28 May 2010

Why don’t aid workers pay tax?

If oil and aid were given directly to citizens rather than governments, then governments would presumably need to generate a bit of revenue through their tax systems to deliver some public goods.
Independent of these arguments – a good tax system is inherently a good thing: providing predictable funding for the government and a bit more accountability.
So why doesn’t the international community do more to support these systems directly by putting their (overpaid?) salaries through them? Hey donors – we’re giving aid anyway, does it really matter if some of it goes into developing country government coffers in a good way? Wouldn’t the increased volumes create demand for a better, more efficient tax system? Is it only Southern Sudan where the entire international community is exempt from paying any income tax?


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