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10/15/2021 Fighting tax evasion and avoidance effectively comes down to cooperation and partnerships – both on domestic and international level. Tax evasion and avoidance are illicit financial flows and represent as such serious impediments to achieving sustainable development, eradicating poverty and reducing inequality. Although it is methodically difficult to fully measure the forgone revenue, it is clear that the amounts lost to tax evasion and avoidance are significant. So significant, that they endanger the achievement of the sustainable development goals as governments lack necessary domestic resources. As most recently shown by the Pandora Papers leaks, multinational companies and wealthy individuals go all too often under- or even untaxed and keep accumulating their wealth. In the meantime, governments across the world struggle to finance and provide sufficient public goods and services, like health care, infrastructure or energy. Hence, the road to achieving sustainable development, eradicating absolute poverty and reducing inequality remains bumpy. Against this backdrop, the fight against illicit financial flows is a crucial part of domestic resource mobilisation. The key ingredients are increased transparency about key financial data and cross-border flows, company structures and beneficial ownership information. Having access to such information will help tax administrations to identify as well as prevent tax evasion and avoidance. However, gaining access to this kind of information is not always easy as information is often well-hidden and several sources need to be consulted to collect all necessary data. This complexity is increased in cross-border contexts. Consequently, fighting tax evasion and avoidance effectively comes down to cooperation and partnerships – both on domestic and international level. Due to the complexity and cross-border nature of such schemes, this endeavour cannot be undertaken in domestic isolation. Relevant pieces of information, which are necessary to detect tax crimes and tax avoidance and as a result also deter such behaviour, are widely spread and often only available in foreign jurisdictions, thus practically out of reach for the local tax administration and law enforcement. Consequently, without the cooperation from other jurisdictions the task of accessing relevant and often well-hidden facts remains daunting. Luckily, the ongoing digitalisation of administrations, e.g. widespread communication tools and data analysis software, can serve as a valuable and powerful tool for effective partnerships to counter illicit financial flows. On a domestic level, it is essential that a whole-of-government approach is practiced. This requires a common understanding within government that only through a high degree of coordination and cooperation among all agencies, a country will have a chance to tackle illicit financial flows. This means, instead of leaving the task of identifying first signs of tax evasion and tax avoidance solely to the tax authorities, the investigation of tax evasion to the financial crime units and the persecution to the prosecution, all respective agencies need to be involved and cooperate closely. Other government departments or agencies often possess information that might be relevant for tax authorities, financial crime investigators and prosecutors to detect tax-related illicit financial flows. For example, customs know about imported goods, quality and declared import price, the ministry of mining is in possession of relevant information about the exact business activity and exploited mining sites, and the land registry office has important information on ownership of land and buildings. On an international level, tax administrations need to build bridges across borders. The goal is to make sharing relevant information, joint audits, collection and enforcement activities as easy as possible. Mutual assistance in tax matters and exchange of information are essential tools in the fight against tax-related illicit financial flows. Also here, it is important that not only the respective laws, processes and IT infrastructure are in place, but that those formal relationships transcend to the relationships between people working on these processes in a way that they feel comfortable to work together and share information, their knowledge and experiences. The international community achieved good progress in building partnerships and in agreeing on international standards to effectively fight tax evasion and tax avoidance, but challenges remain. The deal on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy struck on 8 October by 136 countries of the OECD/G20 Inclusive Framework on BEPS shows the high degree of willingness for international cooperation to resolve the existing issues. Despite an unprecedented number of existing exchange and mutual support relationships, there are still many countries making limited use of these opportunities. In many cases, the necessary relationships do not exist yet. With others, such partnerships stand at their beginning and the potential opportunities are yet to be explored.  And here, international and regional tax organisations, such as the Network of Tax Organisations, have a crucial role to play. International and regional tax administration organisations play a vital role to build and deepen existing cross-border partnerships among revenue authorities. They are not only providing technical expertise to their members in order to enable them to formally implement and enforce laws against tax evasion and avoidance. They also bring together tax administrators from different countries to share their experiences and exchange knowledge, to give them a common voice. As such they are crucial platforms to create and strengthen partnerships. By teaming up and creating the NTO, participating tax organisations managed to create such a global network. With this goal in mind, the NTO is proud to announce its first technical conference under the title “BUILDING STRONGER PARTNERSHIPS TO FIGHT TAX-RELATED ILLICIT FINANCIAL FLOWS”. The participation of more than 400 guests from tax authorities, academia, development partners, CSOs and international organisations will provide plenty of opportunities to build such partnerships.

10/25/2021 Building stronger partnerships to fight tax-related illicit financial flows – under this theme the Network of Tax Organisations (NTO) hosted its 1st Technical Conference from 19 to 21 of October. The virtual event brought together experts, practitioners, and decision-makers from around the world. 55 speakers and more than 500 participants from over 100 countries analysed current best practices on the global, regional and national level and identified opportunities for cooperation between tax administrations and various other stakeholders. Financial crimes, including tax crimes, money laundering, and terrorism financing, undermine political and economic interests of all countries, whether small or large, developed or developing. However, for developing countries, financial crimes are a particularly serious threat, as they strip them of scarce resources available for sustainable development. According to the United Nations Conference on Trade and Development (UNCTAD) ‘Trade and Development Report 2020’ revenue losses caused by tax-related illicit financial flows (IFFs) are between $49 and $193 billion annually. The conference provided a platform for broad discussions on the latest international developments in tackling tax crime, the changing nature of tax-related illicit financial flows, practical challenges, and ways forward. The focus was on revenue administrations and their needs. An interactive, fully virtual environment allowed for an in-depth exchange of experiences and best practices. The perspectives of various stakeholders added value to the conference. At the opening of the conference, the moderator Melinda Crane, and the head of the NTO Council Márcio Ferreira Verdi, Executive Secretary of the Inter-American Center of Tax Administrations (CIAT), welcomed participants from over 100 countries. Dr. Maria Flachsbarth, the Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development, underlined in her opening remarks the importance of domestic revenue mobilisation for sustainable development and a need for consolidated global effort to combat illicit financial flows. She highlighted the role of NTO in this process and reiterated the support of Germany to the NTO’s work. Ruud de Mooij, advisor to the Immediate Office of the Fiscal Affairs Department at the International Monetary Fund, also emphasized the threat posed by illicit financial flows, especially to developing countries. He distinguished legal tax avoidance, which is currently the subject of public debate in the context of the “Pandora Papers”, from illegal tax evasion. Different measures are needed to combat these two types of illicit financial flows, Ruud de Mooij explained. The situation in African countries was the focus of Carlos Lopes’ welcoming remarks. The professor at the Mandela School of Public Governance, University of Capetown, took a critical look at the progress made so far in combating illicit financial flows. He called out on rent-seeking behaviour at the basis of the political models, as the persistent problem, hindering the fight against IFFs and voiced the need for a fundamental debate on the structures of African economies. Irene Ovonji-Odida, advocate and member of the UN FACTI High Level Panel and the AU/ECA High Level Panel on Illicit Financial Flows from Africa, highlighted the importance of the conference, given the critical role of the fight against tax-related IFFs for domestic revenue generation. Focusing on current international developments and existing challenges, the opening panel gave an overview of the tax administrations’ approaches and needs in their fight against illicit financial flows. ‘My main take away from this panel is that illicit financial flows are a global challenge that needs to be addressed with both internal and international actions,’ one of the attendees shared after the event. In break-out sessions, participants addressed on the first conference day the role of beneficial ownership in combating tax crimes as well as effective responses from tax administrations to financing of terrorism, money laundering and tax evasion. The second conference day was dedicated to the inter-institutional cooperation and digital tools in the fight against IFFs. In the plenary speakers of national revenue authorities and networks from Asia and Africa as well as a representative of ‘Tax Inspectors Without Borders’ provided insights into how successful tax administrations have been in making use of increased transparency and global data availability. In workshops participants held in-depth discussions about concrete examples of inter-agency cooperation, mutual assistance, enforcing tax compliance in the digital space and using digital tools for tackling tax crime. ‘Lessons learnt and way forward’ was the theme on the third conference day. Participants identified critical areas in the current methods of combating economic and financial crimes and focused on international development efforts in ensuring developing countries’ access to global tax initiatives. The conference concluded with a panel discussing the role of the NTO and tax organisations in the fight against tax-related illicit financial flows and in strengthening international cooperation. By advocating and promoting international, South-South, and inter-institutional cooperation between revenue administrations, law enforcement authorities and other governmental institutions, the conference served as a starting point for continued discussions on strategies to widen collaboration in tackling financial crime. A summary document containing key take-aways and core content from the panels will be available on the NTO website soon. About the Network of Tax Organisations (NTO) Founded in May 2018 in Ottawa (Canada), the NTO brings together nine member organisations that represent over 180 countries worldwide. In order to foster capacity development and internal collaboration among its members, the NTO offers peer-learning activities and opportunities to exchange information and experiences. The NTO Secretariat is facilitated by the International Tax Compact (ITC) and financed by the German Federal Ministry for Economic Cooperation and Development.

10/21/2019 All-African panel on the role of tax administrations in the mobilisation of domestic revenue at CIAT Technical Conference, notably featuring two members of regional tax organisations: Duncan Onduru (CATA) & Babatunde Oladapo (WATAF) An all-African panel on the role of tax administrations in the mobilisation of domestic revenue took place at the  CIAT Technical Conference. Duncan Onduru (CATA) and Babatunde Oladapo (WATAF) were present and shared their expertise. The main question that was discussed was: “How to move away from doing pure tax collection and provide wider tax administration?” Discussions revolved around letting government define their own priorities, stepping up efforts to widen the tax base, organising cross-government dialogues on taxation to secure political ownership and align objectives, and introducing ICT within the tax chain to modernise processes. The Morocco Revenue Authority made a strong case for greater international cooperation to commonly face up to new challenges such as the prediction of future needs for services in the medium/long-run.

02/11/2020 On 27 January 2020, the heads and focal points of ATAF, CIAT, CREDAF, IOTA, and WATAF participated in the 4th NTO Executive Council Meeting. On 27 January 2020, the heads and focal points of ATAF, CIAT, CREDAF, IOTA, and WATAF participated in the 4th Executive Council meeting of the Network of Tax Organisations (NTO). The meeting was moderated by the International Tax Compact (ITC) Secretariat and hosted by CREDAF at the French Ministry of Economy and Finances in Paris. The Secretariat of the NTO communicated apologies from the Secretariats of CATA, PITAA and ATAIC for not being able to attend this meeting and their hope to be able to engage in future meetings. NTO members made considerable progress in setting up the agenda, funding structure and communication strategy of the 1st NTO Technical Conference, which will be held from 13 to 15 October 2020 in Rome, Italy. The conference will be hosted by the Guardia di Finanza. Jointly organised by the nine regional and international tax organisations that comprise the NTO, the conference will serve as a unique opportunity to bring together policymakers and practitioners from over 170 revenue administrations.

05/27/2020 On 7 May 2020, the heads and focal points of all nine NTO member organisations participated in the 5th NTO Executive Council Meeting. On 7 May 2020, the heads and focal points of all nine NTO member organisations (ATAF, ATAIC, CATA, CIAT, CREDAF, COTA, IOTA, PITAA, WATAF) and the Italian Guardia di Finanza participated in the 5th NTO Executive Council Meeting. Held online, the meeting was chaired by Marcio Verdi, Head of the NTO Council, and hosted and moderated by the ITC Secretariat. In light of the impact and consequences of the COVID-19 pandemic, NTO members unanimously agreed to postpone the first NTO Technical Conference, which was scheduled to take place in October 2020 in Rome, Italy. Instead, the conference will take place in October 2021. Its preparation will be integrated in a series of activities linked to the theme of the conference, “tax and crime”. A public webinar on this topic will be held in October 2020 (date TBC). The Secretariats of the NTO member organisations will next meet on 29 June 2020 for an internal webinar on “Digitalisation and new ways of working”. The sixth NTO Executive Council Meeting will be held on 6 July 2020.

05/29/2020 The Inter-American Center of Tax Administrations (CIAT) has published a series of webinars on ICT tools in tax administrations The Inter-American Center of Tax Administrations (CIAT) has organised a series of webinars based on their recent publication: “ICT as a Strategic Tool to Leapfrog the Efficiency of Tax Administrations“. Several NTO members have participated, incl. the West African Tax Administration Forum (WATAF) and Pacific Islands Tax Administrators Association (PITAA), and shared the learned information with their respective tax administrations. The recordings of the following webinars are now available online: “Strategy deployment through project management and organizational change management” (Presentation, recorded webinar) “The application of ICT on the tax administration core processes” (Presentation, recorded webinar) “Why improve tax administrations and how ICT trends leverage the institutional development” (Presentation, recorded webinar) “Management of ICT in tax administrations to ensure business continuity” (Presentation, recorded webinar)

06/04/2020 The Intra-European Organisation of Tax Administrations (IOTA) has published a new book on “Applying New Technologies and Digital Solutions in Tax Compliance”. The Intra-European Organisation of Tax Administrations (IOTA) has published a new book on “Applying New Technologies and Digital Solutions in Tax Compliance”. The book contains articles from the presenters of the 3rd IOTA Annual International Conference, “The Tax Compliance Technology Showroom”, which was hosted by the Georgian Revenue Service on 16-17 October 2019 in Tbilisi. The 3rd IOTA International Conference reiterated and emphasised the importance of partnerships between tax authorities, software developers, businesses and academia when building a bridge between the technology world and a very focused tax environment. The IOTA book offers information about some of the innovative projects and potential solutions utilising cutting-edge technology that empowered tax administrations to facilitate, improve and encourage compliance with tax obligations. Click here to download the publication.

07/10/2020 On 6 July 2020, the heads and focal points of all nine NTO member organisations participated virtually in the 6th NTO Executive Council Meeting. On 6 July 2020, the heads and focal points of all nine member organisations of the Network of Tax Organisations (NTO) – ATAF, ATAIC, CATA, CIAT, CREDAF, COTA, IOTA, PITAA, WATAF – as well as the International Tax Compact (ITC) and the Italian Guardia di Finanza participated in the 6th NTO Executive Council Meeting. Held online, the meeting was chaired by Marcio Verdi, Head of the NTO Council, and hosted and moderated by the International Tax Compact (ITC) Secretariat. NTO members notably discussed the planned study on NTO financial sustainability, virtual events aimed at supporting revenue administrations in face of the Covid-19 pandemic, and a suggested work plan for a series of activities linked to the issue of tax & crime. This series of virtual events will culminate with the organisation of the 1st NTO Technical Conference which will be held in October 2021 in Rome, Italy, and hosted by the Guardia di Finanza. The representatives of NTO members will next meet on 18 August 2020 for the 2nd NTO General Assembly.

08/27/2020 On 18 August 2020, the heads and focal points of eight NTO member organisations, the NTO Secretariat and Guardia di Finanza participated in the NTO General Assembly, which took place virtually. On 18 August 2020, the heads and focal points of eight member organisations of the Network of Tax Organisations (NTO) – ATAF, ATAIC, CATA, CIAT, COTA, IOTA, PITAA, WATAF – as well as the International Tax Compact (ITC) and the Italian Guardia di Finanza participated in the 2nd NTO General Assembly. Held online, the meeting was chaired by Marcio Verdi, Head of the NTO Council, and hosted by the ITC, which facilitates the NTO Secretariat. The NTO members reviewed the work plan of 2019/2020 and discussed the new work plan for 2020/2021. They approved the amended governance document describing membership policies, roles and responsibilities, governance structure and procedures, and guiding principles of cooperation. In addition, they voted on the new NTO Council (ATAF, CIAT, CATA, IOTA, PITAA) as well as the Head of Council (Marcio Verdi). Among other topics, the NTO members decided to hold a minimum of four NTO Council meetings a year and to create a subcommittee to work closely on the NTO Technical Conference taking place in October 2021. The representatives of NTO members will meet next on 24 November 2020 for the 8th NTO Council Meeting.

10/07/2020 FIRST WEBINAR: “ILLICIT FINANCIAL FLOWS – THE IMPACT ON TAX ADMINISTRATION ACTIVITIES AND BEST PRACTICES” On the 14 October 2020, the Network of Tax Organisations (NTO) will host the first webinar  on “Tax & Crime”. The webinar will focus on Illicit Financial Flows (IFFs), discussing the impact of IFFs on tax administration activities as well as recommendations on best practices pursued by countries.   During the 4th NTO Council Meeting held in Paris in January 2020, tax and crime was identified as the central topic for the 1st NTO Technical Conference that will take place in Rome in October 2021. While IFFs are known to have a negative effect on political and economic interests of countries, as they undermine the sustainability of public finances and cause wider threats to national security, revenue authorities face significant barriers in addressing this issue. In this context, collaboration between revenue administrations can be crucial – enabling maximised reporting and information sharing on suspected tax and other financial crimes. In order to broaden the discussions on IFFs, NTO members decided to organise a series of webinars, providing a space for sharing experiences on best practices among an international audience of tax administrations. The first webinar taking place on the 14 October 2020, from 13:30 – 15:00 (UTC) will deal with issues such as identifying and addressing new forms of IFFs, the impact of IFFs on tax administration activities, as well as strategies and preventive measures against the grey economy and financial crimes. The webinar will introduce the topic of tax and crime, followed by presentations from NTO member tax administrations, a panel discussion along as well as a Questions & Answers (Q&A) session. The webinar will be conducted in English with simultaneous translation to French. For further information on the event, click here. All tax officials affiliated to NTO member organisations are kindly invited to register and participate. Please contact secretariat@taxcompact.net for further information on the registration procedure.