Ensuring multinationals pay a fair share of taxes

Tax Inspectors Without Borders is helping local authorities audit multinationals to ensure that the right amount of tax revenue is collected.

What's the issue?

How can developing countries finance their efforts to meet the sustainable development goals? Aid and borrowing are not enough. They need to mobilise domestic resources to finance their development. 

For many countries, better tax collection holds the key. The trouble is that multinational companies are very good at lowering, or even eliminating the tax they should pay. This is a major challenge for developing countries, not least because of a shortage of skilled auditors capable of going head-to-head with the multinationals.

This is about leveling the playing field for tax auditors. It puts developing countries in the driver’s seat to make better use of taxation for raising revenues so badly needed for economic and social development.

James Karanja Head of the Tax Inspectors Without Borders Secretariat

What’s the solution?

Tax Inspectors Without Borders is a joint OECD and UNDP initiative. It helps developing countries in Africa, Asia, Europe, Latin America and the Caribbean build up skills by sending the very best tax inspectors available to work with local teams on complex, real-life audits of big companies.

By providing hands-on assistance and peer-to-peer learning, the programme improves understanding of global tax challenges and helps authorities claw back unpaid taxes. It also provides a new approach for building up tax skills.

Having gained confidence and skills under an initial, successful TIWB programme, the Liberia Revenue Authority now has enhanced capacity to audit multinationals.

One or two years ago, our audit programme was randomly done. We were not auditing the multinationals because we did not have the expertise

Darlington Talerys Commissioner Liberia Revenue Authority Domestic Taxes Department

What's the impact?

As of December 2019, Tax Inspectors Without Borders has helped recover USD 480 million in additional tax revenues for host administrations since 2015. On average, every $1 spent on TIWB leads to $100 in additional revenue.

Tax Inspectors Without Borders has been a game changer for all sides. It has built the skills and competencies of tax auditors and increased their ability to process audits more effectively. But the value of these programmes goes beyond recovered money. It bolsters international co-operation and helps build a fairer world economy. Businesses benefit from a more predictable fiscal climate and tax certainty.

So far 16 partner countries have sent tax officials to countries and jurisdictions requesting audit assistance programmes under Tax Inspectors Without Borders. This includes a growing number of South-South initiatives, in which emerging economies with strong auditing capacity are sharing their expertise with regional neighbours. The initiative works closely with key partners, such as the Forum on Tax Administration (FTA), a consortium of over 53 leading tax administrations worldwide, the African Tax Administrations Forum (ATAF), the European Commission and the World Bank Group (WBG).

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