Tax rider without borders

taxpayers without borders

OECD countries. Dark blue: Basic members. Middle blue: Other members. Map: Cflm001 / Emuzesto / Simon Eugster / Vardion. License: CC BY-SA 2.0

Finance officials from developed countries to help developing countries raise revenue

The Organization for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP) on 13. July in the Ethiopian capital Addis Ababa the initiative "Tax Inspectors Without Borders" (TIWB) presented. In their framework, helpers from the 35 OECD countries (and from other countries, as UNDP points out to Telepolis) travel to developing countries, where they are supposed to help the local tax authorities to increase tax revenue.

The helpers can apply online. Readers hoping to settle old scores with international telecommunications companies or hardware manufacturers will be disappointed: The OECD only accepts experts who have at least five years of experience as tax auditors or in a similar role. Retired tax officials are especially targeted – but active ones are also allowed to apply if their employer allows it. Each TIWB assist lasts at least one week. Eight to 12 weeks of support within a six month period is typical.

taxpayers without borders

OECD countries. Dark blue: Basic members. Middle blue: Other members. Map: Cflm001 / Emuzesto / Simon Eugster / Vardion. License: CC BY-SA 2.0

Before the program was launched, it was successfully tested in several pilot projects and by other organizations: The press release highlights Colombia, where TIWB reportedly increased a pilot tax revenue tenfold in three years. The United States Agency for International Development (USAID) was similarly successful in El Salvador, generating $350 million per year in additional revenue over six years with a $5.3 million effort.

In Burundi – a country whose customs and tax authority topped Transparency International’s list of the most corrupt organizations and institutions in East Africa in 2010 – the British Department for International Development (DFID) helped increase revenue by 37 percent from January to June 2011 and by 14 percent from July to September compared with the previous year’s level. In neighboring Rwanda, where DFID helped draft tax laws and regulations, revenue increased sixfold in ten years. In Ethiopia, where DFID helped expand the capacity of tax authorities, tax revenues increased by 87 percent between 2010 and 2017.

One focus of the TIWB program should be international tax matters. Allegedly, success has already been achieved in combating transfer pricing abuses: In what can only be described as "Country A" the country is said to have received $170 in extra taxes for every dollar spent on the review. However, it is unlikely that TIWB helpers will be able to stop the abuse of tax avoidance schemes such as the Dutch Sandwich and the Double Irish: this did not succeed in Europe either, as long as the politicians did not play along.

The TIWB program particularly welcomes specialists in the fields of land resources, financial services, telecommunications and electronic commerce. But experienced officials from other fields can also help, for example, in selecting traps for closer scrutiny – so as to avoid spending scarce resources on work that is likely to come to nothing. And in the exchange of audit techniques, perhaps not only tax auditors in developing countries could learn something, but also the aid workers.