Advancing Open Standards in eGovernment -Tax

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• Advancing Open Standards in eGovernment -Tax

Presentation to eGov Workshop Brussels 19
February 2009 Brussels, Belgium
By Reidar Nybø Centre for Tax Policy and
Administration OECD www.oecd.org/ctp
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• The OECD

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The OECD

• Membership 3 NAFTA, 4 Asian-Pacific countries
  and 23 European countries
• Setter of soft and occasionally hard rules
• A forum for discussing the economic and social
  challenges of interdependence and globalisation
• A provider of comparative data, analysis and
  forecasts to underpin multilateral co-operation

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OECD How it Works
Council
Oversight and strategic direction
Representatives of member countries decisions
taken by consensus
Committees
Secretariat
Analysis and proposals
Discussion and implementation
Secretary-General Deputy Secretaries-General Dire
ctorates
Representatives of member countries and
countries with Observer status work with the OECD
Secretariat on specific issues
Annual budget Funded by member countries grants
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The Committee on Fiscal Affairs
What are we?
A forum for senior policy makers and
administrators
What do we cover?
All international and related domestic tax issues

• Biannual meeting
• Eight subsidiary bodies
• Centre for Tax Policy and Administration

How are we organised?
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The Centre for Tax Policy and Administration

• Forty plus professionals grouped into 5
  divisions
• Treaties/Transfer Pricing
• International Co-operation Tax Policy
• Tax Administration Outreach

What are we?

• Draft reports for the CFA
• Advise other parts of OECD on tax related
  issues (e.g R D)
• Assist governments in their tax reforms
• Compile comparative information
• Co-ordinate with other international
• organisations

What do we do?
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Major Outputs of the CFA

• Model Tax Convention
• Transfer Pricing Guidelines
• Standards on Exchange of Information
• Best Practices Guidelines in Tax Administration
• International VAT/GST Guidelines
• Comparative Analysis and Statistics on Tax Levels
  and Structures
• Anti-Bribery Convention

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How do Issues get onto the OECDs Tax Agenda?

• Politicians (Secretary-General meets Ministers,
  annual ministerial, sector ministerials) e.g. tax
  and growth
• CFA delegates e.g. attribution of income to
  permanent establishment, business restructuring
• Business (BIAC, associations, individual
  companies) e.g. arbitration, CIV/REITS
• Non-OECD countries

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General Tax Reform Principles

• A fairer tax system
• Similar treatment for similarly placed taxpayers
  (horizontal equity)
• Achieve desired allocation of tax burden by
  income level (vertical equity)
• Improved compliance
• An efficient and competitive tax system
• Promoting a competitive and flexible fiscal
  environment
• Making work, savings and investment pay
• Reduce tax-induced distortions
• A simpler tax system
• Reduce compliance costs for taxpayers,
  particularly SMEs
• Reduce administrative costs for tax authorities

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Successful Tax Reform Requires also
Administration Reform

• Tax administrations face challenges due to
  globalisation
• Proliferation of tax shelters and abuse of tax
  havens
• Changing attitudes towards compliance
• The response of OECD tax administrations
• Move to integrated tax administrations
• Administration by segment/function rather than by
  type of tax
• Move to cumulative withholding and information
  reporting
• Improved risk management
• Better access to information
• Use of new technologies
• Good compliance requires good taxpayer service
  and effective reinforcement
• Putting tax compliance on the good corporate
  governance agenda

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Outcome of the South Africa Meeting (2008) What
is Needed?

• Disclosure
• Transparency
• Co-operation
• Trust

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Pressures on Tax Administrations

• Integration of direct and indirect
  administrations
• Delivering social programmes
• Using new technologies to improve tax payer
  service
• Achieving better compliance the role of risk
  management
• Dealing with offshore non-compliance

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Business participation in OECDs tax work

• Business and Industry Advisory Committee to the
  OECD (BIAC)
• Technical Advisory Groups, Business Advisory
  Groups, etc.
• Discussion drafts (www.oecd.org/ctp)
• Public consultations

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Enlarging the OECD

• Current 30 Member countries account for
• 60 plus of worlds GDP
• 70 plus of inward and outward investment

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The Next Wave

• The candidates Estonia, Slovenia, Israel, Chile
  and Russia
• A 2-5 year process
• And at the same time enhancing our involvement
  with the BIICS (Brazil, India, Indonesia, China,
  South Africa) with a view to possible accession
• Continued deepening of partnerships with many
  other NOEs and particularly ASEAN countries

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The Next Wave

• The candidates Estonia, Slovenia, Israel, Chile
  and Russia
• A 2-5 year process
• And at the same time enhancing our involvement
  with the BIICS (Brazil, India, Indonesia, China,
  South Africa) with a view to possible accession
• Continued deepening of partnerships with many
  other NOEs and particularly ASEAN countries

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The OECD in 2020

• All major economies
• Represented on all continents
• Accounting for 80 of worlds GDP/Foreign Direct
  Investment

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Financial crisis Issues

• Tax deductibility of interest favours mortgages
  and corporate leverage
• Tax heavens (trillions of - OECD is forcing
  transparency)
• Ultra light regulation of investment banks
• Excessive risk taking advanced and extremely
  complex securities products (fruit-salads)
• TCP/IP enabled one borderless financial world

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Explore IT to improve compliance and taxpayer
service

• FTA Compliance Sub-group
• FTA Taxpayer Services Sub-Group
• FTA TEA Task Group
• International Co-operation Exchange of
  Information Unit

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SOA and Web services - Tax

• Underlying and enabling solutions based on
  service oriented architectures and web services
  require descriptions of the characteristics of
  these services and the data that drives them
• Use of XML. (Remains open if it is the best)

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Tax Metadata - a Necessity

• Metadata describes characteristics of information
  bearing entities to aid the identification,
  assessment and management of the described
  entities
• Bank account information easy interpretation,
  could be difficult identification
• Income/wealth information complicated
• Common challenge legal framework needed

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FTA TEA Task group (1999)

• Representatives from tax adm and businesses
  (Chaired by F Wall, HMRC, UK and I Lejeune,PwC)
• Development of international agreed guidelines
  and standards for tax accounting software
  (Standard Audit File Tax)
• Major software vendors and accounting bodies are
  encouraged to take these up

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Taxpayer Services Standard Business Reporting

• Creating a financial taxonomy which can be used
  by businesses to report financial information to
  Government
• Using the creation of that to drive out
  unnecessary or duplicated data descriptions
• Enabling use of that taxonomy for financial
  reporting and facilitating straight-through
  reporting for many types of report direct from
  accounting and reporting software

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Promotion of Open Standards and Net Neutrality

• Standard-making processes should be open and
  should encourage competition. We support the
  procurement policies that promote open standards,
  open data formats, and free and open software.
  
• The OECD Civil Society Seoul Declaration (2008)
  

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OECD works with governments, and other
international organisations

• Tax administrations
• Statistics Departments
• Regulatory bodies
• Standardisation organisations

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The end

• Thank you for your attention