The Fair Tax Monitor is a unique evidence-based advocacy tool that makes it possible to identify the main bottlenecks in national tax systems and to provide strong evidence for advocacy. At the same time, the tool allows for a comparison of tax policies and practices in different countries, using a standardized methodology and unified approach in the research.
The tool relies on the data and analyses presented in the country reports written with a common research framework. At later stages in the project, it will also enable the monitoring of progress in the countries over time. Internationally, the Fair Tax Monitor contributes to global advocacy efforts by providing solid evidence and by showcasing the relative fairness of selected tax systems.
The current work is only the beginning of what we hope will be an encompassing tool covering a broad range of countries. The methodology and common research framework are based on a participatory process, including country teams in Uganda, Senegal, Bangladesh, Pakistan, Kenya and the Netherlands. Both reports were reviewed by a broad Advisory Group and during a stakeholders’ meeting in Nairobi in September 2015.
In this phase, with the country reports ready and the scoring methodology tested, we share the outcomes as widely as possible. In doing so we invite you and all interested parties to get in touch with us and share your thoughts and ideas for adaptation and improvement. Please use the following email address to contact us: firstname.lastname@example.org. The ultimate goal is to have the FTM’s research framework, the methodology and web-tool be used and supported by an ever-increasing number of organisations within and outside the Oxfam and TJN-A networks.
The Fair Tax Monitor uses the data from the country reports and the methodology that Oxfam Novib, TJN-A and partners have developed. All documents are available to download on the right. Thanks to the common research framework, the country reports collect information uniformly and provide analyses of the same issues across the countries. Therefore, the same methodology can be applied to analyze the data collected in the country reports, which subsequently allows for comparing the different aspects of tax systems.
The FTM is currently structured to reflect the state of tax systems in developing countries. With future adjustments it may be possible to include a wider range of countries. The methodology is based on the experience of both local and international organizations, and at the same time it builds on the knowledge of experts in global tax policies.
The structure of the methodology used to analyse the data is rooted in the common research framework and is divided into six thematic categories used for evaluation. These categories are meant to cover the main issues that tax systems in developing countries face today, and to reflect the idea of a fair tax system. The categories included in the FTM’s methodology to evaluate the tax systems are:
- PROGRESSIVE TAX SYSTEM
- SUFFICIENT REVENUES
- EFFECTIVE TAX ADMINISTRATION
- PRO-POOR PUBLIC SPENDING
- ACCOUNTABLE PUBLIC FINANCES
- WELL GOVERNED TAX EXEMPTIONS
To properly assess the categories above and to be able to compare the data between the countries, each category is divided into several topics for which a series of scoring questions are designed. The scoring questions were formulated as binary (yes/no) questions and their structure is adjusted so that a scoring point is assigned to a positive answer and no scoring point to a negative answer. In this way, it is possible to work with both qualitative and quantitative data and to combine them in constructing the final score for each category.
There are certain exceptions to the rule of assigning a scoring point to a yes answer to a scoring question, and vice versa. Firstly, when no data is available for a specific question, the question is not included in the scoring process. Secondly, some questions include an additional ‘b-question’ that allows the countries to gain a part of the score, e.g. when there is progress towards the ideal situation, but the final goal has not yet been reached, the partial scores reward the efforts made. And lastly, in the category of Accountable public finances, four scoring questions have been included that are retrieved from the Open Budget Index (OBI) created by the International Budget Partnership. The questions are weighed on the original score received in the OBI.
As explained in the previous paragraph, each of the categories includes several thematically related topics which receive scores based on binary questions. All topics have an equal importance (weight) in each category and the final score for the whole category is calculated as a sum of accumulated scoring points. This sum is then adjusted to fit the scoring scale, reflecting the relation between points collected compared to the maximum possible score. More details can be found in the scoring methodology available on the website.
The scoring scale is defined from zero to ten; zero representing an unfair component of a tax system and ten representing a fair component of a tax system. The final scores are rounded up for practical purposes, but the exact scores are available in the methodology sheets for each country. The scale is also divided into five coloured intervals corresponding to scores (0 to 2), (3 to 4), (5 to 6), (7 to 8) and (9 to 10).
 "International Budget Partnership." International Budget Partnership. Web. 02 Dec. 2015. <http://internationalbudget.org/>.