Q: What is the Addis Tax Initiative?
A: The Addis Tax Initiative (ATI) is a multi-stakeholder partnership that aims to enhance domestic revenue mobilisation (DRM) in partner countries and to improve the fairness, transparency, efficiency and effectiveness of their tax systems. Committing to the Addis Tax Initiative fosters partner countries’ efforts to increase reliance on domestic revenue to fund their development agendas and meet the Sustainable Development Goals (SDGs) by 2030.
Q: What is the aim of the Addis Tax Initiative?
A: The ATI aims to enable partner countries to more effectively mobilise their own resources for financing development and attaining the SDGs by increasing technical assistance and by stepping up efforts to enhance DRM as well as to ensure policy coherence for development. All countries subscribing to the ATI declare their commitment to enhance the mobilisation and effective use of domestic resources and to improve the fairness, transparency, efficiency and effectiveness of their tax systems.
The Addis Tax Initiative stresses the importance of promoting policy coherence, establishing strong domestic governance systems and mobilising the political will to drive forward tax policy and system reforms. It plays a coordinating role between its members to increase volume and quality of technical assistance and broad-based capacity building in partner countries.
Q: How does the Addis Tax Initiative work?
A: The Addis Tax Initiative was initiated in 2015 by the governments of Germany, the Netherlands, the United Kingdom and the United States in the course of the Third International Conference on Financing for Development in Addis Ababa, Ethiopia. The Secretariat of the Addis Tax Initiative is facilitated by the International Tax Compact (ITC) and all ATI activities are overseen by the ATI Steering Committee, which consists of representatives of development partners and partner countries.
The ATI assembles more than 44 countries and 16 supporting organisations that have committed to the following ATI commitments:
- ATI development partners commit to collectively doubling technical development cooperation to domestic revenue mobilisation by 2020.
- ATI partner countries commit to stepping up domestic revenue mobilisation as a key requirement for attaining the SDGs and spurring inclusive development.
- All ATI member countries commit to ensuring that domestic policies in partner countries reflect the objective of fostering the mobilisation of own revenues.
The Addis Tax Initiative provides a unique opportunity for its members to collaborate with each other and serves as a platform that enables the matching of needs for support with available resources. By making available an extensive DRM Database, regularly publishing monitoring reports and briefs on the progress made against attaining the ATI commitments, conducting research studies and organising conferences and workshops, ATI members can identify novel areas for DRM reform that may have remained unexplored by technical international development cooperation. The Addis Tax Initiative itself does not have funding to initiate or implement programmes in partner counties, which remains the responsibility of development partners and/or supporting organisations.
The annual monitoring report looks at the progress made against meeting the ATI commitments. It will provide all ATI signatories with the chance to elaborate on their progress, contribute best practices and lessons learnt as well as to provide an outlook on their future activities. For details on the monitoring of the ATI, please refer to the ATI monitoring framework.
Q: Who can participate in the Addis Tax Initiative?
A: All countries that
- provide development assistance to enhance domestic resource mobilisation (DRM) in partner countries,
- and/or are interested in receiving technical assistance for enhancing DRM in their country,
- and commit to the ATI Declaration,
can join the Addis Tax Initiative as ATI members and are invited to do so.
Non-governmental organisations that provide Official Development Assistance (ODA)-funded technical assistance in the area of DRM in partner countries and that endorse the objectives of the ATI can join the Addis Tax Initiative as supporting organisations.
Q: What are the benefits of participating in the Addis Tax Initiative?
A: Benefits for ATI partner countries:
- An ATI membership signals a strong interest in receiving technical assistance and support to domestic revenue mobilisation, encouraging ATI development partners to offer assistance without a prior official request.
- ATI partner countries benefit from an enhanced coordination of and collaboration among ATI development partners.
- ATI partner countries have the opportunity to connect with a broad international network of development assistance providers.
- ATI development partners help to integrate ATI partner countries into the global tax debate.
- With the support of ATI development partners and supporting organisations, ATI partner countries profit from the progress that has been made in the international tax agenda, such as the OECD/G20 Base Erosion and Profit Shifting (BEPS) project and tax information exchange via the Automatic Exchange of Information (AEoI).
- ATI partner countries get assistance in finding support for undertaking TADAT (Tax Administration Diagnostic Assessment Tool) assessments, in order to identify bottlenecks within their national tax administrations.
- ATI partner countries make a national commitment to undertaking DRM reforms at the highest level.
Benefits for ATI development partners and supporting organisations:
- ATI development partners and supporting organisations profit from an enhanced ability to connect with a broad international network of stakeholders active in the field of tax and development as well as countries committed to the spirit of the Addis Tax Initiative.
- ATI development partners and supporting organisations benefit from an improved coordination among development partners and partner countries alike, including south-south cooperation initiatives.
- ATI development partners and supporting organisations have the possibility to share best practices and lessons learned through the ATI Monitoring Report and regular consultations.
- ATI development partners and supporting organisations have the possibility to display the progress from DRM capacity building activities through the DRM Database.
ATI membership is not a prerequisite for partner countries to receive technical assistance, nor does it imply preferential treatment from ATI development partners. Giving up tax exemptions under ODA in partner countries is also not part of the scope of the ATI declaration.
Q: By joining the Addis Tax Initiative, do ATI partner countries automatically receive (more) DRM assistance?
A: While joining the ATI does not guarantee (more) development partner-funded DRM support, more than 20 development partners and 16 supporting organisations have pledged to fulfill the ATI commitments. Therefore, by becoming an ATI member, partner countries gain access to development partners specialised in, and generally interested in assisting with, DRM reforms. The ITC maintains a network of focal points in the ATI member countries and supporting organisations who can provide information about possibilities for cooperation on request.
Q: What are the implications of becoming an Addis Tax Initiative member?
A: Partner countries that join the ATI pledge to fulfill commitments two and three, effectively signalling their support for DRM as a key means of financing their development priorities and achieving the SDGs. Adhering to the ATI does not require meeting specific targets, however ATI partner countries are encouraged to share their DRM strategies and to actively contribute, where possible, to monitoring progress on DRM through national indicators.
Development partners that join the ATI pledge to fulfill commitments one and three, with progress towards commitment one measured through annual reporting of their international development assistance, including DRM (for more information see theATI monitoring framework). ATI development partners are also invited to share information regarding technical assistance projects and the types of DRM assistance they can provide to partner countries. Foregoing tax exemptions against ODA in partner countries is not a part of the scope of the ATI Declaration.
Both ATI partner countries and ATI development partners are included in all official ATI communication and are invited to participate and contribute to ATI activities and discussions. All ATI members are encouraged to actively support, present and advocate for the ATI.
Q: Are there any fees or other costs associated with joining the Addis Tax Initiative?
A: No, there are no fees or any other costs associated with joining or being a member of the ATI. There may however be financial implications in fulfilling the ATI commitments, for example in doubling technical assistance or in stepping up national efforts to enhance DRM.
Q: What is considered “support for technical cooperation” that ATI development partners are committing to double by signing up to the ATI (commitment 1)?
A: Support for technical cooperation includes all activities that contribute to DRM, as defined by the OECD DAC and CRS code list (code 15114), in countries and territories on the DAC List of ODA Recipients, delivered either bilaterally or through contributions to multilateral development institutions. This means:
"Support to domestic revenue mobilisation/tax policy, analysis and administration as well as non-tax public revenue, which includes work with ministries of finance, line ministries, revenue authorities or other local, regional or national public bodies."
Support for technical cooperation entails all transfers of resources, in cash or service forms, including the provision of experts to missions in countries that qualify for ODA.
Q: What if development partners wish to more than double their support for DRM projects?
A: There is nothing in the declaration that would stop development partners from going beyond doubling their support, with further support most welcome.
Q: What are the implications of becoming an ATI supporting organisation?
A: ATI supporting organisations are included in all official ATI communication and are invited to participate and contribute to ATI meetings and discussions. Supporting organisations are expected to participate in donor coordination activities, contribute to the annual ATI monitoring report and the online DRM project database to ensure its comprehensiveness and timeliness, including identifying good practices. Supporting organisations are invited to actively support, present and advocate for the ATI in their respective member countries, where possible and relevant.
Q: How can a country or organisation join the Addis Tax Initiative?
A: Countries can join the ATI by sending a letter of intent by email to the ITC declaring their intention to commmit to the ATI Declaration and nominating an ATI focal point.
Interested organisations should send an email to the ITC indicating their intention to join as a supporting organisation and nominating a focal point. The ITC will then forward the letter to the ATI Steering Committee for information and approval.
Q: Are there any formal requirements regarding the letter of intent for a country to join the Addis Tax Initiative?
A: The letter of intent should explicitly declare a country’s intent to commit to the ATI Declaration and to fulfil the ATI commitments. It should be signed by an appropriately authorised institution that can provide the political support necessary to fulfil the ATI commitments, such as the Ministry of Foreign Affairs, the Ministry of Finance or similar.
Q: Can countries join the Addis Tax Initiative as both a development partner and partner country at the same time? (i.e. simultaneously provide and receive support for DRM)
A: By becoming an ATI member, a country that provides DRM assistance to any other country will be considered an ATI development partner and commits itself to double this assistance (commitment 1). A country that plans to enhance its own DRM by receiving technical assistance will be considered an ATI partner country and is expected to follow (and report on) commitment 2.
Therefore, if a country provides development assistance while also seeking or receiving technical DRM assistance, it would be considered both an ATI development partner and an ATI partner country, and both commitment 1 and 2 would apply to that country (plus commitment 3, which applies to all ATI members).
Q: If a partner country decides not to join the Addis Tax Initiative, will it still be eligble to receive Official Development Aid?
A: Yes. Countries that do not join will still be eligible to receive ODA. That said, by joining the ATI, countries are sending a strong signal that they are committed to enhancing DRM as a means to financing sustainable development. This could potentially garner even greater offers of ODA support from development partners in the ATI.
Q: What does the governance structure of the Addis Tax Initiative look like?
A: AllATI activities are overseen by the ATI Steering Committee, which provides strategic guidance and monitors the progress made towards reaching the goals defined in the ATI declaration. The ATI Steering Committee is responsible for pursuing the objectives of the Addis Tax Initiative. This included ensuring that the monitoring and reporting on the ATI commitments are on track, cooperating closely with the Secretariat of the Addis Tax Initiative, consulting with the ATI members, and approving the annual monitoring report by the Secretariat of the Addis Tax Initiative.
The ATI Steering Committee consists of representatives of three development partners and of three partner countries. It is headed by two co-chairs, with one co-chair from a development partner and the other from a partner country. The Steering Committee members serve for one year, one time renewable. Currently, ATI Steering Committee consists of representatives from the following countries:
Contact person: Saleem Kashaf
Contact person: Hannah Schmelzer
Contact person:Mamadou Gueye
Contact person: Gunilla Näsman
- The Gambia
Contact person: Samba Sallah
- United States
Contact person: Steve Rozner
The International Monetary Fund (IMF), the World Bank, the Organisation for Economic Co-operation and Development (OECD), the African Tax Administration Forum (ATAF) and the Inter-American Center of Tax Administrations (CIAT) participate as observers to the ATI Steering Committee when required.
The ATI Steering Committee meets virtually and on an ad-hoc basis. If necessary, other ATI member countries or supporting organisations can participate as observers. To ensure transparency, minutes are taken at all meetings and provided to all ATI members.
Secretariat of the Addis Tax Initiative
The Secretariat of the Addis Tax Initiative is facilitated by the International Tax Compact (ITC), which is based in Bonn, Germany. As such, the International Tax Compact is responsible for all activities, including the support of the ATI Steering Committee, the outreach to potential new members, the support of ATI members and the monitoring of the ATI commitments.
Q: How does the monitoring of the Addis Tax Initiative work?
A: Details on the monitoring of the ATI commitments are outlined in the ATI Monitoring Framework.
The monitoring of commitment 1 will be based on OECD DAC statistics. There will be no additional quantitative reporting requirements for Commitment 1. Should a country join the ATI that does not report its ODA to the OECD DAC, then establishing proper reporting procedures will be determined on a case by case basis.