Initiative to make tax audits more effective

In a press release, The Organization for Economic Cooperation and Development and the United Nations Development Program announced the launch of an initiative to help developing countries bolster domestic revenues by strengthening their tax audit capacities.

The project, Tax Inspectors Without Borders, will facilitate targeted tax audit assistance in developing countries worldwide.

Tax audit experts will work alongside local officials of developing countries’ tax administrations to help strengthen tax audit capacities, including in relation to international tax matters.

The OECD said the initiative will help countries mobilize much-needed domestic revenues in support of the post-2015 sustainable development agenda.

A number of pilot projects and international tax workshops are already under way, including in Albania, Ghana and Senegal. Evidence gathered from cases in Colombia indicate a significant increase in tax revenue, from US$3.3 million in 2011 to US$33.2 million in 2014, thanks to tax audit advice and guidance, organization leaders said.

“The challenges faced by developing countries are being acknowledged internationally, and we are delighted to mobilize the best experts worldwide in a practical contribution to domestic resource mobilization,” OECD Secretary-General Angel Gurría said during a launch event at a conference in Addis Ababa, Ethiopia.

“The new partnership between the OECD and UNDP on Tax Inspectors Without Borders will significantly extend the global reach of existing efforts to build audit capacity while sending a strong message of international support to developing countries.”

UNDP Administrator Helen Clark said effective domestic resource mobilization is at the core of financing for sustainable development, but efforts to raise domestic resources are often constrained by tax evasion and avoidance, and by illicit financial flows.

A central organizing unit, the Tax Inspectors Without Borders Secretariat, supported by an oversight board of stakeholders, will operate as a clearing house to match the demand for auditing assistance with appropriate expertise.

The Secretariat, composed of OECD and UNDP staff and based at the OECD in Paris, will facilitate full-time or periodic deployment of experts.