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Centre for Tax Policy and Administration

Successful Tax Debt Management: Measuring Maturity and Supporting Change

 

Photo credits: © Alexander Supertramp – Shutterstock.com

Published: 28 March 2019

 

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The size and growth of unpaid tax debt is a key concern for many tax administrations. In many jurisdictions, the tax debt continues to grow despite the introduction of more successful collection strategies. Facing this challenge, tax administrations need to seek even more innovative, co-ordinated, cost-effective and strategic ways to both prevent debt from arising and deal with the collection of tax arrears. This report provides further insights into the elements of a successful tax debt management strategy, supplemented by examples of recent initiatives by tax administrations. In addition, it includes a maturity model that allows tax administrations to self-assess their maturity in tax debt management.

The report consists of three parts:

  • Part I sets out four strategic principles that tax administrations may wish to consider when setting their strategy for tax debt management. These principles focus on the timing of interventions in the tax debt cycle, from consideration of measures to prevent tax debt arising in the first place, to early and continuous engagement with taxpayers before enforcement measures, to effective and proportionate enforcement and realistic write-off strategies.
  • Part II contains an overview of the new Tax Debt Management Maturity Model including the more detailed section of the maturity model covering Strategy and Strategic Principles.
  • Part III contains a compendium of successful tax debt management practices which have been provided by FTA member countries participating in the project.

 

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