No public policy issue is of more importance than the structure and level of taxes. Developing countries face a specific set of challenges in trying to design a successful tax system, and there is no reason to believe that the patterns and policies that are effective in the U.S. or in Western European countries will carry over. For instance, in more developed countries, the redistribution of wealth is often accomplished through public expenditure policies, but in many developing countries, public expenditures, constituting a much smaller fraction of GDP, are less effective in redistributing income. Moreover, in many developing countries, inequality is high and the lack of progressivity in the tax code is of even greater concern. Finally, in many emerging economies, issues of corruption should be at the fore in the design of tax structures. In practice, little explicit attention is paid to the implications of corruption for the design of tax structures in these states.

The Task Force finds theoretical or empirical evidence on how changes in policy such as tax rates, important tax provisions (e.g. introducing tax holidays), tariffs, tax administration, and financial regulations impact development. It addresses the major impacts in developing countries and provides policymakers with a clear and accessible description of the key aspects of the current tax codes, the methods used for administering and enforcing tax codes, a history of the key changes that have occurred in the tax law and in tax administration during the past twenty-five years, and a sense of the impacts of these reforms on the economic growth and development.