TIWB Annual Report webinar - 4 October 2018
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OECD and UNDP panellists hosted a live webinar discussion on the Tax Inspectors Without Borders (TIWB) Annual Report 2017/18 on Thursday, 4 October 2018 at 17:00 (CEST). Find out about the increasing relevance of the initiative’s niche form of assistance in a dynamic international co-operation context and learn more about the TIWB’s innovative, practical and results-oriented approach to domestic revenue mobilisation. TIWB activities, results, lessons learned, collaborations and partnerships from the last year are highlighted.
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TIWB Annual Report webinar - 4 October 2018
- 1. TAX INSPECTORS WITHOUT BORDERS ANNUAL REPORT 2017/18 Webinar Thursday, 4 October 2018
- 2. Annual Report 2017/18 Webinar Panellists: Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration, OECD Gail Hurley, Policy Specialist, UNDP James Karanja, Head of the Secretariat, TIWB Amna Khalifa, Project Manager, TIWB
- 3. Features of TIWB Niche form of assistance to build capacity of tax administrations Balanced approach Learning- by-doing No substitution Real-time current cases Demand driven
- 4. TIWB in Context Complements global efforts to address Base Erosion and Profit Shifting (BEPS) Promoting behavior change towards responsible taxation Integrates with other technical assistance programmes
- 5. Financing the SDGs UNCTAD - Estimated annual SDG financing gap US$ 2.5 trillion annually Financing needs are enormous: - More resources needed - ODA, domestic resource mobilization, private investment etc.
- 6. Domestic Resource Mobilisation •Domestic resources: Largest and most important source of financing for development Country-owned and more stable than external sources of finance •Many developing countries have successfully managed to mobilize more domestic resources for development Domestic resources totaled US$ 7.7 trillion in 2012 compared to US$ 2.1 trillion in 2000 •Challenges include Capacity, Public Financial Management (PFM) and Tax policy Catalyzing sustainable development Domestic resources ~ 3.7 times international capital flows
- 7. UNDP Support Financing Roster Experts South-South mission costs Outreach/side events Raise awareness Programme support Regional knowledge sharing Policy dialogue
- 8. Strengthening the Roster of Experts 41 tax audit experts form the current Roster of Experts Applications now being accepted through 9 October 2018 Multilingual candidates and women are strongly encouraged to apply
- 10. Report Highlights: Reported Revenue Increases To date, USD 414 million in increased tax revenues is attributable to TIWB programmes
- 11. Report Highlights: Value for Money Return on investment for every $1 spent on TIWB programmes
- 12. Report Highlights: Broader Impact Skills Development Organisational Change Improved tools, procedures and processes Taxpayer Compliance
- 13. Sharing experiences Sector focus Whole of government approach South- South co- operation Report Highlights: Important Lessons
- 14. Report Highlights: Regional Organisations and International Partners
- 15. Report Highlights: Voluntary Contributions Support from our development partners is generously provided by: • the European Union • Finland • Germany • Ireland • Luxembourg • the Netherlands • Norway • Sweden • the United Kingdom More resources are required to sustain TIWB growth and coverage
- 16. Report Highlights: Communications and Outreach TIWB Experts’ Community of Practice
- 17. Report Highlights: Target Deployments 2016/17 15% 2017/18 20% 2018/19 30% 2019/20 35% 100 DEPLOYMENTS BY 2020
- 18. Report Highlights: Way Forward Focus on longer term sustainable impacts Meet demand for industry specific knowledge Expand the scope of TIWB International Conference in 2019
- 19. For more information, visit www.tiwb.org Q&A Session Annual Report 2017/18 Webinar
Editor's Notes
- Pascal to introduce the panel Welcome to this webinar announcing the publication of Tax Inspectors Without Borders Annual report 2017/18 Today we update you about increased revenue collection achieved through partnerships with other development partners and the extent to which TIWB represents excellent value for money. I am joined by Gail Hurley of UNDP and the TIWB Secretariat led by James Karanja and Amna Khalifa (Explain to participants that all questions should be sent in via chat to the « Moderator » and we will answer as many as possible at the end of the presentation).
- Pascal slide TIWB’s innovative approach to capacity building demonstrates the potential to renovate or transform the traditional approach to technical assistance (TA) delivery to other areas. Innovative game changer in the niche area of international tax audit assistance Main features of TIWB include A niche form of assistance complementing wider efforts to build capacity Offering a balanced approach to learning that goes beyond transfer of technical knowledge. A “learning by doing” approach to tax audit assistance. Hand holding and not substitution of local auditors Providing assistance on real, current cases.
- Pascal The globalised economy - risks of tax evasion and avoidance through international transactions, in particular to BEPS. Complements global efforts to address BEPS- The G20/OECD BEPS project represents the biggest development in international corporate taxation for over a generation. In November 2015, a package of 15 Actions was agreed representing a major re-write of many parts of the international taxation architecture. They provide tools to equip governments with domestic and international instruments to address tax avoidance and ensure that profits are taxed where economic activities are performed and where value is created. Promoting behavior change towards responsible taxation- G20 also keen to promote consistent and predictable treatment of business, and to consider indicators and measures of co operative compliance. TIWB is driving this change in attitudes among multinational enterprises and tax administrations. The private sector has a role in promoting responsible taxpayer behaviour in developing countries throughout the past year. Tax administrations are also being empowered through correct and consistent application of international tax principles. Integrates with other technical assistance programmes –TIWB provides seamless and strong complimentary links with regional and international organisations as well as bilateral assistance providers. Goal is to collaborate and not compete with other organisations to deliver effective technical assistance to tax administrations across the globe towards realisation of Sustainable Development Goals.
- Gail will speak through this slide The Annual Report we are launching today highlights the achievements of the partnership between OECD and UNDP, which has delivered excellent growth in 2017/18. The Partnership between our two organisations continues to thrive since the launch in July 2015 as programmes have expanded significantly throughout the globe supported by our global network of country offices. TIWB programmes are a practical example of how countries can work together to deliver results in international taxation, whilst preserving a demand-led approach and upholding the principle of country ownership. The Annual report details the increasing scope for TIWB to respond to country demands to meet the challenge of the 2030 agenda particularly on assistance in mobilising additional domestic public resources. Many more countries still require more support to mobilize more domestic resources for development, including through taxation to ensure no country is left behind in the efforts to attain SDGs.
- Gail - Key Challenges: Capacity Countries’ capacities to use domestic resources effectively and efficiently varies across countries Countries’ capacities to address transfer pricing by MNCs limited Public Financial Management (PFM) PFM often weak; expenditures may not be linked to national development plans; parliamentary oversight may be limited Effectiveness of expenditures often mixed Tax policy Widespread use of tax breaks/tax incentives to attract international investment; politically tax reform difficult Innovations in taxes (e.g. green fees) have been piloted but at small-scale
- Gail UNDP country offices are now facilitating national level discussions on DRM, raising awareness and building national support for TIWB programmes. Programme support includes costs in administering the programme, contracting Roster Experts, South-South mission costs and financing regional outreach events in collaboration with regional Bureaus. UNDP country offices have access to decision-makers and major stakeholders who can rally support for desired policy changes arising from feedback received from TIWB programmes. Country offices also help mitigate against political risks that might hinder DRM. OECD and UNDP are contracting and deploying TIWB Roster experts. The Roster now comprises 40 tax audit experts, 10 of which are from developing countries, who are qualified and available for TIWB deployments. In response to growing demand, this Roster is being expanded to bring in more experts capable of responding to the growing demands for experts with diverse cultural backgrounds and language skills best suited to work in all parts of the world. Need for more resources to meet growing demands.
- Gail In October 2016, UNDP launched a call for experts to join a new roster of tax audit experts for TIWB programmes to expand the pool of expertise TIWB can draw upon in support of programme deployments We encourage those interested to apply.
- James Programmes: Annual report indicates 29 ongoing programmes, 7 completed and 20 upcoming programmes October 2018 34 ongoing 10 completed and 23 upcoming in 28 countries Other Indicators of growth number of upcoming programmes; Growing interest from new partners both North and South based partners- Belgium, Mexico, Italy, Slovakia, India, Nigeria and South Africa Experts keen to join the roster of experts Increasing number of south-south programmes- Nigeria-Liberia, South Africa-Zambia, Kenya-Botswana, India-Swaziland Improved regional distribution- Growth in Latin America and Asia Goal of 100 deployments within reach
- James The Tax Inspectors Without Borders (TIWB) initiative achieved significant milestones in its efforts to build capacity for enhanced domestic resource mobilisation (DRM) in developing countries during this period. Increased revenue collection - USD 414 million in increased revenues attributable to TIWB and TIWB-style support offered in partnership with the African Tax Administrations Forum (ATAF) and the World Bank Group (WBG). The growth in demand and ability to deliver assistance across a large number of countries worldwide demonstrates the will towards achieving our goal of 100 deployments by 2020. As we achieve the desired scale of programmes, the focus is increasingly shifting towards setting ambitious targets in form of increased revenues and sustainable impact in financing the sustainable development goals This is a USD 136 million gain in revenue reported to the TIWB Secretariat since the previous annual report. Given time lags in finalising cases and reporting, some 2017 audit results are not yet included in this figure. At a regional level, revenue increases from Africa are most prominent.
- James TIWB continues to represent excellent value for money and a significant return on investment. On average, for every USD 1 spent on all TIWB activities between 2013 and 2018, there was a more than USD 100 increase in collected tax revenue by the Host Administrations. Furthermore, for every USD 1 spent on TIWB programmes in Africa, between 2013 and 30 April 2018, there has been a more than USD 140 increase in collected tax revenue.
- James Tax administrations supported by TIWB and other related assistance providers (e.g. ATAF) in developing countries are already reporting a range of outcomes (see Box 3.1). Beyond increased tax revenues collected, outcomes include: • skills development to conduct quality audits; • improved tools, procedures and processes; • organisational change; and • improved overall taxpayer compliance. Reported outcomes are derived from the experts’ mission reports, tax-auditor self assessments forms, TIWB progress reviews and programme evaluation forms.
- James A whole-of-government approach to resource provision for TIWB programmes can improve deployment processes. Partner Administrations such as France, the Netherlands and the United Kingdom have enjoyed a seamless approach to deploying their experts due, in part, to financing arrangements with their government’s development co-operation counterparts. In many cases, South-South co-operation is the preferred approach for Host Administrations to build audit capacity and often Host Administrations see such co‑operation as a more natural “fit”. Tax audit experts from the same region can have a better understanding of the working environment and experience similar challenges in their own tax authorities. TIWB is exploring how to develop more South based experts through “triangular” co‑operation. This process involves more experienced auditors being paired with junior tax auditors to implement TIWB programmes. This develops a wider pool of TIWB experts. In 2017, TIWB piloted a promising triangular co-operation arrangement in Uganda (see Box 4.4 below) and more opportunities will be actively explored in the coming year. A larger mentorship programme is under active consideration and design. As demand shifts from general audits to sector-specific audits, TIWB will respond to demand from Host Administrations to explain business models and complex value chains. Host Administrations are increasingly requesting expertise in agriculture, construction, distribution, financial services, manufacturing, minerals and other commodities, oil and gas, pharmaceuticals, telecommunications, and tourism.
- Amna You have already heard about the increasingly strengthening partnership between OECD and UNDP which plays a great role in the effectiveness of TIWB programmes. Over the past year, TIWB has also reinforced its collaboration and partnerships with regional and international organisations to extend the reach of TIWB programmes through joint implementation. The last year has seen notable developments with ATAF, CREDAF, CIAT, EC, FTA and OTA.
- AMNA We acknowledge the continuing support from all our partners. More resources are required to sustain TIWB growth and coverage and we would like call upon development partners to further support our endeavour in this regard.
- AMNA 2017/18 witnessed a continued emphasis on communications and outreach to raise awareness about TIWB activities. The first TIWB e-newsletter was published in March 2018 to brief the public about its recent activities and achievements. The TIWB Secretariat plans to publish such a newsletter twice a year. In response to a request made at the Experts Roundtable and Stakeholders Workshop in November 2017, TIWB has launched a community of practice for TIWB Experts via the Knowledge Sharing Platform (KSP) developed by the Canada Revenue Agency in April 2018. TIWB experts are encouraged to share expertise, best practices and lessons learnt, track successes and enhance peer-to-peer interaction through this platform.
- AMNA In pursuance of its ambitious goal to facilitate 100 deployments by 2020, TIWB is on course to achieve a target of 65 deployments by 2018/19 through its growing demand and expanding partnerships, thus expanding the geographical reach of TIWB. We will continue to establish South-South programmes and foster mentorships where possible. 15 deployments by 2016/17 35 deployments by 2017/18 (20 new) 65 deployments by 2018/19 (30 new) 100 deployments by 2019/20 (35 new)
- AMNA In the third year of the Initiative, we are now in a better position to focus on monitoring progress and assessing more longer term sustainable impacts from ongoing and completed TIWB programmes such as skills development, consistency in the audit process and taxpayer compliance. As the demand from the Host Administrations shifts from more general to sector-specific audits, we are in the process of creating a new pool of industry experts working with various organisations such as the B-team, BIAC and others, to assist developing countries address audit challenges in key business sectors. We are expanding the scope of TIWB to new areas of interventions for addressing DRM challenges such as tax and crime investigations. A new pilot programme has been initiated to explore the applicability of the TIWB model with investigation experts working with local tax and other government officials on anonymised cases. After the huge success of out first Expert’s Roundtable and Stakeholder Conference, we plan to hold a second major international conference on TIWB and its possible future directions in first quarter of 2019.
- PASCAL Thank you all for being part of the launch of the second edition of the TIWB Annual Report. We now welcome questions from the participants.