Seminar on Strengthening Domestic Resource Mobilization – New Rules for Global Finance Coalition

Tuesday September 22, 2015 / 9:30 a.m. – 6:00 p.m. 

Offices of Holland and Knight 

800 17th Street NW Suite 1100, Washington, DC 20006

Domestic Resource Mobilization (DRM) is one of the central planks of both the recent UN Third Financing for Development (FfD) Conference held in Addis Ababa, Ethiopia, and the achievement of the UN Sustainable Development Goals (SDGs) approved at UN General Assembly in New York in September, 2015. In light of these events and consistent with its mandate to support sustainable and inclusive economic growth, New Rules for Global Finance organized a multi-stake holder seminar on practices that actually increase revenue for EMDEs.

Representatives from governments of advanced and developing economies, international financial institutions, civil society and the private sector gathered in Washington, DC to discuss their experiences under Chatham House Rules. 

The first conversation focused on the new framework set by the FFDs, the SDGs, and in anticipation of the October approval of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project.  Even in Addis, the developing economies cautioned about being satisfied BEPS, which was designed by and for the OECD member states, with little attention to the needs and the consequence for EMDES, who maintain that BEPS could, at best, be a vehicle for greater transparency in international tax matters.  The World Bank and IMF plan to work together on revised tax policies to increase equity within the EMDEs.

The remainder of the Seminar focused on three tools for increasing revenue to developing countries:  taxing land and the extractive sector, and national tax systems needed to be able to carry out the related policies.  On land matters, seminar participants learned of the City of Cape Town, South Africa’s experience with first surveying and registering land, and then taxing according to market value—with several positive side-effects. The OAS representative referenced a regional meeting it will host to support those responsible for national land registries and cadastres. 

Regarding the extractives sectors, Newmont Mining detailed the extensive timeline and sizable upfront investments required before any profit was seen, specifically from gold mining.  The IMF’s multi-layered set of policies and taxes seemed like it would yield fair outcomes for national governments, while providing the predictability desired by mining and related industries. 

During the discussion on government systems, USAID described several efforts to increase revenue with details on experience in El Salvador.  Similar experiences of OECD countries were also noted.  National experiences were reported from Colombia, Senegal, South Africa, Nigeria, among others.  One developing economy criticized the lack of follow-through and training that that too often characterizes software purchased to streamline tax collection.  Otherwise, no single recommendation emerged for the design of national tax systems. Rather the discussion re-emphasized country-specific approaches, concerns about corruption and rent, and the need for political will, trust, and transparency.

Throughout the Seminar participants benefitted from engagement of private sector representatives–Thomson Reuters, IBM, KPMG, and Papatel, and from individual consultants in tax law and tax software.

The smart, candid and thoughtful contributions by people from such diverse experiences brought high energy and even mirth into the room, along with myriad suggestions for further research and collaboration—many of which could be tailored to bilateral or sub-regional learning.  The greatest point of consensus was about the utility of land registration and land taxes, as an equitable source of government revenue, accompanied by many positive side effects.

The Seminar represents a new frontier for New Rules, exploring concrete approaches that implement tax policies.  Previously New Rules has focused on policy analysis and recommendations.  In this forum, where the multiple stakeholders described strengths and weaknesses of specific applications, a new landscape for potential work opens for New Rules.   Relatively simple answers of theory and policy were deeply enriched by experiential evidence. 

NOTE:  Several lead discussants have generously agreed to share their power point material and web links for posting on the New Rules website.  As allowed by Chatham House Rules, the list of participants follows.  New Rules expresses particular thanks to the hosts, Holland and Knight and Thomson Reuters

Select Presentations:

Seminar Attendees

Salutation First Name Last Name Organization
Mr. Enrique Baiz Papatel, Colombia
Mr. Christopher Barlow Thomson Reuters
Ms. Sarah Bracht Vaugeois Fiscal Transparency Coalition
Mr. Tom Brady Newmont Mining, Phoenix, AZ
Mr.  Robert Buergenthal Thomson Reuters
Mr. Nathan Coplin New Rules for Global Finance
Mr. Trevor Davies KPMG
Ms. Erika Dayle Siu Independent Commission for the Reform of International Corporate Taxation (ICRICT)
Mr.  Ismaila Diallo Ministry of Economy and Finance, Senegal
Mr. Jose Diaz-Asper New Rules for Global Finance
Mr. David Dod USAID
Rev. Seamus Finn* Interfaith Center on Corporate Responsibility
Ms. Jo Marie Griesgraber New Rules for Global Finance
Mr.  Terence Lutes IBM
Mr. Matthew Martin* Development Finance International, London
Mr Sergio Martinez Cotto Guatemalan Economist
Mr. Diego Mesa Puyo International Monetary Fund
Mr. Michael Mora Organization of American States
Ms. Blanca Moreno-Dodson World Bank
Ms. Amanda Oliveira New Rules for Global Finance
Ms. Ifueko M. Omoigui-Okauru Past Director, Inland Revenue Services, Nigeria
Ms. Julia Susana Padierna Peralta Attorney, International Trade and Customs
Mr. Alejandro Pardo Quinones ProColombia-USA
Ms. Laura Rojas Washington Consulting Corporation
Mr. Diego Vasquez NLM Group
Mr. Wilmien Wicomb Legal Resources Center, South Africa

* New Rules Board Members