UNU-WIDER and ATI launch innovative Tax Gap Toolkit
This article was originally published by UNU-WIDER.
The United Nations University – World Institute for Development Economics Research (UNU-WIDER) in collaboration with the Addis Tax Initiative (ATI), is launching a Tax Gap Toolkit on 10 December 2024. This innovative toolkit allows tax authorities and policymakers to regularly and systematically estimate tax gaps for value added tax, corporate income tax, and personal income tax.
A launch event is organised on 10 December, at 2pm (CET) to introduce the Tax Gap Toolkit and demonstrate its features and functionalities. A discussion led by the International Monetary Fund (IMF) will follow to explore the potential impacts of the toolkit on tax policy and administration.
About the toolkit
Mobilising domestic revenue is crucial for supporting economic growth, reducing inequalities, and providing essential public services, and efficient tax systems are essential for achieving this goal. Tax gap analysis is a critical component of this effort.
The Tax Gap toolkit is a global public good developed in partnership with the Addis Tax Initiative, to support the realisation of the ATI Declaration 2025. The toolkit estimates the difference between the potential tax revenue and the actual tax revenue collected, providing revenue authorities and policymakers with a measure of the amount of tax revenues lost or forgone due to non-compliance. Conducting a tax gap estimation enables authorities to inform better allocation of limited resources and develop strategies to combat or reduce significant tax gaps and improve tax collection.
The toolkit builds on UNU-WIDER research in Zambia and Tanzania under their Domestic Revenue Mobilisation programme.
Mobilising domestic revenue is crucial for supporting economic growth, reducing inequalities, and providing essential public services, and efficient tax systems are essential for achieving this goal. Tax gap analysis is a critical component of this effort.
About UNU-WIDER
The United Nations University World Institute for Development Economics Research provides economic analysis and policy advice with the aim of promoting sustainable and equitable development for all.
Based in Helsinki, Finland, for over 30 years, UNU-WIDER has combined the roles of a think tank, research institute, and UN agency - providing a range of services from policy advice to governments as well as freely available original research. Its mission is to conduct research and policy analysis on critical issues affecting the living conditions of the world’s poorest people, facilitate dialogue between researchers and development professionals on how to achieve equitable, gender-balanced, and environmentally sustainable policies, and provide capacity development and training for researchers and decision-makers in economics and social development.
Partners
The Tax Gap toolkit was developed with support from the International Tax Compact (ITC), which facilitates the Secretariat of the ATI. The ITC is funded by the German Federal Ministry of Economic Cooperation and Development, co-funded by the European Union, and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
This work is part of UNU-WIDER’s Domestic Revenue Mobilisation programme, which is funded by Norad – The Norwegian Agency for Development Cooperation.
Links of interest:
The ATI Tax Gap Community of Interest (CoI): a collaborative effort for enhanced tax collection.