In the last decade, a net transfer of financial resources from poor to rich countries has developed and steadily increased. Reasons behind this global trend are that neither aid flows, foreign direct investment nor remittances compensate for massive debt repayments, trade imbalances, capital flight and the accumulation of foreign assets, especially foreign exchange reserves like in China. In comparison to debt, trade, aid and investment, taxation has been the subject of very little attention by the international development community. In this paper, CIDSE sets down detailed arguments, for issues of capital flight, tax competition and systems of taxation to be put at the heart of the development agenda. Recommendations on how this can be done follow the arguments.
Contact: Jean Saldanha (saldanha(at)cidse.org)