New World Bank report says trust key for higher tax revenues in the Caribbean

WASHINGTON, CMC – A new World Bank report says as the Caribbean and other governments in the developing world look for ways to strengthen tax collection systems, they must take a holistic approach to tax reform that includes building citizens’ trust.

According to the report, in many developing countries, tax revenues remain far below levels needed to provide citizens with basic services or fund extra spending to minimise the impact of COVID-19.

“Innovations in Tax Compliance: Building Trust, Navigating Politics and Tailoring Reforms” outlines a novel, integrated framework for improving tax systems based on three core pillars: enforcement, facilitation and trust.

When implemented, alongside reforms to boost enforcement and improve facilitation, strategies to increase trust between taxpayers and tax administrations can lead to higher rates of compliance and build a foundation of public support for more effective taxation, the report said.

“The report offers feasible, clear-cut paths to putting trust building into practice,” said Edward Olowo-Okere, director of the World Bank’s Governance Global Practice.

“With detailed information on successful initiatives, it urges reformers to focus on how to more effectively tailor strategies to local contexts and constraints,” he added.

In Freetown, Sierra Leone, for example, Olowo-Okere said successful property tax reform followed significant public education programmes and new forums for engagement between taxpayers and the city.

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