Canada

Doubling support to DRM in partner countries

In 2017, Canada’s overall international assistance in support of domestic revenue mobilisation and tax capacity building to developing countries reached USD 11.5 million, a notable increase over the previous year‘s disbursements of USD 7.4 million. Most of this support was delivered through Global Affairs Canada’s (GAC) programming portfolio of twelve operational projects with DRM components, primarily in Sub-Saharan Africa (Mali, Benin, Tanzania) and the Americas (Haiti, Caribbean, Interamerican). In Mali, Canada supported capacity building of tax administration officials, improvements in strategic design, internal communications, and the purchase of equipment. In Tanzania, Canada sustained the government to monitor and audit mining operations ensuring that the collection of information on revenues is accurate and complete. In the Caribbean, Canada funded an IMF regional initiative aiming to increase revenue collection and improve the management of public funds.

As a member of international and regional organisations – such as the OECD, the Inter-American Center of Tax Administrations (CIAT), the Cercle de Réflexion et d’Échange des Dirigeants des Administrations Fiscales (CREDAF), and the Commonwealth Association of Tax Administrators (CATA) – Canada worked with a broad range of countries to improve tax administration practices, support the inclusion of partner countries in the global tax dialogue, and develop tools to strengthen capacity building in key areas.

Through the Canada Revenue Agency (CRA), Canada also provided bilateral assistance by hosting study visits and providing guidance through the sharing of best practices of CRA with other tax administrations. The requests included Africa, Asia and the Caribbean. The CRA has also developed a prototype of a global online platform. The Knowledge Sharing Platform for Tax Administrations (KSP-TA) is designed to foster the practical sharing of tax knowledge and expertise in a cost-effective and sustainable way.

Canada’s Feminist International Assistance Policy, launched in June 2017, sets the broad policy framework for Canada’s international assistance. The policy highlights inclusive governance as one of six key action areas. The policy offers opportunities to incorporate a gender perspective in the design and implementation of new tax policies and administration programmes with their partners. By 2021, 15% of Canada’s bilateral official development assistance (ODA) must specifically target gender equality and the empowerment of women and girls. In addition, 80% of all Canadian ODA has to improve the integration of gender equality and empowerment of women and girls.

Policy coherence for development

Finance Canada (FIN), CRA and GAC have been working towards a whole-of-government approach to tax and development to establish a common set of objectives and approaches for Canada’s international engagement on domestic revenue mobilisation, including policy coherence. This process has already introduced coherence as well as an alignment of positions and messages across a wide spectrum of Canadian engagement at the international level.

The key priorities for tax capacity building within GAC and CRA (as FIN does not undertake programming) are determined by departmental priorities and existing budgets. After projects are designed and implementing partners are selected, project implementation can offer opportunities for a whole-of-government collaboration. An example would be a project that was recently completed in Haiti and one that is currently underay in Benin.

Outlook

As several government entities are involved in the provision of tax capacity building support to developing countries, Canada’s membership in the Addis Tax Initiative has raised awareness of the respective tax capacity building activities and has provided a government-wide overview of collective efforts in this area. Canada’s commitment to collectively double support to tax capacity building by 2020 is being closely monitored along with all other high-level development commitments made. Canada is on track to meet ATI Commitment 1 by 2020.