Supporting Financing for Development in the Era of COVID-19 and Beyond through the Tax Inspectors Without Borders Initiative
This report from the Secretariat covers TIWB activity from January 2019 to June 2020.
Chapter 1 describes TIWB in the fast-moving tax and development landscape. Chapter 2 provides details on TIWB activities, trends and achievements and provides information on results attained. Chapter 3 highlights lessons learned and sets out recommendations from the recent stocktake of the programme. Chapter 4 provides an overview of key international outreach activities and communications, and Chapter 5 highlights significant governance and organisational developments. Finally, Chapter 6 sets out the work plan for the year.
Greater revenue generation and improved tax administration have become critical for the financing of the development agenda, which was recognised in the Addis Ababa Action Agenda in 2015. However, low domestic revenue in developing countries severely hampers their efforts to achieve the Sustainable Development Goals (SDGs). OECD research shows that in Africa, although tax revenues increased by 1.5% of GDP on average between 2008 and 2017, the tax-to-GDP ratio for countries in Africa was around 17.2% in 20191.
The Organisation for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP) launched the Tax Inspectors Without Borders (TIWB) initiative in 2015 to support developing countries in addressing widespread tax evasion and avoidance by multinational enterprises (MNEs). Under TIWB, highly qualified tax experts work alongside tax auditors of developing countries on live tax audits cases of MNEs which help in augmenting revenue and also transfers skills through the unique « learning by doing » process. To date, with 80 ongoing and completed programmes, TIWB, along with its partners, has been able to raise crucial domestic resources from taxes.
As the COVID-19 pandemic has severely constrained the fiscal space available to the developing countries and their capacity to mobilise domestic resources has been severely undermined, the role of the TIWB initiative as a key instrument for improved tax administration as well as broader development and sustainable COVID-19 recovery proposition has been greatly amplified.
Despite the constraints that the COVID-19 crisis has imposed, TIWB initiative not only remains open for business – thanks to measures instituted to support experts in continuing to deliver assistance remotely – but is also expanding its focus to provide support in other areas of taxation – Tax Crime Investigations, Effective use of Automatically Exchanged Information, Tax Treaty Negotiation and Administration, Taxation and Natural Resource Contracts, and Tax and Environment.
This high-level event provided an opportunity to engage with government ministers and senior officials and look at the TIWB approach of bringing countries together to tackle tax avoidance, evasion and Illicit Financial Flows. The panel reflected on how the experiences from the initiative can be utilised to recover from COVID-19 and re-imagining a new future, specifically in the context of the Financing for Development in the Era of COVID-19 and Beyond process.
Virginie Gastine Menou
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