Strengthening governance to mobilise domestic resources

Opening data, building trust

Improving systems, improving tax collection

Revenues from the extractives sector can play an important role in financing citizen services

In many EITI countries, revenues from the extractives sector can play an important role in financing citizen services, such as schools, health care and infrastructure.

The Addis Ababa Action Agenda on Financing for Development, agreed in 2015, has refocused attention on strengthening government systems to harness domestic resources for development.

The EITI Standard requires transparency on the roles and responsibilities of government agencies in managing the fiscal system. This enables greater government accountability in how government agencies exercise their tax duties vis-à-vis oil, gas and mining companies operating in each country. EITI reporting also highlights the need for capacity building and improvement in inter-agency collaboration, thus contributing to improved tax administration.

The EITI contributes to domestic resource mobilisation by:

1. Improving tax administration

2. Identifying practices that could undermine taxation

3. Fostering dialogue about fiscal policies and reform

Democratic Republic of Congo

DRC EITI recommended increasing the proportion of extractive revenues flowing to
the State Treasury, away from state agencies and companies that were outside of formal government oversight. Today, more than two thirds of the revenues go directly to the treasury, up from less than a half.

Afghanistan

In Afghanistan, the Minister of Finance did not have sufficient information on extractives companies with tax liabilities to the government, impeding its ability to collect those taxes. The Ministry of Mines and Petroleum now publishes information on thousands of license holders and their related payments, which provides valuable information to other ministries and government agencies seeking to enforce payments.