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Tax and development: UK announces assistance for Tanzania and Ethiopia

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A new tax capacity building programme funded by the UK’s Department for International Development will help the Tanzanian and Ethiopian governments to put in place more effective tax administration, the government said today as exchequer secretary David Gauke prepared to take part in a debate on tax avoidance.

Gauke will join Catherine McKinnell, shadow exchequer secretary, and the Liberal Democrat MP Stephen Williams, co-chair of the Commons Treasury committee, at an event hosted by the ‘Enough Food for Everyone IF’ campaign this evening at St Martin-in-the-Fields, Trafalgar Square.

Campaigners billed the event as “a major public debate” on tax avoidance and its effects on developing countries. “Money lost to developing countries through tax avoidance and evasion is three times what they receive in international aid,” they said.

In a joint press release, HM Treasury, HMRC and DFID said: “Through the new programmes HMRC and the Tanzanian and Ethiopian authorities will work together to tailor HMRC best practice to the infrastructure and resources available to help these countries to strengthen their tax administration and bring in the tax that they are due.

“The Developing Countries Capacity Building Unit will start work in the summer with the Tanzania Revenue Authority and will begin a second phase of HMRC’s successful twinning with Ethiopian Revenue and Customs Authority.”

Since 2010 there has been an annual 40% increase in revenue collection in Ethiopia, supported by the first phase of HMRC’s partnership with the Ethiopian authorities.

The findings of a “health check” will be used to establish where the programmes should focus: “This could be in areas such as tax inspector training, improving the revenue authority’s website, developing a complaints handling process, or bringing in a risk management system.”