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.

Score: Amber/Red
  1. Status: Completed
  2. Published: 27 September 2016
  3. Type: Learning review
  4. Subject: Anti-corruption, tax avoidance and fiduciary risk
  5. Assessment: Amber/Red
  6. Location: Ethiopia, Ghana, Pakistan, Tanzania
  7. Lead commissioner: Richard Gledhill

Read the approach paper

Our approach

International companies operating in developing countries have developed sophisticated strategies to avoid paying tax, taking advantage of loopholes in the global financial system. Cross-border tax avoidance and tax evasion deprive developing countries of resources that could be invested in public services and development programmes.

This learning review explores how the Department for International Development (DFID) uses its influence across the UK government and internationally to address this issue. It explores commitments made by the UK and other countries at the Third International Conference on Financing for Development to support revenue raising in developing countries’ through both domestic and international tax reforms. It also provided the opportunity to explore how the UK government ensures policy coherence in an area in which both domestic and developing countries’ interests are at stake.

Review questions

  1. Relevance: How relevant is DFID’s approach to addressing the global issues of cross-border tax avoidance and tax evasion?
  2. Effectiveness: How effectively has DFID contributed to addressing the global issues of cross-border tax avoidance and tax evasion in a way that benefits developing countries?
  3. Use of evidence and learning: To what extent is DFID generating and applying evidence and learning to support its approach to addressing the global issues of cross-border tax avoidance and tax evasion?

Timeline

Approach

Published 7 March 2016

Evidence gathering

Complete

Review publication

Published 27 September 2016

Government response

Published 7 November 2016

Parliamentary scrutiny

IDC hearing 23 November 2016

ICAI follow-up

Published 21 June 2017