According to the Institute on Governance (IOG), the Ottawa-based non-profit think-tank that specializes in governance, more First Nations communities should be taxing themselves as a means of solving on-reserve economic problems, such as housing and water quality.

The 46-page report, In Praise of Taxes: The Link Between Taxation and Good Governance in a First Nations Context, discusses how the additional revenues generated by taxation would not only pay for enhanced services but taxation would make band governments more accountable to their citizens.

Under taxation, IOG argues that services could be improved on the basis that the new taxing governments would have more of an incentive to try to increase the prosperity of their population since residents would go from being simple

consumers to “revenue sources.”

The report suggests various taxation sources ranging from property to personal income to various forms of sales taxes similar to provincial and federal sales taxes.

According to IOG, taxation could help promote more equality on reserves as there tends to be income discrepancies where a minority of members possess jobs and thus garner a greater income. Taxation could be a means of redistributing

wealth depending on the needs of the individual.

While there are several First Nations communities in Canada that have imposed some forms of taxation within reserves, the report acknowledges how its philosophy may not be widely received as there would be a fear that taxation

by band governments would erode the federal government’s responsibility towards Indians.