Remarks by Angel Gurría,
24 September 2019 - New York, USA
(As prepared for delivery)
Excellencies, Mr. Achim Steiner, Ladies and Gentlemen:
I am honoured to be here alongside Mr. Achim Steiner, Administrator of the United Nations Development Programme (UNDP), to welcome you to today’s event celebrating this important and innovative joint initiative, Tax Inspectors Without Borders (TIWB).
The results of this collaboration have been very fruitful, to say the least. Allow me to provide some insights.
Four years of TIWB
The Tax Inspectors Without Borders initiative was launched in 2015 at the Third International Conference on Financing for Development in Addis Ababa. The initiative’s practical, learning-by-doing, and results-oriented approach has quickly become a vital part of the financing for development architecture. By helping to tackle tax avoidance by multinationals, it provides a crucial avenue for the mobilisation of domestic resources for the implementation of the Sustainable Development Goals (SDGs).
The concept of TIWB is simple: expert tax auditors are deployed to work with interested Host Administrations in developing countries and jurisdictions, and work side-by-side with local auditors. One prime example is the case of Jamaica where TIWB has delivered eight mission tax audit assistance programmes in co-operation with Germany, between 2017 and 2019. During this time, experts observed a significant increase in the auditors’ capacity, increasing their knowledge of international tax matters and procedural skills. It is estimated that from just one of the audit cases selected for review, an additional 4 million US dollars in taxes will be collected.
Moreover, TIWB’s work has been supported by the OECD’s technical competence in tax matters, its network of tax experts, as well as the UNDP's global network of "on the ground" expertise in over 170 country offices.
TIWB delivers concrete results
Over the past four years, TIWB has delivered important results. For example, it has provided invaluable support for more effective auditing of multinational enterprises (MNEs).
For too long, MNEs have been able to use complex and possibly aggressive tax planning, taking advantage of the limited capacity in a number of developing countries’ tax administrations. TIWB is helping to fill this knowledge and capacity gap so that local auditors possess the skills and confidence to apply international tax rules as intended, thereby ensuring that MNEs pay their fair share of taxes where their activities are carried out.
TIWB programmes are also helping developing countries raise additional tax revenues. To-date, these revenues exceed 480 million US dollars. In Africa alone TIWB assistance has increased revenue collection by 310 million US dollars since 2012. This represents excellent value for money, with over 100 US dollars in additional tax revenues recovered for every 1 US dollar spent on operating costs.
TIWB continues to grow
Capitalising on its success, the demand for TIWB continues to grow around the globe. So far, there are over 68 ongoing or completed programmes, and 29 more programmes in the pipeline for countries spanning Africa, the Asia Pacific region, Latin America, the Caribbean, and Eastern Europe. TIWB is well on its way to achieving its target of 100 programmes by 2020.
The initiative has also seen growth with successful “South-South” programmes. The first of such partnerships, between Botswana and Kenya, supported audit cases that subsequently generated an additional 1 million US dollars in increased tax revenues; and sent a strong signal to MNEs in Botswana about the reality of transfer pricing risk.
An all-encompassing overview of the efficacy and results of the TIWB initiative can be found in our Annual Report, which Achim and I are delighted to launch today.
Taking TIWB forward
Looking ahead, the OECD and UNDP will continue to collect more evidence of long-term sustainable impacts that the TIWB has facilitated, including the effects on investment climate, organisational effectiveness, tax morale, and taxpayer compliance.
Moreover, we will continue to collaborate with the international community and focus on promoting further partnerships. In fact, we are delighted to note an increase in the active participation by Partner Administrations. We have already seen 16 countries deploy their expert tax officials, and the UNDP-managed TIWB roster now includes more than 50 tax audit experts.
But we are not stopping there – we have more ambitions and exciting opportunities for growth. This includes support for tax crime investigations, common reporting standard data interpretation, and tax treaty negotiations. Moving forward, TIWB will prioritise cementing partnerships with regional tax organisations and expanding its scope by piloting tax criminal investigation programmes.
Last but not least, TIWB is also an excellent complement to ongoing international tax reform efforts. It underpins the Base Erosion and Profit Shifting (BEPS) actions through the Inclusive Framework, which currently has 134 members and the OECD Forum on Tax Administration, representing 50 leading tax administrations from across the world. TIWB is a critical tool to fight profit shifting because, as the OECD’s Global Revenue Statistics Database indicates, developing countries are more adversely impacted by BEPS due to their heavy reliance on corporate income tax. On average, developing countries corporate income tax constitutes over 16% of tax revenues compared to 9% in OECD countries.
Ladies and Gentlemen:
The international community is at its best when it works together, and TIWB is a paragon in this respect. By working hand-in-hand, the OECD and UNDP have greatly contributed to domestic resource mobilisation efforts across the world, and we can further strengthen our collaboration by ensuring the alignment and impact of resources in support of the SDGs.
We look forward to hearing from the esteemed panel about their experiences with TIWB as an effective capacity development tool for domestic resource mobilisation.
Achim, the floor is yours. Thank you all.