FTA Commissioners meetings in Turkey and Argentina

The Role and Work of the OECD s Forum on Tax Administration FTA Taxpayer Services Sub-group Dublin, 28-30 September 2011 Richard Highfield (Senior Advisor) OECD Centre for Tax Policy and Administration Overview of presentation The Forum on Tax Administration FTA governance issues FTA Commissioners work program FTA Commissioners meetings in Turkey and Argentina Taxpayer Services Sub-group recent developments 2 1

The creation & role of the Forum on Tax Administration The Forum was created as a subsidiary body of the CFA in 2002, in response to growing country interest in administration practices, trends & performance & dealing with the challenges of increasing globalisation and e-commerce. The Forum s role, broadly stated, is to.. Improve taxpayer services & tax compliance by helping revenue bodies increase the efficiency, effectiveness & fairness of tax administration & reduce the costs of compliance Forum s role has evolved over last 7/8 years: 1. BEST PRACTICE IDENTIFICATION 2. COMPARATIVE ASSESSMENT 3. CO-OPERATION 4. CO-ORDINATED ACTIONS TO ASSIST ACHIEVE COMPLIANCE 2003/04 2006/07 2010/11 The Forum in an international context Many tax bodies. FTA is the only body covering all developed economies & the G20; only body with a co-ordination role/focus, and best practice identification. FTA IOTA CREDAF SGATAR COTA CIAT ATAF CATA FTA: OECD Forum on Tax Administration IOTA: Intra-European Organization for Tax Administration ATAF: African Tax Administration Forum SGATAR: South-east Asian Study Group on Tax Administration CIAT: Inter-American Center of Tax Administrations CREDAF: Center for Studies and Meetings by Heads of Tax Bodies CATA: Commonwealth Association of Tax Administrations COTA: Caribbean Organisation of Tax Administrations 2

The Forum vis-à-vis the CFA & other CFA bodies The Forum operates fairly independently & largely sets its own work agenda. The role & some work of other subsidiary bodies has tax compliance-related aspects & requires co-ordination. Working Party 6 Working Party 9 Working Party 10 Taskforce on Tax Crimes & Other Crimes (New) Global Forum on Tax Treaties & Transfer Pricing Global Forum on Transparency & EOI for Tax Purposes Taxation of multi-national enterprises (viz. transfer pricing (TP) guidelines, TP & treaty issues from business restructurings ) Consumption tax (mainly policy issues) 1) Co-operation for dealing with international avoidance & evasion; 2) aggressive tax planning initiatives; 3) TRACE projectdealing with cross-border tax claims Promoting co-ordination and co-operation efforts in dealing with serious tax crimes Engages non-oecd countries on these matters Achieving the standards for transparency and exchange of information across all economies. Taxpayer Services Sub-group s work/other OECD work The OECD e-government Project (based in the Public Governance Directorate) explores how governments can best exploit information and communication technologies (ICTs). Produces reports on best practices & develops frameworks for addressing issues (e.g. cost/benefit analysis, e-services & take-up. It carries out country peer reviews on e-government. These reviews place e-government in a national context, & help identify the strengths & weaknesses of national e-government programs. Recent publications: Towards More Effective & Dynamic Public Management in Mexico (07/2011) Denmark: Efficient E-Government for Smarter Public Service Delivery (12/2010) Rethinking e-government Services: User-centred Approaches (10/2009) 3

The structure and operation of the Forum Forum operations are directed & overseen by a Bureau comprised of 12 countries; convenes 2/year. Bureau is chaired by US IRS Commissioner Shulman & has 3 vice chairs (Australia, France & UK heads of revenue bodies). Forum membership includes around 43 countries- all 34 OECD, other G20 countries (e.g. China, India, & Russia), & selected other countries (e.g. Singapore, Hong Kong). Forum Commissioner s meet around every 15-18 months. The Forum s work program is decided & overseen by the Bureau drawing on country input. The work program reflects the Bureau s assessment of priorities and what can be achieved with available resources. The structure & operation of the Forum STRUCTURE CFA Commissioners Meetings (every 15/18 months) Forum Bureau (12 countries) Chair, US Commissioner VCs, Australia, France, UK Commissioners) Commissionersponsored Projects Specialist Sub-groups 1. SME Compliance 2. Taxpayer Services (viz. e-services) Specialist networks 1. HNW individuals 2. Large business 3. Offshore compliance Chair: 1.Martin Scott (NZ) Chairs: 1 & 3-France; 2. David Williams (USA) 2-Canada Commissioners 4

OECD Secretariat- restructuring & new staff New division created in 2010- International Co-operation and Tax Administration. Four other divisions Director- Jeffrey Owens Division Chief- Achim Pross New recruits International Co-operation Unit Tax Administration Unit Working Party 10 (EOI, ATP, TRACE project) Tax Force on Tax Crimes FTA Commissioners forum FTA priority projects FTA Sub-groups FTA networks Jonathan Leigh- Pemberton (ex UK HMRC) Ronnie Nielsen (secondee Denmark- Scandinavian Funded) Forum Commissioners meetings- key themes Istanbul, Turkey- September 2010 Key themes Large business- Moving from co-operation to co-ordination: Joint audits Working with banks to improve tax compliance Tax compliance as part of the corporate governance agenda Offshore Compliance Buenos Aires, Argentina-January 2012 Key themes Offshore Compliance Engaging with Global Business and Meeting the Performance Challenge/Working Smarter 5

Work products over last 12/18 Months Best practice/ priority projects Joint Audit Report and Joint Audit Participants Guide Addressing Tax Risks Involving Banks Voluntary Code of Conduct for Revenue Bodies/Banks Evaluating the Effectiveness of Risk Treatment Strategies Tax repayments- balancing service & risk assessment objectives Monitoring trends & developments, & comparative assessments Tax Administration in OECD & Selected non-oecd Countries: Comparative Information Series 2010 Developments in the Use of Electronic Services in Service Delivery Programs to Reduce Administrative Burden of Tax Regulations Understanding & Influencing Taxpayer Behaviour Forum products in course of development Reducing opportunities for the informal sector, including the use of electronic payment systems Right from the start a study of successful strategies entailing proactive measures for preventing tax evasion in the SME sector The use of social media in tax administration Security and authentication key issues and challenges in providing modern electronic services and revenue bodies solutions for addressing them (all expected to be finalised in next 1-2 months) Awareness training for auditors on important international issues (e.g. cross-border adjustments/ MAP processes) Enhancing revenue body capability to deal with transfer pricing challenges in shorter timeframes. 6

Forum products in course Working smarter: ** Improving organisation, compliance processes, & legislation to improve cost efficiency/ effectiveness (Netherlands) ** A study of emerging demand management methods and technologies to enhance taxpayer service delivery (Canada) ** Summary report. (all due by December 2011) Origin and role Role of the Taxpayer Services Sub-group TSG evolved from the OECD/CFA/ FSM work on the implications of emerging electronic commerce in the late 1990 s. The Taxpayer Services Sub-group was established to provide a forum for members to share experiences and knowledge of approaches to taxpayer service delivery, in particular through the use of modern technology. To achieve this objective, the Subgroup s mandate calls for it to: periodically monitor and report on trends in taxpayer service delivery, with a particular focus on the development of electronic/online services; examine ways to promote the uptake and use of electronic services by revenue bodies; examine options for cross-border administrative simplification and consistency; and assist, as appropriate, other groups of the CFA. 7

Work of the Taxpayer Services Sub-group Published work products (by broad categories) Nature of work Framework of strategic directions (road map) Comprehensive survey reports of progress and plans Reports on specific applications Reports on facilitating of electronic service delivery Products Framework for the provision of electronic services (2010) Three reports - 2010, 2005, 2000 Standard business reporting, prefilled tax returns (2), email Tax reference model software applications (2), business architecture, social media, security & authentication, increasing take-up of services Framework for the provision of electronic services E-government maturity model TRANSFORMATION Size & complexity of strategy, people processes, & technology issues PRESENCE Post content on Internet INTERACTION Basic search capabilities, downloads, links to other sites, email addresses TRANSACTION Self-service applications, multiple service channels, opportunities for crossagency services Long term goal - single point of contact for constituentsgovernment organisation totally transparent to citizens Value achieved through stepwise progress Individual stages might be skipped but TRANSACTION is typically stepping stone to TRANSFORMATION 8

Work of the Taxpayer Services Sub-group Phase one- Presence Phase two- Interaction Phase three- Transaction Phase. four- Transformation This phase is represented by agencies raising awareness of their purpose and services through a web presence. Phase two represents an environment in which communities can order and execute services online. They may also manipulate information databases, use search mechanisms and linkages to other related sites. Communities are able to equally access government services via many channels (e.g. online, wireless or PDA technologies) of delivery and agencies have begun to reform their business processes such that services can be delivered via a variety of channels as a matter of course. This phase is characterised by a seamless interface and integrated service delivery model in which the relationship between communities, government and business has been transformed. Multiple channels of service delivery are a given & new means of service delivery are being continuously explored. Key finding 2010 Survey of Trends and Developments Contrasted with the situation observed in 2004, there has been considerable progress on many fronts..; however. Phase Presence Interaction Transaction Observations in survey report All revenue bodies demonstrate this characteristic. Most revenue bodies appear well advanced in respect of this characteristic. Transaction services are well developed for most revenue bodies, but a minority of revenue bodies still have substantial progress to make in their usage for the major taxes. Limited use of personalisation capabilities Transformation There are some isolated examples of this (e.g. single sign - ons and whole of government portals), but achieving the vision embodied in this phase is largely the challenge ahead for all revenue bodies. 9

2010 Survey of Trends and Developments Key finding Viewed across all surveyed bodies, whole of government service delivery approaches appear relatively immature but some useful developments were identified for a few countries (e.g. single sign-ons (for authentication purposes), whole of government portals, common citizen and business registration and numbering systems, standardised business reporting, and dynamic sharing of information across government agencies); Putting all these developments together to form a picture of a possible future, the findings clearly point to whole of government approaches representing the next paradigm in government service delivery, suggesting the need for close monitoring by the Forum. FTA: Management of work projects Priorities for new work Bureau not to consider proposals for new work till after January 2011; planning for Forum meeting & lots of work now in course. New procedures: proposals for new work Will require advance preparation of detailed terms of reference (TOR) before project is approved (previously done after inprinciple agreement given). Detailed TOR require: - Context for work and purpose and objectives; - Countries to be involved - Outline of project scope and approach to be adopted - Indicative timetable and key deliverables. TSG ideas can be fleshed out in TORS over next 3-4 months. 10

Purpose of breakout sessions Purpose Frank and constructive discussion. Identify agreed gaps and other weaknesses. Provide feedback for project team and Secretariat on suggestions for improving draft products What we require Summary of succinct comments against the questions raised for discussion. Breakout session 1 (Demand management) Discussion groups Group 1 Group 2 Group 3 Chair Chair Chair Australia Canada USA Austria Belgium Chile France Finland Denmark Germany Italy Ireland OECD Netherlands Japan Mexico New Zealand Norway Korea Singapore Switzerland (2 reps) Sweden Spain OECD Switzerland (2 reps) United Kingdom South Africa Turkey Switzerland (2 reps) Russia China 11

Breakout session 1- Issues to discuss Presenter s discussion issues to be advised during presentation. Is the structure & emerging content of the draft report and tabulations appropriate & useful for revenue bodies? If not, what opportunities do you see for further improvement? Are there any issues/country developments you would like covered in greater depth in the final report? Are there any major gaps? Are there matters raised in the presentation that should be given greater attention in the report? Feedback on the overall findings and recommendations in the draft report. Breakout session 2 (Security & authentication) Discussion groups Group 1 Group 2 Group 3 Chair Chair Chair Austria Belgium USA France Canada Chile Germany Denmark Finland Ireland Sweden Italy Japan Australia Netherlands Norway Mexico New Zealand Switzerland (2 reps) Korea OECD OECD South Africa Spain Singapore Switzerland (2 reps) United Kingdom Russia OECD Switzerland (2 reps) Turkey China 12

Breakout session 2- Issues to discuss Is the structure & emerging content of the draft report and tabulations appropriate & useful? If not, what specific concerns exist? Are there any issues/country developments you would like covered in greater depth in the final report? Are there any major gaps in the study report? Views on draft key findings and recommendations of the report Balanced? Appropriate? Comprehensive? Questions to be considered Role and work of Subgroup 1. Reflecting on the issues examined over the last 10 years, have these been the most appropriate? If not, what issues have not been addressed or given inadequate consideration? 2. Are there opportunities to improve the work processes described? If so, please describe how and in what way. 3. Which, if any, of the abovementioned topics warrants further exploration as a potential work topic? 4. Are there other issues of importance to your revenue body that warrant consideration as part of the FTA/ TSG future work program? 13

Demand Management: Reported country workloads-inaccurate data or highly unusual channel patterns? Country Country citizen population (mln) In-person calls (2010) (mln) In-person calls /total citizen population % Inbound calls (2010) In-bound calls/ total citizen population (%) Inbound calls+ inperson calls (%) Ratio of inbound calls/ inperson calls (8) 15.8:1 Australia (2) 22.0 (3) 0.662 (4) 3.1 (5) 10.11 (6) 46.0 (7) 49.0 Austria 8.4 0.920 **10.9 3.85 35.3 46.2 3.2:1 Canada 33.7 0.240 0.7 23.5 69.7 **70.4 99.0:1 Denmark 5.5 0.40 8.0 3.39 61.6 69.6 7.7:1 France 62.6 17.4 **27.8 11.7 **18.7 46.5 **0.67:1 Hungary 10.0 2.374 **23.7 1.542 **15.4 39.1 **0.64:1 Italy 59.8 10.289 **17.2 1.822 ^^3.0 20.2 **0.30:1 Japan 127.5 3.767 2.95 5.039 ^^3.9 ^^6.85 **1.3:1 Mexico 107.5 7.4 7.0 4.77 4.0 ^^11.0 **0.58:1 Netherlands 16.5 1.0 6.0 14.8 89.7 **95.7 15:1 N. Zealand 4.3 0.219 5.1 3.894 90.6 **95.7 18:1 Singapore 5.0 0.143 2.8 1.02 20.0 22.8 7.0:1 Spain 45.9 3.032 6.6 6.7 **14.6 21.2 2.3:2 Sweden 9.3 3.0 **32.0 5.3 57.0 **89.0 **1.66:1 UK 60.9 3.2 5.0 59.8 98.2 **103.2 20.0:1 USA 307.0 6.4 2.1 82.7 26.9 29.0 13.0:1 Source: Country survey responses 14