The international community has made important progress in improving developing countries’ ability to tax multinational enterprises and boost domestic revenue mobilisation.
A leading element of international co-operation efforts is the Tax Inspectors Without Borders (TIWB) initiative – a joint OECD/UNDP programme launched in July 2015 to strengthen developing countries’ auditing capacity and multinationals’ compliance worldwide.
TIWB assistance has delivered nearly USD 500 million in additional revenue for developing countries through April 2019, according to the latest TIWB annual report. The report was presented by OECD Secretary-General, Angel Gurría, and United Nations Development Programme Administrator, Achim Steiner, during a ministerial panel discussion in the margins of the United Nations General Assembly in New York.
With programmes across Africa, Asia, Eastern Europe, Latin America and the Caribbean, the TIWB initiative now covers 98 completed, ongoing and upcoming programmes in 55 countries and jurisdictions worldwide, and is on track to meeting a target of 100 deployments by 2020.
“The concept of TIWB is simple: expert tax auditors are sent to help interested tax administrations in developing countries, where they work side-by-side with local auditors to strengthen their capacity,” Mr. Gurría said. “Tax officials around the globe are gaining the knowledge they need to identify when their big taxpayers are not paying the correct amount, as well as the confidence and skills to engage with them to ensure correct taxes are collected. TIWB is filling an important skills gap, helping address Base Erosion and Profit Shifting (BEPS) and abusive tax avoidance by multinational enterprises,” Mr Gurría said.
The annual report shows that TIWB is excellent value for money. Every dollar invested in TIWB programmes has led to USD 100 in additional revenue. These results have been driven by strong support from a broad range of partners, including regional and international organisations as well as strong donor support. Sixteen countries have so far deployed their serving tax officials to provide hands-on, learning-by-doing assistance to auditors in developing countries. Among the partner administrations are those engaged in South-South co-operation – India, Kenya, Mexico, Morocco, Nigeria and South Africa. TIWB programmes are also supplemented by a UNDP Roster of experts currently with over 50 experts.
The success of the current TIWB model has spurred interest in expanding the initiative to other opportunities including tax crime investigations, joint audits, automatic exchange of information, tax treaty negotiations and dispute resolution. Pilot programmes are already underway in some of these areas.
“Developing countries lose hundreds of billions of dollars each year to tax avoidance, and these lost resources prevent millions of people from getting an education, accessing healthcare, or having acceptable living standards,” Mr. Steiner said. “The TIWB initiative helps capture these significant resources by helping countries to close tax loopholes, improve transparency, and most critically, reduce tax avoidance by multinational enterprise. Our work with a range of industries has resulted in hundreds of millions in additional dollars of tax revenue becoming available for countries to advance their national development priorities and achieve the Sustainable Development Goals.”