On 28 September 2020 the Tax Inspectors Without Borders (TIWB) published their annual report, covering the period from January 2019 to June 2020.
The report notes that the global heath and economic crisis is impacting the ability of developing countries to mobilise domestic resources, and the decline in global trade is leading to a fall in tax revenue from goods and services. Developing countries are generally more reliant on tax revenue from corporate income taxes and are therefore likely to be severely affected by the crisis. Small islands and other countries depending on tourism and hospitality could be the most affected by the crisis for some time into the future.
Multinational enterprises (MNEs) in many sectors, particularly large digital companies are better placed than smaller enterprises to get through the crisis and should continue to pay tax in the developing countries where they operate. TIWB helps to ensure that developing countries are equipped to assess and collect the correct tax due from MNEs.
Up to 30 June 2020 the additional tax revenue collected by developing countries in relation to TIWB programmes amounted to USD 537 million, based on tax assessments in excess of USD 1.84 billion. The TIWB programmes therefore give the host countries a significant return on investment and are good value for money. The host countries have collected on average USD 70 in additional tax revenues for every dollar spent on TIWB operating costs between 2012 and 2020.
The annual report shows that the TIWB programmes grew in 2019/20 with further geographic expansion, a broader range of assistance offered to governments, and follow-up courses for tax administrations that had already worked with TIWB.
As at June 2020 TIWB was involved with 44 jurisdictions with 40 completed projects, 39 projects underway and a further 19 in the pipeline. A total of 23 new programmes were launched in 2019 and in the first half of 2020 a further 7 new programmes began.
There is more South-South co-operation with TIWB partner organisations in countries such as India, Mexico, Nigeria, and South Africa committed to deploying their tax officials as experts on TIWB programmes. TIWB has formed partnerships with regional organisations such as the African Tax Administration Forum (ATAF) and the Latin American Centre of Tax Administrations (CIAT).
The OECD and the United Nations Development Programme (UNDP) consider that TIWB is valued as a practical tool to help developing country tax administrations in capacity building to equip them to audit MNEs. The TIWB model has also helped with input in the area of criminal investigations to combat Illicit Financial Flows (IFFs), and is involved in natural resources and environmental tax issues.
TIWB has launched pilot programmes on the effective use of automatic exchange of information (AEOI) and support for tax treaty negotiation and administration.