approach to taxation. The paper reviews a recent IMF paper and welcomes that for the first time the Fund publishes an official account of their approach to tax policy in developing countries. The review recognizes a ”softening of the IMF’s approach to the equity dimensions of tax”. However, ”it remains to be seen how these policy changes will be built on and translated into changes in practice on the ground”. A remaining concern is the ”IMF’s continued preference for regressive impacts of consumption taxes to be remedied through government spending despite admitting that the IMF has failed to adequately address this in the past.”