A Staff Discussion Note published by the IMF on 22 September 2015 looks at policies that countries could adopt in pursuing sustainable development goals. The Note entitled From Ambition to Execution: Policies in Support of Selected Sustainable Development Goals looks at policies to promote economic growth and inclusiveness in developing countries in addition to environmental sustainability in both developing and developed countries.

The recommended policies include diversification and structural transformation in developing countries, shifting resources to their most productive uses and increasing diversification of production and export bases. This can be done through measures such as increased public investment in infrastructure; greater investment in human capital; increased agricultural productivity and greater integration in the international trade system. Another important factor is inclusiveness, reducing income inequality and gender inequality. Another aspect of inclusiveness is to reduce inequality of access to financial services by individuals and firms.

The tax system can play a more redistributive role by for example the design of a more effective personal income tax system. The individual income tax is generally a weakness for lower income countries but if designed properly it can increase the tax paid by higher income and high wealth individuals and increase tax revenues generally.

Consumption taxes are an efficient tool to increase government revenue owing to the low costs of administration and compliance. This efficiency increases if a country introduces a broadly based consumption tax with one uniform rate rather than different rates for different goods and services.

Taxes on real property are also an efficient source of tax revenue. Developing countries could make better use of these taxes to make the tax system more equitable and efficient. Current technology for valuation and identification of properties makes this a viable option for lower income countries.

By replacing taxation on a family or household basis with separate taxation of each individual in the household large efficiency gains may be made. A secondary earner in a family will than face a reduced tax burden and have a greater incentive to earn income. This means a better outcome for the labor market. Labor force participation can also be increased by the use of tax credits or benefits for low wage earners. In addition to these tax measures greater investment in infrastructure and the transportation system can reduce the costs of working outside the home.