The Hidden Billions: Tax expenditure reform for sustainable finance

At the FCDO Global Partnership Conference in London, IISD Tax and Sovereign Debt Director Alexandra Readhead will take the stage at 11 a.m. BST to deliver a feature talk, "The Hidden Billions: Tax Expenditure Reform for Sustainable Finance."

Drawing on her work with IISD and the Coalition on Tax Expenditure Reform (COATE), an initiative by five leading policy organizations launched at FfD4, Alexandra will discuss why tax expenditure reform should be the next practical step governments take to free up money for development and climate.

Governments often provide tax breaks and credits to attract investment, but without proper evaluation, they often become hidden costs that often rival or exceed national health and education budgets. Alexandra will outline how governments can move from hidden to harnessed, turning these overlooked billions into targeted tools for green industrial development, gender inclusion, and economic resilience.

This talk comes at a critical juncture for international development. As debt pressures mount and overseas development aid shrinks, the search for sources of funding for development and climate has intensified.

About the Conference

The Global Partnerships Conference, co-hosted by the UK Foreign, Commonwealth & Development Office (FCDO) and the Republic of South Africa, brings together a diverse coalition of governments, investors, and civil society to build modern partnerships that drive inclusive development and reduce long-term dependence on aid.

Other events at the FCDO Global Partnerships Conference

A Roadmap for Fiscal Sustainability: Taxing Smarter for Growth and Equity

This side event, organized by the International Centre for Tax & Development, will provide practical lessons drawn from research on tax reform in lower-income countries. It will focus on how reforms can be effective at scaling tax revenues, as well as being equitable and sustainable.

Boosting fiscal resilience in lower-income countries has acquired a renewed urgency in the new reality of development finance. While aid decreases substantially, many lower-income countries also face pressing debt servicing costs that exceed what they can spend on basic services for their citizens.

Navigating the next era of development requires a new paradigm grounded in resilience, self-reliance, and partnership. Taxation is key to getting this right. While low and middle-income countries collect at least $1.5 trillion in tax revenue, this is still nowhere near the $4 trillion required to plug the financing gap toward the SDGs. It is impossible to conceive of a more self-determined development model in which tax does not play a larger role. When they are ineffective or inequitable, however, efforts to raise more revenue can undermine tax collection and public trust.

The challenge is massive, but we have a clear roadmap: more than a decade of context-specific evidence, much of which has been generated through partnerships between revenue authorities, civil society associations, finance ministers and researchers in the UK and across the globe. These partnerships enable officials and researchers to leverage data, share skills, jointly identify key insights, and embed learning feedback loops in real-time.

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