BUILDING TAX CULTURE, COMPLIANCE AND CITIZENSHIP

A GLOBAL SOURCE BOOK ON

TAXPAYER EDUCATION

Structure

1. Background and context: – The OECD and the Task Force on Tax and Development?– Why does the OECD work on taxpayer education?

2. The global source book on taxpayer education:– Content– Lessons learnt– Mozambique: « Building Mozambique Together »

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= promote public policies that will improve the economic and social well-being of people around the world.

= forum in which governments can work together to share experiences and seek solutions to common problems, e.g. peer review mechanisms.

set international standards on a wide range of issues, from agriculture and tax to the safety of chemicals.

1. Background and context: The Organisation for Economic Co-operation and Development (OECD)

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• Creation: 2010

• Flexible membership from OECD countries; developing countries; international and regional organisations; civil society; business

• Objective is to create an enhanced enabling environment to assist developing countries collect taxes effectively and fairly.

• Bi-annual workplan proposed by the Task Force and agreed by OECD committees, including work on state-building, taxation and capacity building

1. Background and context: The OECD Task Force on Tax and Development

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= Many Countries will not Raise the Tax Needed to Meet the Millennium Development Goals

Some countries (including half of sub Saharan Africa countries) raise less than 17% of GDP in tax revenues, the minimum level considered by the UN as

necessary to achieve the MDGs.

1. Background and context: Why Tax and Development?

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• Examines the attitudes and perceptions of citizens in developed and developing countries to taxation and tax evasion Based on World Values Survey, Afrobarometer, Asiabarometer and Latinobarometro data

• Attitudes towards taxation are shaped by factors beyond enforcement and the probability of being caught for tax evasion. Socio-economic factors (education, gender, income, employment, age, and religious

beliefs) influence tax morale. Institutional factors, such as trust in government and satisfaction with public services

and the functioning of democracy

• Link between Tax Morale and tax complianceTask Force requested to compile and disseminate effective practices in

taxpayer education leading to the preparation of a source book

1. Background and context: 2012 OECD report « What drives tax morale? »

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• 28 different innovative country approaches to taxpayer education :

• 5 – page chapters including objectives of programme, focus on specific initiative, impact, lessons learnt.

2. Global Source Book on Taxpayer Education Content

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Bangladesh Jamaïca NigeriaBhutan Kenya PeruBrasil Korea RwandaBurundi Lebanon SenegalChile Malaysia SingapurColombia Mauritius South AfricaCosta Rica Mexico TurkeyEl Salvador Morocco UruguayEstonia Mozambique ZambiaGuatemala

• Taxpayer education to: – Strengthen the state-citizen relationship– Address the informal sector– Promote voluntary compliance and social cohesion

• Leading to a transformation of the tax authorities and linking tax compliance to citizenship and values of cohesive democratic societies

• 2013 OECD study on « Aid Modalities for Strengthening Tax Systems » confirms taxpayer education as an effective mechanism to rebuild trust and stimulate citizen participaiotn in the public debate.

2. Global Source Book on Taxpayer Education Content

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• Raising awareness and making life easier:– Raise public’s awareness of new tax laws and methods of filing, to

answer the public’s inquiries and to make life easier for taxpayers. e.g. Lebanon, Zambia, South Africa, Korea

• Tackling the informal sector:– Broadening the tax base to reduce informality and non-payment of

tax. e.g. persuade small traders to register for value added tax (Burundi) or get into the habit of asking for official receipts

• Reaching the next generation;– Insertion of taxpayer educaiton in school and university curricula. e.g.

Costa Rica, El Salvador, Morocco, Mexico, Brasil

2. Global Source Book on Taxpayer Education a range of themes

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• Tax in cyberspace– Resource optimisation through ICT use. e.g. El Salvador, Chile,

Uruguay • Tax at the games room and on TV

– tax can be explained through interactive play spaces, theatre, video games, and soap operas on television . E.g. Malaysia, Nigeria

• Celebrating tax: tax days and festivals – Bangladesh celebrates National Income Tax Day – Guatemala’s annual citizen culture festival “Strength Lies in Numbers”– Rwanda’s Taxpayer’s Day

2. Global Source Book on Taxpayer Education a range of approaches

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• Solid partnerships - domestically, regionally and even internationally:– long-term, sustainable cultural change requires building solid alliances

with the education sector , on condition of identification of common goals.

– In Latin America alone, nine countries have included tax education in their school syllabi

– Other useful partners can be business and civil society (Jamaica, Rwanda, Brasil)

• Tax Champions - High-level political commitment and participation• Promote cross-country learning – ATAF , CIAT, IOTA

2. Global Source Book on Taxpayer Education Keys to success?

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• Limited time, financial and human resources

• ICT’s might bring new sorts of problems

• Nobody else will provide taxpayer education

• Limited ‘hard’ evidence of success or impact evaluations. How to measure

behavioural change?

• What is the role for development co-operation?

2. Global Source Book on Taxpayer Education Obstacles and Challenges for the future?

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= Annual national taxpayer education campaign on fiscal and customs issues. Focus on informal sector, promoting a culture of voluntary compliance

Impact= from 330 000 registered taxpayers in 2006 up to 2 million in 2012. MOU with wide variety of actors, incl. national press, civil servants, civil society, etc. Use of local tax offices for training ‘disseminators’ (Over 36 000 accross Mozambique) nformal taxpayers to register for an individual tax number in order to benefit from the

« simplified tax for small taxpayers »

2. Global Source Book on Taxpayer Education Mozambique – Building Together Mozambique

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