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Best Practices in the Tax Administration for Sustained Revenue Increase for Social Development

Best Practices in the Tax Administration for Sustained Revenue Increase for Social Development. Context (1/2). The State ’s capacity of spend or invest depends basically on resources generated by the Tax System . In each decision of spend there is an implicit decision of recover .

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Best Practices in the Tax Administration for Sustained Revenue Increase for Social Development

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  1. BestPractices in theTaxAdministrationforSustainedRevenueIncreasefor Social Development

  2. Context (1/2) TheState’s capacity of spendorinvestdependsbasicallyonresourcesgeneratedbytheTaxSystem. In eachdecision of spendthereisanimplicitdecision of recover. The social investmentisrelateddirectlytotaxburden, becausethatdependsthecapacity of spend.

  3. Context (2/2) • Thelongterminvestmentforsustainabledevelopmentisguaranteedwith: • Tax rules: formanagement of publicfinances, thatguaranteerational use of resources and creation of “anti cyclical” fundstomaintainthe social expenditure. • State’scapacity of generatingsufficientresources– TaxSystem • StrongTaxAdministrationin ordertoimplementthetaxsystem

  4. Principles of TaxSystem TaxSystemmustcomplywiththeprinciples of: Suficiency: isthosethatgeneratestheresourcesrequiredbytheState as establishedin itsdesign General: whenestablishestaxburdensforall as commonduty of citizens; Simple: iftheprocessof compliance and control isclear; Equitable, wheneveryonepaysaccordingtotheircapacitytopay (horizontal equity) and treatedequaltothesame and unequaltothosethat are not in samecircumstances (vertical equity).

  5. Tax Rules Are formal orinformal rules, quantitative and qualitative, toensurethattaxpolicemanagementisprudent; toachieve “taxresponsiblity”. Proposelimitsforindebteness, forrelationbetweencurrent expenses and investment, transparency in budgetmanagement, etc.

  6. “a TaxSystemisworthwhatisworththeTaxAdministrationthatmanagesit”

  7. Tax Control • Efficienttax control detersthenoncompliance and promotesvoluntarycompliance. • Tendencies: • Invoicing control • Intensive use of Information Technologies (IT) • Control of International Taxation

  8. Improved Services Balance between control and facilitation

  9. Improved Services Facilitated compliance should be part of the tax administrations and should operate as part of the State. Facility induces compliance

  10. ResponsibleTax-payingCitizenship Source: Presentedbyrepresentative of CanadaRevenue Agency – CRA- in 45th General Assembly of CIAT, “TaxMorale as a Determining Factor in theImprovement of Effectiveness of TaxAdministration.” 2011 in Ecuador. “A sustainabletaxationsystemisthat in whichtaxpayersconsiderthattaxespaymentis a civicresponsibilitythatallowthemenjoyallrightsthat a canadianresidentorentity has.”

  11. ResponsibleTax-payingCitizenship • In aninquiryperformedby Ernst and Young in the USA, forthequestion “Howmuchinfluence has each of thefollowingfactors in thefactthatyou declare and payyourtaxeswithhonesty?” Theseanswersaboutfactorswere as follows: • Fear of anaudit: 64% • Beliefthattheirneighbors declare and payhonestly:44 % • ThirdpartieswhoreportyourincomestoInternalTaxesServices: 66 % • Its personal integrity: 92% Source: Presentedby Deborah Nolan in Fuente: Presentado por Deborah Nolan in 45th General Assembly of CIAT, “TaxMorale as a Determining Factor in theImprovementof Effectiveness of TaxAdministration.” 2011 in Ecuador.

  12. ResponsibleTaxCitizenship Countriesthatenjoyhigherlevels of voluntarycompliance are those in whichcitizens show a citizenshipwithgreatertaxresponsibility. Itislikeiftherewere a permanenttaxdeal in ordertobuild a beternation.

  13. Institutional Strengthening ProvideTaxAdministration (TA) withpublic servers who are ethically and professionallyunobjectionablemust be a longtermcommitmentof thecountries. TA musthavespeciallawsformanagment of human resources.

  14. Institutional Strengthening

  15. Summary

  16. Conclusion INCOME AND EXPENSES ON BOTH SIDES OF THE SAME COIN

  17. Thanksforyour attentionmontasyapurg@gmail.comgmontas@consultoresparaeldesarrollo.com

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