ATI Work Plan2017 / 2018

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ImprintThe International Tax Compact (ITC) is an informal platform that aims to enhance domestic revenue mobilisation in partner countries, and to promote fair, efficient and transparent tax systems. The Ger-man Federal Ministry for Economic Cooperation and Development (BMZ) has launched the platform in 2009 and commissioned the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH to facilitate the ITC Secretariat. Since April 2017, the European Union is supporting the ITC through a co-financing agreement. The Ministry of Foreign Affairs of the Netherlands (BZ) provides funding for individual activities.

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| 3ATI Work Plan 2017 / 2018

Content

ATI Work Plan 2017 / 2018 ����������������������������������������������������������������������������������������������������������������������4

1) ATI Management ���������������������������������������������������������������������������������������������������������������������������������7

Activities in 2017/18: .........................................................................................................................8

2) Monitoring the ATI Commitments ���������������������������������������������������������������������������������������������������������9

Activities 2017/18 .............................................................................................................................9

3�1) Commitment 1: Collectively Doubling Technical Cooperation in Domestic Revenue Mobilisation �������10

Activities 2017/18 ...........................................................................................................................10

3�2) Commitment 2: Stepping up Domestic Revenue Mobilisation in Partner Countries ����������������������������11

Activities 2017/18 ...........................................................................................................................12

3�3) Commitment 3: Policy Coherence for Development ��������������������������������������������������������������������������13

Activities 2017/18 ...........................................................................................................................13

Summary Activities 2017/2018 ��������������������������������������������������������������������������������������������������������������14

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ATI Work Plan 2017 / 2018

The past twelve months have represented a landmark year for the Addis Tax Initiative: The first ATI Monitoring Report was published and its first flagship event, the ITC/ATI Tax and Development Conference, came to fruition. So far, 20 development partners and 21 partner countries have joined the Initiative, as well as 13 ATI supporting organisations – allowing ATI membership to expand to 54 members. The Addis Tax Initiative has continued to advocate for the recognition of DRM as a key requirement for sustainable development in various inter-national fora – importantly, among others, at the Second High Level Meeting of the Global Partnership for Effective Development Co-operation in Nairobi.

Box 1: The Addis Tax Initiative

The Addis Tax Initiative (ATI) is a multi-stakeholder partnership in the area of domestic revenue mobilization (DRM) that aims to catalyse significant increases in domestic revenue in partner countries and to improve the transparency, fairness, effectiveness and efficiency of tax systems in partner countries.

Participating development partners collectively commit to double their support for technical cooperation in the area of DRM by 2020.

Partner countries restate their commitment to step up domestic revenue mobilisation as a key means of implementation for attaining the SDGs and inclusive development.

All participating countries commit to ensure policy coherence for development.

Commitment I

“The ATI development partners commit to collectively double technical cooperation in the area of domestic resource mobi-lisation (DRM) by 2020.”

Commitment II

“The ATI partner countries commit to step up domestic revenue mobilisation in order to spur development, in line with the ATI key principles.”

Commitment III

“All ATI signatories commit to promote and ensure policy coherence for development.”

”

| 5ATI Work Plan 2017 / 2018ATI Work Plan 2017 / 2018

The first ATI Monitoring Report, which the International Tax Compact (ITC) published this summer, has set the baseline against which the fulfilment of the three ATI commitments will be measured. The extensive contributions by the ATI signatories have enabled the Interna-tional Tax Compact to develop an impressive overview of the current international support to DRM and of the recent and upcoming reform efforts in partner countries. Having this unpre-cedented wealth of centralised quantitative and qualitative information is proof of the great potential that Addis Tax Initiative’s collaborative effort holds and is one central achievement of the Initiative’s work in the past year.

The findings of the 2015 Monitoring Report served as a highly applicable source base and provided important references for the deliberations during Addis Tax Initiative’s first flagship event, the ITC/ATI Tax and Development Conference, held from 14 to 16 June in Berlin. The event brought together 130 representatives from around 40 countries and more than 35 organisations and featured a multitude of participatory formats, enabling fruitful discussions on all current issues revolving around the three ATI commitments.

Box 2: 2015 ATI Monitoring Report

Key findings

The baseline for collectively doubling the ATI development partners’ support for technical cooperation in DRM by 2020 is 223.76 million USD gross disbursements and 237.96 million USD commitments.

ATI partner countries currently lack adequate domestic revenues to finance sustainable development. Major challenges and reform priorities include (but are not limited to) improving taxpayer registration and management; providing automated IT services for taxpayers; strengthening voluntary tax compliance; taxing strategic sectors (e.g. extractive industries); and conducting more efficient and effective monitoring and risk management.

ATI members accept the joint responsibility to ensure policy coherence for development but their understanding of the con-cept and approaches to address it vary widely.

ATIMonitoring Report

2015

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Building on these achievements, the following ATI work plan sets out the initiative’s key prio-rities for the 2017/2018 term. We take into account the insights and recommendations from the 2015 ATI Monitoring Report as well as the feedback received at the ITC/ ATI Tax and Development Conference 2017.

Having established the foundations of the initiative and the monitoring of the ATI commit-ments, the main objective in the upcoming term is to further formalise the initiative, to sup-port the ATI members in fulfilling the ATI commitments and to provide a clear added value to all ATI members.

The main challenge of the upcoming term will be characterized by giving ATI members an opportunity to become more actively involved in the Initiative’s work. For that purpose, three consultative groups to the ATI Steering Committee will be established with the aim of organi-zing and executing activities to support the fulfilment of the ATI commitments.

All ATI members are invited to actively participate in one or multiple consultative group(s) to bring their perspectives into the discussion and to help further develop the Addis Tax Initiative.

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1) ATI Management

ATI Governance: As of August 2017, the number of ATI partner countries (now 21) has surpassed the number of ATI development partners (20). In the upcoming term, in order to reflect the shifted balance in its membership base and to promote partner countries’ participation in the Addis Tax Initiative, ATI governance rules and procedures will be reviewed and formalised in a governance document. The governance document will also provide guidance for the work conducted by consultative groups for the ATI Steering Com-mittee. The effective establishment of these new consultative groups will be crucial for the success of the upcoming term.

In order to take greater advantage of the network of development partners and partner countries in the Addis Tax Initiative, the modalities of how ATI members can approach and work in congruence with the network will be defined in a communication guide.

The ATI governance document and the ATI Communication guide will be presented for approval at the next ATI meeting, which will take place on 13 February 2018 in New York City. The First Global Conference of the Platform for Collaboration on Tax is set to take place directly after, from 14 - 16 February 2018.

Another ATI meeting might be organised in the second half of 2018. The next ITC/ATI confe-rence will take place during the summer of 2019.

Box 3: Current governance structure

Activities in the Addis Tax Initiative (ATI) are overseen by the ATI Steering Committee. It provides strategic guidance, decides on the ATI activities and monitors progress made with reference to meeting the ATI commitments.

The Steering Committee comprises representatives of two large ATI development partners, two small ATI development partners and two ATI partner countries. The Steering Committee is headed by two co-chairs consisting of one representative of an ATI development partner and one from an ATI partner country. Steering Committee members serve for one year, one time renewable.

The governance structure is currently under review. A document detailing the new governan-ce structure will be presented at the next ATI Meeting in February 2018.

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Visibility and Outreach: Information on the Addis Tax Initiative is provided via the ATI website (www.addistaxinitiative.net) as well as through a number of information materials that are used for outreach at relevant DRM events. Most materials are available in English, French and Spanish. ATI members that plan to represent the initiative at relevant DRM events or would like to approach potential new members can request those materials from the Interna-tional Tax Compact. The International Tax Compact will continue to represent the Addis Tax Initiative at relevant international events.

The Addis Tax Initiative is open for new member countries that sign up to the ATI Declaration. Moreover, organisations with a DRM portfolio are welcome to join as ATI supporting organisations.

In the upcoming term, the ATI website will be relaunched to better reflect the latest develop-ments of the initiative and to support the outreach activities of the ATI members.

Further Development of the Addis Tax Initiative: At the ITC/ATI Tax and Development Con-ference, a number of suggestions were made regarding the development of the Addis Tax Initiative. For example, it was proposed to further refine the indicators for monitoring the ATI commitments and to include more stakeholder groups into the Addis Tax Initiative, such as political decision-makers, tax administration officials and civil society. While some of the sug-gestions have already been included in the 2017/2018 ATI work plan, others will be further deliberated with the ATI Steering Committee and the ATI members in the upcoming term.

Activities in 2017/18:

ATI Governance

– Review of ATI governance rules and procedures and preparation of governance document

– Preparation of an ATI Communication Guide

– ATI Meeting, 13 February 2018, New York City

– ATI Meeting in the second half of 2018

Visibility and Outreach

– Provision of ATI communication materials

– Representation of the ATI at international events

– Relaunch of the ATI Website www.addistaxinitiative.net

Further development of the Addis Tax Initiative

– Discussions on the further development of the Addis Tax Initiative

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2) Monitoring the ATI Commitments

Monitoring the progress made regarding the three ATI commitments is crucial for attaining the ambitious goals set by the Initiative’s signatory countries. The 2015 ATI Monitoring Report has set the baseline against which the fulfilment of the three ATI commitments will be measured.

The monitoring is undertaken annually by the International Tax Compact and is based on Official Development Assistance (ODA) flow data as well as on the results from the ATI monitoring sur-veys, in which the ATI members report on the latest developments in the DRM portfolio of their country/organisation. The 2016 monitoring round starts at the beginning of 2018 and the results are published in three ATI Monitoring briefs, one for each ATI commitment. The next comprehen-sive ATI Monitoring Report will be published in 2019 as a mid-term review based on 2017 data.

The indicators measuring the progress of the fulfilment of ATI commitment 2 will be reviewed while taking the feedback on the 2015 ATI Monitoring survey into account (see 4.). To provi-de easier access to the collected information and to ensure transparency, all data underlying the ATI Monitoring Report as well as additional country information will be made available online on the DRM Database: www.drm.taxcompact.net (see box).

Activities 2017/18

– Preparation of the ATI Monitoring Survey and collection of inputs from all ATI members

– Preparation and publication of three ATI Monitoring briefs, on each of the three ATI commitments.

– Upload of all information from the 2016 ATI monitoring into the DRM Database

Box 4: DRM Database

The key objective of the DRM Database is to provide all stakeholders with a tool to identify oppor-tunities for collaboration and to enable peer-learning among all stakeholders. Furthermore, the database hopes to highlight gaps in the provision of development assistance and avoid duplication.

The DRM Database provides an overview on all technical assistance projects in the area of DRM carried out worldwide, building on the data that is being compiled and reviewed to mo-nitor ATI commitment. 1. Additionally, information on all ATI members’ approaches towards supporting DRM (or DRM reform strategies, respectively) as well as examples of successful DRM reform efforts will be included in individual country sections. All ATI members are invited to contribute and/or review their information to this comprehensive tool.

The International Tax Compact will further develop the DRM Database to include portfolio information from ATI supporting organisations as well as non-ATI members to complement the database. The DRM Database is updated on a regular basis and is openly available to the public.

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3.1) Commitment 1: Collectively Doubling Technical Cooperation in Domestic Revenue Mobilisation

The 2015 ATI Monitoring Report has shown that the support provided by the ATI develop-ment partners was concentrated on a limited number of recipient countries. While many partner countries receive only little or no support, other countries’ absorptive capacities are already strained by the volume of assistance provided. While the coordination of support pro-vided at the country level has to remain the responsibility of the partner countries, the Addis Tax Initiative is well positioned to provide a forum for enhancing coordination and a more balanced distribution of ODA support in the area of DRM.

Through the ATI monitoring and the provision of information on DRM projects and DRM reform in partner countries in the DRM Database, the Addis Tax Initiative contributes to more informed decision-making by all actors in the area of tax and development. Moreover, the DRM Database can serve as a tool to identify potential collaboration, e.g. in the form of joint/co-funded activities.

To further the dialogue and to identify opportunities for peer learning and more effective development cooperation, a consultative group of interested ATI members will be established to further elaborate possible ATI activities and promote a more coordinated provision of inter-national support to DRM. Possible topics that could be addressed are, for example, whether and how to include in-country PFM or DRM coordination groups into the discussions in the Addis Tax Initiative; or how to measure the impact and how to improve the effectiveness and alignment of support provided in the area of DRM. Further topics of interest may revolve around the support of IT Reforms, strategic planning processes (MTRS) and the develop-ment partners’ role in post-TADAT-phases. Work in that area should be coordinated with the Platform for Collaboration on Tax (PCT).

Furthermore, the upcoming term will be used to explore and establish ways for ATI develop-ment partners to coordinate their cooperation on specific smaller-scale projects (e.g. field research) as well as to better inform each other on their planning processes with regards to DRM projects in partner countries.

Activities 2017/18

– Establishment of a consultative group on ATI commitment 1

– Implementation of activities as agreed upon by the consultative group

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3.2) Commitment 2: Stepping up Domestic Revenue Mobilisation in Partner Countries

During the ITC/ATI Conference, there were determined observations from ATI partner countries that the indicators used to measure the progress of ATI commitment 2 needed to be revised in order to provide a more accurate and more detailed picture of DRM reform in partner countries. The International Tax Compact will follow up with the ATI partner countries to inquire whether their own indicators and goals from their national DRM or PFM strategies and strategic plans provide an effective foundation to monitor their reform progress.

ATI members are invited to join a consultative group on ATI commitment 2, which will advise the ATI Steering Committee on the selection of suitable indicators that are to be used for the further monitoring of partner countries’ progress in fulfilling their ATI commitments. The group is also expected to contribute to the discussion on how the Addis Tax Initiative could further support the ATI partner countries.

Partner countries will be invited to share case studies and good practices on their successful reform efforts to be included in their country profiles in the DRM Database (see box 4), thus enabling others to benefit from their experiences.

As in the last term, ATI partner countries are encouraged to initiate Tax Administration Diagno-stic Assessment Tool (TADAT) assessments or re-assessments in order to identify bottlenecks within their national tax administrations. ATI development partners are available to help interes-ted ATI partner countries to find support to undertake a TADAT assessment, which will enable them to make informed decisions during the strategic planning of their reform steps. Moreover, the Addis Tax Initiative continues to encourage partner countries to publish their TADAT per-formance assessment reports (PAR) to improve the understanding of the challenges they face and to allow for a more effective coordination of support to DRM reforms. To date, only two ATI partner countries – Liberia and Georgia – have published their TADAT PARs.

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In addition to encouraging partner countries to undertake and publish their TADAT assess-ments, the Addis Tax Initiative will look to partner countries to demonstrate and report on concrete measures and plans to address weaknesses identified through the TADAT exercise. This can include, for instance, efforts by national tax administrations to develop or revamp their strategic plans and other initiatives geared towards organisational performance im-provement. The Addis Tax Initiative will simultaneously look to ATI development partners to provide coordinated and harmonised support to these efforts when requested.

Activities 2017/18

– Establishment of a consultative group on ATI commitment 2

– Review of indicators to measure ATI commitment 2

– Collection of case studies on successful DRM reform – reform process and achievements

– Implementation of activities as agreed upon by the consultative group

– Call on ATI partner countries to publish TADAT performance assessment reports.

– Call on ATI partner countries to report on TADAT follow-up actions and development partner support thereto.

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3.3) Commitment 3: Policy Coherence for Development

The findings of the ATI Monitoring Report and the deliberations during the ITC/ATI Confe-rence 2017 indicate that both the ATI development partners and the ATI partner countries take their joint responsibility of ensuring policy coherence seriously. Many ATI members already have coordinating mechanisms in place that are dedicated to strengthening domes-tic inter-agency cooperation in the area of taxation and DRM. However, it has become clear that the ATI members hold different priorities in this area and that they address a variety of DRM-related topics under the label of policy coherence.

In order to work together on policy coherence for development in the area of DRM, interes-ted ATI members are invited to join a consultative group on policy coherence for develop-ment. The purpose of this group is to share experiences on ensuring policy coherence in the area of DRM and to discuss possible joint activities with regards to this matter.

Furthermore, the Addis Tax Initiative will explore options to facilitate cooperation with partner countries in order to provide tax officials with the information needed to enable them to apply the recommendations/guidance of the Committee of Experts on International Cooperation in Tax Matters on international cooperation in tax matters.

Finally, as mandated in the ATI Declaration, the ATI Steering Committee and the International Tax Compact will continue to engage in a dialogue with the UN Global Compact to ensure the inclusion of a tax dimension into their organisational principles.

Activities 2017/18

– Formation of a consultative group on ATI commitment 3

– Implementation of activities on policy coherence for development as agreed upon by the consultative group

– Continued dialogue with the UN Global Compact

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Summary Activities 2017/2018

1) ATI Management

ATI Governance – Review of ATI governance rules and procedures and preparation of governance document – Preparation of an ATI Communication Guide – ATI Meeting, 13 February 2018, New York City – ATI meeting in the second half of 2018

Visibility and Outreach – Provision of ATI communication materials – Representation of the Addis Tax Initiative at international events – Relaunch of the ATI Website www.addistaxinitiative.net

Further development of the Addis Tax Initiative – Discussions on the further development of the Addis Tax Initiative

2) Monitoring the ATI Commitments

– Preparation of the ATI Monitoring Survey and collection of inputs from all ATI members – Preparation and publication of three ATI monitoring briefs, on each of the three ATI

commitments. – Upload of all information from the 2016 ATI monitoring in the DRM Database

3�1) Commitment 1: Collectively Doubling Technical Cooperation in Domestic Revenue Mobilisation

– Establishment of a consultative group on ATI commitment 1 – Implementation of activities as agreed upon by the consultative group

3�2) Commitment 2: Stepping up Domestic Revenue Mobilisation in Partner Countries

– Establishment of a consultative group on ATI commitment 2 – Review of indicators to measure ATI commitment 2 – Collection of case studies on successful DRM reform – reform process and achievements – Implementation of activities as agreed upon by the consultative group – Invitation to ATI partner countries to publish TADAT performance assessment reports – Call on ATI partner countries to report on TADAT follow-up actions and development

partner support thereto.

3�3) Commitment 3: Policy Coherence for Development

– Formation of a consultative group on ATI commitment 3 – Implementation of activities on policy coherence for development as agreed upon by the

consultative group – Continued dialogue with the UN Global Compact

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www.addistaxinitiative.net