Skip to content

Danish tax plan to promote growth in developing countries

Tax systems in developing countries must be strengthened in order for them to be able to finance roads, hospitals and schools and eventually become independent of development assistance. That is the view of Danish Minister for Trade and Development Cooperation, Mogens Jensen, who will share Danish experiences in supporting stronger tax systems during the World Bank Spring Meetings in Washington this weekend.

Staff in the Ghana’s tax authority needs better training. They also need better IT systems, the country’s tax policy needs to be more progressive and tax collection needs to be enforced more systematically. All this is required in order for Ghana to be able to collect more taxes – funds which should enable Ghana finance its own development.

These efforts in Ghana is part of the Danish government’s tax plan which aims to assist developing countries, not least in Africa, build up stronger tax systems, increase tax income and at the same time fight tax fraud.

Danish Minister for Trade and Development Cooperation Mogens Jensen will take part in the World Bank’s Spring Meetings in Washington this weekend where he will share Danish experiences in supporting stronger tax systems.

”An education which gives access to better jobs is the best way out of poverty. But it is difficult to battle poverty if developing countries do not have sufficient funds to finance schools, vocational training and universities or for medical care when children get sick.

Denmark has stepped up its efforts to support developing countries strengthen their tax systems and fight illicit financial flows. And support to stronger tax systems is extremely effective. Since 1999 and with Danish support, Tanzania’s Revenue Authority has increased its tax income with 1,000 per cent, so now there is room in the budget to fund education and health.

We need more of this. This is why the Danish government has launched a new plan for Denmark’s active engagement in supporting developing countries build up tax systems, close tax loopholes and fight illicit financial flows. This will ensure the necessary funds in government budgets which can fund schools, roads and hospitals,” says Mogens Jensen.

In New York in September 2015, the world’s heads of state and government will meet to adopt new global goals for poverty eradication and sustainable development and agree on how to fund their implementation. Increased domestic public finance from taxes will likely be an important ingredient in the final agreement on how to fund the goals. This is why tax and development and a stronger involvement of developing countries in international tax collaboration are among the Danish priorities in the negotiations. These are also issues which will be discussed during the World Bank Spring Meetings in Washington from 17-19 May 2015. Danish Minister for Taxation Mr. Benny Engelbrecht will join Minister Jensen for these meetings.

The new Implementation Plan for Tax and Development illustrates the extent of Danish support to tax and development. You can access the plan here.


For further information please contact Maria Westh, press adviser for the Minister for Trade and Development Cooperation, at tel. +4550778664