Transcript Auditing SMEs - African Tax Administration Forum

Organisation for Economic Co-operation and Development
Large Taxpayer Units
Tax Administration of Large
Business
1.Introduction
Nairobi, 14 – 18 February 2011
Centre for Tax Policy and Administration
Your presenters and helpers
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Matthijs Alink ( OECD Centre for Tax Policy and
Administration)
Andrew Okello (IMF)
Peter-Paul Aalbers (DTCA, the Netherlands)
John Njiraini (KRA, Kenya)
James Mburu (KRA, Kenya)
James Obell (KRA, Kenya)
? (SARS, SA)
Objectives for the seminar
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To increase understanding of international practices and
developments in the area of Tax Administration of Large
Business
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To promote discussion among officials.
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To identify new ideas for improving Tax Administration
of Large Business
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To encourage officials to consider improvements to their
administration based on their assessment of
international practices and Tax Administration needs.
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To answer specific issues raised by participants.
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Our approach to your interests and
concerns
*** During the course of the seminar, we will aim to answer
any questions raised by participants.
*** Language differences/ translation may complicate your
understanding of what is being presented or we don’t
fully cover issues of interest to you –
please to ask questions!!!!
*** Practices from country to country vary significantly due
to political, legal, historical, cultural and economic
factors.
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Tax Administration of Large Business
Seminar outline:
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The OECD and its work on taxation
General introduction on Tax Administration and trends
Importance of Large Business Taxpayers
Improving taxpayers’ compliance - need for a strategic approach
General overview of the international practices for the management of
Large Business
Identification and Selection of Large Business (Definition and Criteria
used)
Characteristics of Large Business
Tax Administration of Large Business
Seminar outline:
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Responsibilities, mission and vision statements of Large Business Units
Risk Management practices
Developing a compliance program for Large Business
Auditing strategies and approaches
Organizational structures and work arrangements
Staffing and skills and expertise required for Large Business Units
Performance issues
Structure of course
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Lectures
Workshops
Discussions
Tax Administration of Large Business
2. OECD Work on Taxation
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OECD Work on Taxation
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OECD work on taxation is directed by the Committee on Fiscal Affairs (CFA),
supported by the Centre for Tax Policy and Administration (CTPA).
The CFA sets standards and exchanges views in the tax area on international
and domestic policy and administration issues.
Activities to promote its standards and views include its Outreach Program
delivered for non-members.
Its role is to promote an environment supporting effective fiscal sovereignty
of countries over the design and implementation of tax systems, which reflect
each country’s social, economic, & political preferences.
OECD - Our Mission
To maintain our position as the
organisation of first choice for
countries - OECD and non-OECD –
to work together to develop international
tax standards and identify ways to
improve the design and operation
of tax systems.
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Tax Systems Operate in a Rapidly Changing
Environment
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Financial liberalisation, increased regional integration and new
communication technologies have enabled taxpayers to plan and
operate on a global basis.
Capital, labour and consumption have become much more mobile.
Competitive pressures have encouraged enterprises to restructure
their business to minimise costs, including tax costs.
Economic activity is shifting away from manufacturing to services.
The OECD Tax World: The Structure and Work
of the Committee on Fiscal Affairs (CFA)
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The focal point for the OECD’s tax work is the CFA, serviced by the Centre
for Tax Policy and Administration (CTPA).
Seven Subsidiary Bodies:
Tax treaty issues and related questions
Tax policy analysis and for statistical work
Taxation of multinational enterprises
International tax evasion & avoidance, & the tax-related aspects of
bribery
Consumption taxes
The Forum on Harmful Tax Practices
The Forum on Tax Administration
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What does the CFA do?
Sets international tax standards for the global economy; monitor their
implementation; provide mechanisms to resolve tax disputes.
Provides the analytical and statistical basis for good tax policy
Identifies best practices and relevant comparative data for revenue
bodies.
Delivers large program of Outreach events.
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OECD has proven that it is well placed to help
governments respond to these challenges
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Providing the analytical & statistical underpinnings for tax reforms.
Adapting international tax arrangements to the new global environment.
Counteracting the spread of tax havens.
Examining the impacts of taxes on competitiveness & growth.
Linking the Tax and Aid Development Agenda.
Providing guidance & comparative information for Tax Administrations.
Engaging Non-OECD Economies (NOE’s) is
Central to our Mission
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Extending observer ship (current observers: Argentina, China, India,
Russian Federation, & South Africa).
Enlargement (accession candidate: Russia, new membership Chile,
Estonia, Israel, and Slovenia)
Enhanced relationship candidates: China, Brazil, India, Indonesia, and
South Africa
Developing partnerships with key countries in each region.
Creating a global network of multilateral tax centers (e.g.
Ankara, Budapest, Korea, Mexico and Vienna).
Developing joint initiatives (e.g. ITD) with other international
organizations.
International Tax Dialogue
The International Tax Dialogue (ITD) is a collaborative
arrangement involving the IDB, IMF, OECD, UN and
World Bank to encourage and facilitate discussion of tax
matters among national tax officials, international
organisations, and a range of other key stakeholders.
increase cooperation
share good practice, knowledge and experience
improve tax policies and administration
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International Tax Dialogue
Activities have focussed on creating dialogue opportunities
through:
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Online resources
Conferences and forums
Shared technical assistance information
Online resources
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www.itdweb.org is a free, multilingual, multinational
internet site operated by the ITD. The site provides a
mechanism for countries and organisations to share
knowledge and experience with each other, quickly,
easily and globally
www.itdweb.org
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A broad range of both administration and policy topics
are covered:
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Tax policy
Personal & corporate income tax
VAT/GST & sales tax
Other taxes
Domestic tax avoidance &evasion
www.itdweb.org
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A broad range of both administration and policy topics
are covered:
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Taxation of multinationals
Treaties
Other international issues
Tax procedure
Organisation and management of tax administration
Service delivery & community relationships
www.itdweb.org
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Over 3000 documents from a range countries and
organisations are currently available with more added everyday
Documents can be accessed through a tax topic structure, by
keyword, country, date, language, etc
Information is available in 8 languages: English, Dutch, French,
German, Japanese, Norwegian, Spanish and Russian. Online
translation facilities are provided.
Other resources include: news, events calendar, extensive
range of links and contact information for more than 100
countries
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www.itdweb.org
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Success lies in the knowledge and experience national
tax organisations share with one another
 All countries are encouraged to share their
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own information using the site
Adding documents is very quick and easy and can be
done from anywhere in the world
ITD Conferences and forums
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The first global conference was held in March 2005,
in Rome, on Value Added Tax (VAT) topics
240 participants from 97 countries and organisations
The second conference was held in October 2007 in
Buenos Aires considering Taxation of Small and
Medium Sized Enterprises.
Around 250 participants from 73 countries and 9
organizations attended
The third global conference was held in Beijing,
October 2009 on: Financial Institutions and
Instruments – Tax Challenges and Solutions
Tax Administration: Key Areas of Work
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Organisational risk management (incl. note on ‘state of the art’ compliance
measurement indicators & methodologies).
Selected key issues in tax debt collection.
Approaches to large taxpayers’ compliance management, including
corporate governance
VAT abuses: update on countermeasures and their impacts.
Developments with pre-filled tax return systems.
Developments with ‘joined up/whole of government’ service delivery and
use of technology in service delivery.
Taxation of High Net Worth Individuals
Promoting tax compliance with banks
Comparative information series (3rd edition).
Comparative Information Series
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A unique series of tax administration related information on 45
countries, including:
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organizational design features (incl. office networks)
taxes collected and non-tax functions;
service delivery standards
tax return and payment system features;
use of tax withholding;
service delivery standards;
relative tax burden data;
audit and debt collection performance information;
staffing and relative costs of administration;
progress with electronic service delivery;
TIN system features; and
key administrative powers and sanctions.
Seoul Declaration September 2006
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Further developing a directory of aggressive taxplanning
schemes
Examining the role of tax intermediaries in relation to
non compliance
Greater attention to the linkage between tax and
corporate governance
Improving the training of tax officials on international tax
issues, including the secondment of staff from one
administration to another
Cape Town Communiqué January 2008
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Follow up Seoul Declaration: Achieving an enhanced
relationship
Focus on the role of tax intermediaries in aggressive tax
planning has evolved by broadening its focus into a
wider review of the tripartite relationship between tax
administrations, taxpayers and intermediaries.
Report focused on large corporate taxpayers and those
providing them with tax advice.
Enhanced relationship
Main conclusions report (1)
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Tax intermediaries play a vital role by helping taxpayers
understand and comply with their tax obligations
However some are also designers and promoters of
aggressive tax planning
Taxpayers are the ones who decide whether to adopt
particular planning opportunities
Risk management is an essential tool for tax
administrations
Relationship between tax administrations and taxpayers
would be based upon early disclosure of potential tax
issues and transparency
Enhanced relationship
Main conclusions report (2)
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Tax Administrations should base their relationship with
taxpayers and intermediaries upon 5 fundamental
attributes:
Understanding based on commercial awareness
Impartiality
Proportionality
Openness
Responsiveness
Large corporate taxpayers would then be more likely to
engage in a relationship with tax administrations based
on cooperation and trust
OECD website
www.oecd.org
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