TAX REFORM TO IMPROVE TAX COMPLIANCE

Transcription

1 TAX REFORM TO IMPROVE TAX COMPLIANCE Juan Toro IMF s Fiscal Affairs Department -- Assistant Director 7th IMF-Japan High-Level Tax Conference For Asian Countries Tokyo, April 5-7, 2016

2 Outline Challenges in Revenue Mobilization Managing tax compliance Supporting compliance management

3 CHALLENGES IN REVENUE MOBILIZATION

4 Current Challenges in Revenue Mobilization Improving Tax Compliance At IMF Web site:

5 MANAGING COMPLIANCE

6 Revenue administrations Key for assuring compliance and wider state-building and are large complex organizations Tax Receipts Compared to Revenues of Largest National Companies Percent of GDP USA UK Japan Chile That have been through turbulent times and face rapidly changing environment ahead

7 Organizational management requires. Strong and empowered HQs Streamlined office network Turnover of Commissioners by Region % 60.0% 50.0% Sufficient Autonomy Assuring Integrity 40.0% 30.0% 20.0% 1 Commissioner 2 Commissioners 3+ Commisioners Adequate, stable financing 10.0% 0.0% AFR (31) APD (21) EUR (36) MCD (16) WHD (26)

8 as was an issue during the crisis, Changes in Tax Administration Spending, In percent of GDP Romania Mexico France New Zealand Sweden Korea El Salvador Indonesia Italy Australia Ireland Malaysia Israel Austria United Kingdom Bolivia Russia South Africa Ecuador Demanrk Latvia Honduras Uruguay Iceland Cyprus Argentina Slovenia Canada Poland Singapore Portugal Saudi Arabia Germany United States Chile Japan Belgium Spain Source: CIAT, RA-FIT, OECD

9 And squaring up to challenges, such as Pressure to take major expenditure functions...with a quite different set of clients and needs Change management reform while maintaining revenue performance

10 To do lists: 1. Operational management Better focus, especially in DCs, on main compliance risks Identify compliance gaps and sources Better segmentation of taxpayers to tailor responses More effective audit and collection of tax debts Strengthened taxpayer services Legal changes may be needed Over-reliance on comprehensive audits 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 19% 28% 53% LOW INCOME COUNTRIES (16) Audit Mix, % 25% 23% 50% 52% 25% 23% LOWER MIDDLE INCOME COUNTRIES (20) UPPER MIDDLE INCOME AND HIGH INCOME COUNTRIES (19) 44% 33% Grand Total (55) Desk Audits Issue Oriented Audits Comprehensive Audits

11 2. Information management Back to basics key for reliable data Enhance RA capacity to monitor compliance Front- and back-ends New frontiers and new risks Pre-populated tax return e-invoicing, e-accounting, etc. Extending digital services to banking, accounting sites

12 3. Stakeholder relations (Accountants, industry associations, etc.) Still largely ad-hoc Need for proactive relationship with taxpaying community in developing countries Variety of channels, formal and informal Fairly recent approach of enhanced relationship Risky for countries with weak enforcement capacity

13 SUPPORTING COMPLIANCE MANAGEMENT

14 with new analytical tools 20% RA-GAP: Actual vs full compliance 15% 10% 5% 0% RA-FIT: Collects RA data and establish baselines/benchmarks TADAT: Assessment tool Accountability and Transparency Integrity of the Registered Taxpayer Base Operational Efficiency and Effectiveness Assessment and Mitigation of Risk Tax Dispute Resolution Performance Outcome Areas Supporting Voluntary Compliance Ensuring Accuracy of Reporting Payment of Obligations Filing of Tax Returns

15 TAX REFORM TO IMPROVE TAX COMPLIANCE THANKS FOR YOUR ATTENTION 15