Many Development Finance Institutions (DFIs) are not doing enough to eliminate the risk of public money being complicit in tax avoidance schemes. This is the finding of an analysis of publicly available policies of nine DFIs related to corporate tax payments, which suggests that DFIs are doing too little to encourage responsible corporate tax behaviour. Some DFIs have taken important steps forward, which this paper documents; however, many DFIs are falling behind. Even less is being done to ensure that their clients meet the highest standards for responsible corporate tax behavior and full transparency.
This briefing includes recommendations for how DFIs can take a much-needed and overdue proactive role in ensuring tax payments and domestic resource mobilization in developing countries follow from their investment decisions.