IDS: Taxes Help Spur Development

IDS: Taxes Help Spur Development: "“Well, it’s not really the case. Even low-income countries have a tax base. It’s not as big as the tax base in the U.S. or the U.K., but it’s quite substantial and it’s not always tapped into very well," he said. "So, there is certainly scope for doing better there.”

The IDS professorial fellow said building taxation capacity in a low-income country does not necessarily mean taxing poor people.

“There’s a great deal of tax evasion and the worst tax evasion happens in low-income countries is not actually poor people. But it’s because there are a lot of unrecorded transactions in the economy," he said. "Doctors, lawyers, consultants, dentists, artists, architects – professional people of all kind operate on a cash basis and they don’t pay taxes. Large numbers of people own a lot of property. Property taxes are extremely low in most low-income countries.”"



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