The centre for tax analysis in developing countries

Overseas Development Institue Institue for Fiscal Studies

As inequality has risen around the world, the importance of tax design for achieving equity objectives has become increasingly widely discussed and is the focus of much recent public finance research. At the same time, globalisation and the increasing international mobility of capital have brought international and jurisdictional issues in tax policy to the fore for many countries and for the international community more generally.

This set of issues was showcased at the 4th World Bank Tax Conference in September 2022, which focused on ‘Global Tax Equity’. The set of perspectives papers in this symposium showcases some of the key policy questions and discussions from that meeting of academic researchers, tax and development practitioners and policymakers. 

In ‘Taxing high-net-worth individuals: experience from Indonesia’ by Vedanth Nair and Mekar Satria Utama, discuss the efforts Indonesia has made in curbing tax evasion and avoidance by the rich and relates these to the issues set out by Zucman’s paper based on his conference keynote speech. The Indonesian government opted to combine tax policy changes – an increased top tax rate – and tax administrative changes, by allocating high-net-worth individuals to specialised tax offices and introducing a temporary amnesty. Whilst initial evidence suggests that tax revenue has increased, the paper points out the need for a rigorous impact evaluation of the causal effect of the reform on tax revenues, reported wealth, income and real earnings, and the need to disentangle the effects of the tax policy changes from the effects of the administrative operational changes stemming from the new high-wealth tax offices and the temporary amnesty.

Published on: 20th September 2023

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