Market leading insight for tax experts
View online issue

‘Tax inspectors without borders’ will mobilise expertise for developing countries

printer Mail

A new initiative to provide international auditing expertise and advice to help developing countries ‘better address tax base erosion, including tax evasion and avoidance’ has been launched by the OECD’s Informal Task Force on Tax and Development.

Stakeholders from business, civil society, developing country governments and the OECD attending last week’s meeting of the task force in South Africa welcomed the launch of ‘Tax Inspectors Without Borders’, and agreed to work together to launch an independent organisation to host a secretariat by the end of 2012, the OECD said.

The initiative was ‘championed’ by Oupa Magashula, Commissioner General of the South Africa Revenue Service; Nhlanhla Nene, South Africa’s Deputy Finance Minister; and Pascal Saint-Amans, Director the OECD’s Centre for Tax Policy and Administration.

The Tax Justice Network said in February 2011 that it had been ‘mooting the idea’ of creating an organisation dedicated to assisting the governments of low-income countries through provision of expertise in tax policies and tax administration. ‘We have provisionally given this organisation the working title of Tax Advisers Without Borders, echoing the incredible achievement of Médecins Sans Frontières,’ the TJN said at the time.

Angel Gurría, OECD Secretary-General, said in a press release last week: ‘Countries helping each other is the only way to effectively fight global tax evasion and avoidance. The idea is quite simple. Tax Inspectors Without Borders will match “demand” from developing countries wanting outside help with complex international tax audits with the “supply” of international experts, drawn mainly from cadres of tax inspectors serving in other tax administrations. Joint teams will operate under the local leadership in each country, based on a learning by doing approach.’

Critics of the reform of the UK’s Controlled Foreign Companies regime, included in the current Finance Bill, have said that the changes could result in a ‘huge increase’ in tax avoidance at the expense of developing countries. HM Treasury has defended the reform, arguing that the key issue was ‘building capacity in developing countries, an area where the UK can and does make a significant contribution’.

At the recent launch of the CBI’s business tax campaign David Gauke, the Exchequer Secretary to the Treasury, said it was ‘very difficult’ for the UK to make an assessment impact of the CFC reform on developing countries, but there was an important role for the UK to play in helping developing countries to develop their tax systems. HMRC had a ‘very good story to tell’ about the help that it had provided in Sub-Saharan Africa, particularly in Rwanda and Uganda, he added.