Domestic revenue mobilisation (DRM) has been at the top of the development agenda since the Addis Ababa conference on financing the Sustainable Development Goals (SDGs) in 2015. Increasing domestic taxation will – it is believed – help provide the financing necessary to achieve the SDGs and contribute to the emergence of more responsive, accountable, and capable states.

Donors have signed up to the Addis Tax Initiative agreeing to double their support to strengthening tax systems by 2020. Last month the great and good of the tax world met at the United Nations to discuss how best to provide this additional support. The takeaway, according to Vito Gaspar, the head of the IMF’s Fiscal Affairs Department, was ‘MTRS, MTRS, MTRS’.

MTRS stands for ‘medium-term revenue strategy’. These are supposed to provide ‘social consensus on medium-term revenue goals’ and a 5–10 year ‘comprehensive reform plan for the tax system’.

Do as we say, not as we do

Whilst it is hard to argue against the idea of a strategic plan that brings together tax policy and tax administration – setting out reform objectives that take into account expenditure needs – some of these elements are wildly, and unrealistically, ambitious.

Why do we expect developing countries to prepare revenue strategies reflecting a social consensus on revenue goals when we do not see these in our own countries? Larry Summers derided the Trump administration’s tax plan as ‘…not a plan. It is a mélange of ideas put forth without precision or arithmetic’. The last time the US undertook the type of comprehensive tax reform that the MTRS concept seems to envisage was over thirty years ago.

The UK has also been criticised for the lack of a medium-term focus in tax policy. There is ‘frequently … little sense of direction’ and a failure to publish clear guiding principles or priorities for tax policy.

The dangers of blueprints

We need to beware of what can happen when the preparation of a reform strategy is pushed by external actors. The record of donor support for institutional reform shows that countries must identify the problems they want to solve and develop home-grown reforms. Donor-mandated reform plans can all too easily become a set of solutions looking for a problem to solve – a hammer looking for a nail. If medium-term revenue strategies end up pushing the same set of reforms across a wide variety of different contexts – regardless of whether these are prioritised by local actors or suited to local conditions – they will fail.

It’s the process, not the outcome

Comprehensive tax reform – and comprehensive reform in any area – occurs when the stars align; when there is broad consensus on the need for change, and political leadership to navigate reforms through any opposition. When this does not exist, it is not going to be conjured into existence by an MTRS.

So we should moderate our expectations of what an MTRS will contain, and what it will achieve. But importantly, we should also focus on the process as much as the outcome. The UK has been advised that more consultation can improve decision-making and widen public debate on tax policy. This advice would also be well heeded by developing countries and their international partners. At the conference in New York last month, Uganda’s Civil Society Budget Advocacy group reported that the MTRS process was providing an avenue to open up discussions of tax policy between the Ministry of Finance and civil society.

Another advantage of a more structured reform process is that it can bring different actors in government together – especially ministries of finance and revenue authorities which may have somewhat fraught relationships. If governments are to effectively construct locally-defined problems in their tax systems, they will need work together to define the problems they need to solve, and to discover workable solutions.

Similarly, in terms of aligning donor support for DRM, the process of working through an MTRS is likely to be more important than the document itself. And this process should focus on making sure that donors are supporting government priorities, rather than on imposing an external agenda. One way of doing this may be to provide support to parliament and to local civil society groups to effectively engage with the government on technical tax matters.

Don’t let the perfect be the enemy of the good

If the process of formulating an MTRS is genuinely locally owned, then we can expect these strategies to look very different from country to country. Some may be ambitious. Some, reflecting, local priorities and constraints, may be less so. Their development must provide space for countries to identify the problems in their tax system they want to work on, and to allow local processes to generate options for reform. In short, we must not let the laudable ambition behind the concept of medium-term revenue strategies distract from the feasibility of reforms. If the amount of time that will be spent on these exercises is to have any return they should focus on a small number of real priorities that can be delivered, not a long wish list of different activities for donors to fund.