Tax Administrations working together

CMI REPORT TAX ADMINISTRATIONS WORKING TOGETHER R 2012: 3
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COLLEGE OF FINANCE, MANAGEMENT AND DEVELOPMENT
DEPARTMENT OF TAX POLICY AND ADMINISTRATION
Article Review on Tax Administrations working together
Individual Assignment
NAME KEL ZEWUDE ZOYTIN
STUDENTS ID ECSU2201572
COURSE TITLE Review Of Research On Tax Policy and Administration
COURSE CODE TPA6111
Submitted To D.r Solomon
Nov 15, 2023
ADDIS ABABA ETHIOPIA

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Contents
Introduction........................................................................................................................................... 1
1. Defining institutional collaboration .................................................................................................. 1
2. Roles and responsibilities ................................................................................................................. 1
3. Background for the collaboration and activities ............................................................................... 2
3.1 Norwegian support to strengthen the tax administration in Zambia ........................................... 3
3.1.1 Cooperation between NTA and ZRA ................................................................................... 3
3.2 Norwegian support to strengthen the tax administration in Mozambique .................................. 5
3.2.1 Cooperation between NTA and AT...................................................................................... 5
3.3 Norwegian support to strengthen the tax administration in Tanzania......................................... 6
3.3.1Cooperation between NTA and TRA .................................................................................... 7
4. Choices on how to structure the work............................................................................................... 7
4.1 Balancing the partnership............................................................................................................ 7
4.2 Modes of collaboration................................................................................................................ 8
5 Dealing with capacity constraints ...................................................................................................... 8
6. Dealing with unforeseen circumstances............................................................................................ 8
7. Coordination of activities.................................................................................................................. 8
8. Measuring impacts and progress....................................................................................................... 8
10. Considerations for the continuation of the collaboration................................................................ 9
Strengths: .............................................................................................................................................. 9
Weaknesses:........................................................................................................................................ 10
Conclusion: ......................................................................................................................................... 10

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Introduction
The introduction of the document provides an overview of the collaboration between the Norwegian
Tax Administration (NTA) and the revenue authorities of Mozambique, Tanzania, and Zambia. The
aim of the collaboration is to enhance revenue collection and taxpayer compliance in these African
countries. The report is divided into two parts: the first part focuses on the initiation and activities of
the project in the three countries, while the second part explores broader lessons from institutional
collaborations and capacity building. The report discusses the challenges, constraints, and policy
implications of institutional collaboration and concludes with considerations for the continuation and
sustainable development of the collaboration.
1. Defining institutional collaboration
Institutional collaboration refers to partnerships or collaborations between organizations where both
parties work together to achieve common goals and objectives. It emphasizes the importance of
mutual understanding, open communication, and demand-driven development assistance.
Relationships between users and the institution itself can alter as a result of institutional
development, which can happen at the individual, organizational, and institutional levels.
Adjustments at both levels are necessary for sustainable progress. The transmission of knowledge at
any level is referred to as capacity building, yet institutional growth may not happen for years.
Institutional development, also known as institutional twinning, is a long-term interventionist
approach that focuses on increasing organizational capacity through partnerships between two
organizations. A balanced relationship is necessary, though, as both parties share knowledge and
skills and grow from one another. The overall goal of institutional collaboration is to build capacity
at different levels in order to bring about sustainable change.
2. Roles and responsibilities
The paper delineates the respective tasks and responsibilities of the Norwegian Tax Administration (
NTA) in the partnership with the revenue authorities of Tanzania, Zambia, and Mozambique.
The NTA and the Norwegian embassies in each nation are significant stakeholders in the "Tax for D
evelopment" program, which is overseen strategically by the Norwegian Ministry of Foreign Affairs.
The Norwegian embassies are in charge of providing funds and overseeing the institutional cooperati
on among the three nations. They also offer guidance on coordinating efforts and assistance in fortify

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ing the national tax system.
In addition to overseeing the finances, Norad, the Norwegian Agency for Development Cooperation,
also approves draft agreements between the countries.
The NTA works closely with the revenue authorities in Mozambique, Tanzania, and Zambia to build
specialized technical expertise and improve their capacity for revenue collection and taxpayer
compliance. The NTA advisers involved in the projects collaborate with the local tax authorities to
implement specific activities focused on areas such as tax audits, compliance strategies, auditing
skills, and interactions with taxpayers.
The Norwegian Embassy and Norad provide funding, manage the resources, and receive
reports on the progress of the collaboration. They are responsible for signing agreements between
the governments and monitoring the implementation of the program. The embassies also facilitate
the visits, provide advice on travel and relevant contacts, and coordinate activities with other donor
initiatives.
It is important to note that capacity constraints within the NTA, such as limited availability of staff
with specialized expertise, can impact the project design and activity plans. The NTA aims to
address this issue by recruiting a broader pool of staff and promoting the institutional development
program within the organization. Other lessons from previous capacity-building projects highlight
the importance of demand-driven and well-prepared collaborations, long-term planning,
coordination, flexibility, and strong capacity and skills of the adviser teams.
Overall, the roles and responsibilities in the collaboration involve strategic oversight by the
Norwegian Ministry of Foreign Affairs, funding and management by the Norwegian Embassies and
Norad, technical assistance and capacity building by the NTA advisers, and coordination and support
from the local revenue authorities in the partner countries.
3. Background for the collaboration and activities
The collaboration and activities between the Revenue Authorities in Mozambique, Tanzania,
Zambia, and Norway through the Norwegian Tax Administration (NTA) were initiated in response
to the request for technical assistance from the African countries. The first phase of the capacity-
building projects involved scoping missions and visits by short-term Norwegian advisers, with the
addition of an adviser from the IMF in Zambia.
The visits were organized by the revenue authorities of Tanzania, Zambia, and Mozambique, who al
so assigned their management and employees to meet and collaborate with the NTA teams while the
y were there. There was also practical support in the form of transport, visas, and admissions.
The NTA and its African partner groups collaborated to design the activity plans for the capacity-

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building programs.
Building specialist auditing capacity for large international firms was recognized as a top priority by
all three revenue authorities, but the partnerships' early phases differed in each nation and there was
no attempt to standardize the approach to capacity building or the contractual arrangements.
The table provided gives an overview of the status of the projects in each country as of May 2012,
including the signing of memoranda of understanding between NTA and the revenue authorities,
agreements between the governments, and institutional agreements between NTA and the revenue
authorities.
The focus of the work in each country varied, with Mozambique focusing on strengthening technical
skills in tax audits with a special focus on international companies in the oil and gas sector, Tanzania
focusing on analytics, business intelligence, compliance strategy, auditing skills, taxpayer interaction
methods, and international taxation, including natural resources and transfer pricing, and Zambia
focusing on improving taxpayer compliance with a specific focus on mining and large taxpayers.
The length of the first project phase was four years in each country, with the intention to extend if
successful. By May 2012, the institutional agreement between the NTA and the revenue authorities
had been signed in Zambia, while it was not in place in Mozambique and Tanzania at that time. The
agreement between the governments based on the program document was also not in place in
Mozambique and Tanzania.
3.1 Norwegian support to strengthen the tax administration in Zambia
In 2006, Zambia and the Norwegian Embassy collaborated to improve the mining tax system, based
on World Bank and IMF studies. With support from Norway, Zambia commissioned studies and
received external advice. In 2007, a multi-donor fund was established to support revenue
management in the extractive sector. Norway developed a mining tax model and trained Zambian
government staff. In 2008, a consultancy assessed Zambia Revenue Authority's capacity. From 2010
to 2014, the Norwegian Embassy funded a program to enhance ZRA's taxpayer administrative
capacity in mining tax assessment, auditing, and enforcement.
3.1.1 Cooperation between NTA and ZRA
The cooperation between the NTA (National Tax Administration) and ZRA (Zambia Revenue
Authority) is aimed at developing capacity in mining related tax administration in Zambia. This
partnership is crucial in ensuring effective and efficient tax administration within the mining sector,
which is a significant contributor to the country’s economy.

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 Background:
Zambia has a rich mineral resource base, including copper, cobalt, and other valuable minerals.
The mining sector plays a vital role in the country’s economic growth and development. However,
ensuring the proper collection of taxes from this sector can be a complex task.
Both the NTA and ZRA recognize the need to enhance their capacity in mining-related tax
administration. The partnership between these two organizations aims to address the specific
challenges associated with tax collection from the mining industry. By working together, they can
improve their knowledge, skills, and techniques in this specialized area of tax administration.
 Activities:
The cooperation between NTA and ZRA involves a range of activities to develop capacity in
mining-related tax administration. These activities may include:
1. Training Programs: Organizing workshops, seminars, and training sessions to enhance the
understanding of tax administration within the mining industry. This could cover topics such
as tax compliance, auditing, reporting, and risk management.
2. Information Exchange: Sharing knowledge, best practices, and experiences between the NTA
and ZRA. This can help identify effective strategies for tax administration, streamline
processes, and improve collaboration between the two organizations.
3. Policy Development: Collaborating on the development of policies and guidelines specific to
mining-related tax administration. This may involve conducting research, analyzing existing
policies, and proposing necessary reforms to ensure effective tax collection from the mining
sector.
 Organization of Work:
The partnership between NTA and ZRA should be organized in a systematic and coordinated
manner. This may involve the following:
1. Forming a Joint Working Group: To supervise the cooperation, officials from both organization
s should form a joint working group.
This team may be in charge of organizing, carrying out, and overseeing the tasks associated with tax
administration pertaining to mining.
2. Assigning tasks and obligations: Outlining each organization's specific tasks and obligations wit

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hin the partnership
This will support efficient coordination and collaboration in accomplishing the goals of building cap
acity in mining-related tax administration.
3. Frequent Communication and Reporting: Putting in place procedures for the NTA and ZRA to
communicate and report on a regular basis
This will make it easier to share information, provide updates on progress, and handle any problems
or obstacles that may come up when the partnership's actions are put into action..
In conclusion, the cooperation between the NTA and ZRA aims to build capacity in mining related
tax administration in Zambia. By working together, both organizations can enhance their knowledge
and skills in this specialized area, leading to improved tax collection from the mining sector and
driving the country’s economic growth and development.
3.2 Norwegian support to strengthen the tax administration in Mozambique
The Norwegian Petroleum Directorate has been collaborating with the National Institute of
Petroleum (INP) for many years, even before the partnership between AT and NTA began as part of
the Oil for Development program. This collaboration has been essential in the oil and gas sector
work of NTA and AT. The collaboration is based on personal connections and a mutual
understanding of collaboration methods and communication, which were already established in INP,
one of the key institutions in the sector (INP 08.11.11).
The longstanding collaboration between Norway and Mozambique in the petroleum sector laid the
foundation for INP’s direct involvement in a tax audit team in 2011, alongside AT and NTA. INP
and AT appear to have developed good working relations with a mutual exchange of information.
AT is planning to evaluate the experiences thus far and determine whether it would be beneficial to
continue including INP in audits (AT 09.11.11).
The NTA team is based at AT but visits INP when they require data. INP is acquainted with NTA’s
team leader, Håvard Holterud, from previous projects in Mozambique (INP 08.11.11).
To strengthen tax administration in Mozambique, Norway has been providing support
3.2.1 Cooperation between NTA and AT
The National Tax Authority (NTA) and the Tax Administration (AT) have teamed up to enhance
capacity in petroleum-related tax administration in Mozambique. This partnership has been
established to address the specific needs and challenges in this sector and aims to improve the
effectiveness of tax administration in the petroleum industry.

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 Background for the Cooperation
Mozambique is a country with significant potential for growth in the petroleum sector. With the
recent discovery of extensive offshore gas reserves, the government is keen to maximize the
revenue generation from this industry. However, the administration of taxes in the petroleum
sector requires specialized knowledge and skills. To meet this demand, the NTA and the AT
have joined forces to develop capacity in this field.
 Activities of the Cooperation
the partnership between NTA and AT involves several activities aimed at strengthening
petroleum-related tax administration. These activities include training programs, knowledge
sharing sessions, workshops, and technical assistance. The focus is on building the capacity of
both organizations to effectively administer, monitor, and collect taxes in the petroleum sector.
The activities are designed to improve tax compliance, enhance financial management, and
ultimately increase revenue generation.
 Organization of the Work
The work between NTA and AT is organized through a collaborative approach. Both organizations
contribute their expertise and resources to ensure the success of the partnership. The collaboration
involves sharing best practices, exchanging knowledge, and jointly implementing capacity-building
programs. Regular meetings and consultations are held to evaluate progress, identify challenges,
and develop strategies for improvement.
In conclusion, the partnership between NT A and AT in Mozambique aims to develop capacity in
petroleum-related tax administration. Through various activities, both organizations are working
together to enhance tax effectiveness, compliance, and revenue generation in the petroleum sector.
3.3 Norwegian support to strengthen the tax administration in Tanzania
The Norwegian government has provided financial support to Tanzania to help strengthen its tax
administration. This support includes funding consultants to develop a mining tax model and
providing training on its use. The government of Tanzania has established a core modeling group to
oversee this work, consisting of economists from various public institutions. The Tanzania Revenue
Authority’s Department of Research, Policy, and Planning is hosting the secretariat for this group.
The plan is to continue providing training and technical assistance based on demand, as well as
conducting specialized tax audits and building capacity on natural resource taxation. Norway is also
funding a project on tax and non-tax policy in the Ministry of Finance, which includes supporting a

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task force on tax policy and dialogue, a working group on updating tax legislation, and general tax
policy analysis.
3.3.1Cooperation between NTA and TRA
The National Tax Administration (NTA) and Tanzania Revenue Authority (TRA) have formed a
partnership to improve the efficiency of administering large taxpayers in Tanzania. The partnership
aims to enhance compliance, increase transparency, and streamline tax administration processes.
Activities include sharing best practices, conducting joint training programs, and exchanging
knowledge. A dedicated team will oversee the partnership, identifying areas for improvement and
developing strategies to enhance tax administration for large taxpayers.
NTA and African partner institutions have identified positive lessons and challenges in their
institutional partnerships, particularly the importance of working with Norwegian embassies for tax
officers.
Positive lessons from Zambia, Mozambique, and Tanzania include the NTA's team coordinator's
assistance in scheduling, Norwegian institutions' collaboration in the petroleum sector, and the
project's initiation based on Zambia's experiences, demonstrating synergies and economics of scale.
Perceived risks include capacity constraints within NTA, lack of experience and understanding of
the partner countries’ cultural, economic, and political settings, language barriers, coordination with
other activities and initiatives, irregular workflow on project tasks, maintaining enthusiasm when
expectations are not met, difficulty measuring progress and evaluating results, and concerns about
gender equality and corruption risks related to funding.
In Part II of the report, good practices in institutional development are discussed, drawing on
experiences from other partnerships to address the identified risks and challenges.
Overall, the lessons learned and risks identified provide valuable insights for the continued
collaboration between NTA and the revenue authorities in Mozambique, Tanzania, and Zambia.
4. Choices on how to structure the work
4.1 Balancing the partnership
The balance between the influence and power of partners in donor-funded partnerships is crucial, as
funding dependency can distort the balance and limit knowledge transfer. Collaborations often
require donor support, leading to rent-seeking and dependency. An assumption of donor country
superiority can create tensions in institutional partnerships. Organizations receiving substantial

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external grants are more accountable to funders than to partner institutions, limiting focus areas and
impacting the relationship's balance.
4.2 Modes of collaboration
Institutional collaboration projects can be structured through various modes, including short-term,
long-term, medium-term, home-based, and resident long-term advisers. Each mode requires specific
skills, language barriers, and sustainability. Effective follow-up and coordination are crucial.
5 Dealing with capacity constraints
Dealing with capacity constraints is an important aspect to consider when developing institutional
partnerships between the Norwegian Tax Administration (NTA) and African revenue authorities.
While the partnerships aim to assist capacity building in African institutions,
6. Dealing with unforeseen circumstances
Dealing with unforeseen circumstances is a crucial aspect of capacity-building in tax administration.
Here are some strategies that can be employed: Dealing with unforeseen circumstances requires
flexibility, political economy analysis, maintaining motivation, building technical knowledge and
skills, and considering long-term sustainability. These strategies can help ensure that capacity-
building efforts remain effective and adaptable in complex environments.
7. Coordination of activities
Coordination of activities is essential for the successful implementation of efforts to modernize and
strengthen revenue administrations in African countries. This coordination involves several aspects,
including coordination with public planning, reforms, and strategies; coordination with other donors;
and coordination with other ongoing Norwegian initiatives.
In terms of coordination with public planning, reforms, and strategies, it is important to ensure that
all reform efforts and capacity-building activities are aligned and harmonized. This means that
efforts to build capacity at the operational level, such as those conducted by the NTA, should be
coordinated with other reform efforts that aim to achieve the same goal through different methods.
8. Measuring impacts and progress
Measuring impacts and progress is crucial for the success of a project. Reviews and evaluations
conducted at different stages of the project help identify any mistakes or challenges and allow for
adjustments to be made. Waiting until after the project has concluded to conduct evaluations poses a
risk of identifying these issues too late. This helps institutionalize the knowledge gained from the
project over time.

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10. Considerations for the continuation of the collaboration
The report suggests several considerations for the continuation of the collaboration between NTA
and the revenue authorities in Mozambique, Tanzania, and Zambia.
Firstly, it is recommended to create program documents for the partnership and sign agreements.
These documents will help establish clearer milestones, manage expectations, and create a
framework for monitoring and evaluating progress. Signing agreements based on approved program
documents will also secure institutional ownership of the collaboration.
Secondly, it is important to continue working closely with the Norwegian embassies in the
respective countries. The support and engagement of the embassies have been crucial in the initial
phase of the project. Coordinating the work with national plans, other donor funding, and basket
funding can strengthen the collaboration. Prioritizing countries where there is a Norwegian Embassy
is also recommended for possible expansion of the tax administrative work.
Thirdly, the sustainability of the project should be considered on a continuous basis. While political
and economic factors can threaten sustainability, close follow-up at the home office of the NTA
advisers is important. Measures such as establishing an international unit, having a home-based
coordinator for each country project, and creating visibility for activities can help ensure
sustainability and support from donors.
Strengths:
1. Knowledge Sharing: One of the key strengths of tax administrations working together is the
opportunity for knowledge sharing. In the case of the initial phase of cooperation between the
Norwegian Tax Administration and the Revenue Authorities in Mozambique, Tanzania, and
Zambia, this collaboration likely allowed for the exchange of best practices, expertise, and
technical know-how. This can lead to improved tax administration processes and systems in
the participating countries.
2. Capacity Building: Collaborative efforts between tax administrations can contribute to
capacity building in developing countries. By working together, these administrations can
enhance their capabilities in areas such as tax policy formulation, enforcement, compliance,
and taxpayer education. This can ultimately lead to more effective revenue collection and
administration.
3. Mutual Benefits: Cooperation between tax administrations can result in mutual benefits for
all parties involved. For instance, the Norwegian Tax Administration may gain insights into

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the specific challenges faced by developing countries in tax administration, while the
Revenue Authorities in Mozambique, Tanzania, and Zambia can benefit from the
experiences and strategies employed by a more developed tax authority.
Weaknesses:
1. Resource Constraints: One of the challenges associated with tax administrations working
together is resource constraints. Developing countries may have limited financial and human
resources to fully engage in collaborative initiatives. This can hinder the implementation of
joint projects and limit the impact of cooperation efforts.
2. Sustainability: Sustaining long-term cooperation can be challenging due to changes in
leadership, political priorities, or funding availability. Without sustained commitment from
all parties involved, the initial phase of cooperation may not lead to lasting improvements in
tax administration practices.
3. Differing Priorities and Objectives: Tax administrations may have differing priorities and
objectives based on their unique national contexts. Aligning these priorities and objectives
within a collaborative framework can be complex and may require careful negotiation and
compromise.
Conclusion:
In conclusion, the initial phase of cooperation between the Norwegian Tax Administration and the
Revenue Authorities in Mozambique, Tanzania, and Zambia presents both strengths and weaknesses.
While knowledge sharing, capacity building, and mutual benefits are potential strengths of such
collaboration, resource constraints, sustainability issues, and differing priorities pose challenges. It is
essential for these tax administrations to address these weaknesses through sustained commitment,
flexible resource allocation, and a shared understanding of common goals to ensure that their
cooperative efforts lead to meaningful and lasting improvements in tax administration practices.

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