## Fourth Financing for Development (FfD4) Conference Domestic Public Resources Roundtable: Remarks by DMD Nigel Clarke

_IMF News, June 30, 2025_

## Source details

**Canonical URL:** [Fourth Financing for Development (FfD4) Conference Domestic Public Resources Roundtable: Remarks by DMD Nigel Clarke](https://www.imf.org/en/news/articles/2025/06/30/sp063025-ffd4-domestic-public-resources-roundtable-dmd-nigel-clarke)

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## Bibliographic details
- Published: June 30, 2025

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### Context and framing
- Delivered in Seville, Spain on June 30, 2025.
- Speaker: Nigel Clarke, Deputy Managing Director (remarks delivered on behalf of the IMF).
- Personal background: Served as Jamaica’s Minister of Finance prior to joining the IMF "last Fall," with experience during periods marked by elevated uncertainty including COVID-19 and extreme weather events.
- Central thesis: Tax capacity is the crucial financial enabler of state capacity; development requires deliberate, disciplined, and equitable mobilization of resources rather than hope.

### Key findings and empirical claims
- There is a tipping point of tax to GDP that—once crossed—leads to higher sustained economic growth.
- Research suggests targeting at least 11-15 percent of GDP in tax revenue is best; below that, it is very difficult for governments to manage their economies and provide adequate public services.
- As countries progress past the taxation tipping point, higher economic growth is accompanied by:
  - better financial development,
  - more government effectiveness,
  - stronger legal institutions.
- IMF research indicates that low-income countries could gain as much as 7 percent of GDP in tax revenue over the medium to long term by raising their tax efforts to match the best-performing developing countries.

### Challenges identified
- Across much of the world, increases in tax capacity have slowed.
- Productive expenditure is being crowded out by rising debt service.
- Spending pressures are intensifying.
- Deep political resistance to tax increases remains in many developing countries.
- Progress on improving revenue levels has stalled in much of the developing world.

### Positive examples and country cases
- Noted countries that have made great progress on tax capacity and reforms: Cabo Verde, Cambodia, Rwanda, and Jamaica.

### Policy recommendations and priorities
- Country-led reform agendas should focus on:
  - building trust,
  - taxing fairly,
  - spending wisely.
- Spending and revenue reforms must be part of a coherent country program to be successful.
- Implementing strong public financial management systems is essential to ensure revenues are used efficiently.

### IMF support and institutional response
- The IMF created the Global Public Finance Partnership to provide flexible and holistic capacity development support.
- Support is:
  - tailored to each country,
  - designed to equip countries with tools and expertise,
  - delivered in close partnership with the international community.

### Concluding message
- Tax capacity underpins national resilience: "Without it, there is no fiscal space. Without fiscal space, no sustainable development."
- Taxation encompasses more than revenue—it's about trust, fairness, and long-term stable and enduring growth.

*Source: Fourth Financing for Development (FfD4) Conference Domestic Public Resources Roundtable: Remarks by DMD Nigel Clarke — https://www.imf.org/en/news/articles/2025/06/30/sp063025-ffd4-domestic-public-resources-roundtable-dmd-nigel-clarke*

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## References

- [Nigel Clarke](https://www.imf.org/en/about/senior-officials/bios/nigel-clarke)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2025/06/30/sp063025-ffd4-domestic-public-resources-roundtable-dmd-nigel-clarke_