In 2020, the financing needs of developing economies, particularly those most affected by global warming and the COVID-19 public health crisis, have never been higher. As such, the capacity of States to generate and collect their own revenues has become a major challenge for developing countries.
With a view to supporting the efforts of tax and customs administrations in developing countries, the French Ministry for Europe and Foreign Affairs and Ministry of the Economy and Finance have produced a strategic guidance document. This strategy sets down the priorities of French cooperation policy to support better domestic resource mobilization in developing countries.
The Interministerial Strategy 2020 – Support for improved domestic resource mobilization in developing economies was officially adopted by the Interministerial International Cooperation and Development Committee (CICID) on 8 February 2018 and focuses on three objectives:
- Creation of more efficient tax policies;
- Modernization of tax administrations in partner countries;
- Optimization of cooperation instruments.
In order to ensure the success of the strategy’s implementation, a technical roadmap has also been drawn up: the strategic investment plan for development endowed with a four-year budget of more than €60,000 for the 2020-2023 period.
Together, the strategy and investment plan aim to create a virtuous circle so as to strengthen domestic taxation in the beneficiary countries of official development assistance. The strengthening of these countries’ financial resilience is key to ensuring the sustainability of their public policies and to achieving the Sustainable Development Goals (SDGs) set down in the UN 2030 Agenda for Sustainable Development.
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Strategic investment development plan 2020-2023
This investment plan, to which France allocated €60 million between 2020 and 2023, aims to finance bilateral and multilateral initiatives to increase the mobilization of domestic resources in sub-Saharan Africa. Made up of fiscal (duties and taxes) and non-fiscal (charges, operating the extractive sector) revenue, public resources enable countries to fund their development strategies. They consolidate States and their macroeconomic stability by helping finance their public services, strengthening their administrations and reducing dependence on foreign assistance. The investment plan is thus essential for developing economies in their response to the global health crisis as it provides direct support for mobilizing domestic resources and for fiscal policy in general.
Last updated Sept. 2020