UK aid’s contribution to tackling tax avoidance and evasion
ICAI examined DFID’s efforts to influence the international tax reform agenda, to make new tax standards accessible to developing countries.
The review found that while the department had achieved some positive results with building capacity in partner countries, it had not done enough to ensure developing county needs and priorities were taken into account, either in policy discussions with other government departments about tax, or in the international processes.
DFID, whose role includes helping developing countries to join international policy discussions on tax avoidance and evasion, did not sufficiently ground its work in the needs and priorities of these countries, and followed a ‘top-down approach’.
The review gave DFID an ‘Amber-Red’ rating, highlighting that the department did not set clear objectives for its influencing work in relation to international tax avoidance and evasion, and did not monitor its results. The review also said that DFID needed to improve how it uses evidence and learning from its in-country tax programmes.
The UK aid strategy highlights tax as an area of important for DFID. As the department steps up its work in this area, ICAI makes a series of recommendations for improving performance:
- DFID should make better use of in-country data, research and learning to inform its international influencing work.
- DFID should take a more active approach to promoting coherence between the UK’s domestic and development policies on international tax.
- DFID should be more proactive in sharing its expertise in development and capacity building when working with other government departments.
- DFID should adopt a more strategic approach to influencing and cross-government working around international tax, setting objectives and ensuring these are adequately resources and properly managed.
The government publishes a response to all ICAI reviews. You can read the government’s response to ICAI’s review on tackling tax avoidance and evasion online.
International Development Committee
Parliament’s International Development Committee (IDC), or its ICAI sub-committee, holds hearings on all ICAI reviews. You can watch the IDC hearing on tackling tax avoidance and evasion online.
ICAI’s follow up
ICAI follows up on all of its reviews to check what progress has been made since publication. ICAI’s follow up review on tackling tax avoidance and evasion is now available.