ATI & OECD: DIGITALISING TAX ADMINISTRATIONS

Digitalisation and digital transformation constitute two important processes to increase the efficiency and efficacy of revenue administrations. In this respect, advances in information technology open new opportunities for governments in partner countries to effectively collect and mobilise the resources for financing public services. This is particularly relevant in the post-COVID 19 economic outlook, where digital tools have been increasingly supporting revenue administrators to assure revenue collection and reduce burdens on taxpayers.  

The series

Against this backdrop, the Secretariats of the Addis Tax Initiative (ATI) and the OECD’s Forum on Tax Administration (OECD FTA) co-organised a series of three workshops on ‘Using the FTA Digital Transformation Maturity Model (DTMM) in a strategic context’. The aim of the DTMM is to provide tax administrators with a self-assessment tool able to determine the actual level of digital maturity, and to guide them to shape their future digital strategy, accordingly, considering their unique circumstances and priorities. The DTMM can be used by tax administrations at different maturity stages: from those in an emerging level of digitalisation, through those who have partially implemented digital reforms, to those whose tax processes are in the progress of being fully digitalised and integrated within the society.  

The first workshop, which took place on 26 October 2022, aimed at building motivation for undertaking the DTMM-based self-assessment, and understanding how the model works. Sequentially, the second workshop, which occurred on 27 March 2023, brought together tax administration officials from the ATI partner countries Benin, Ecuador, Madagascar, and Sierra Leone to share experiences, challenges, and insights from their self-assessment processes, as well as representatives from donor countries and supporting organisations ─ German Development Cooperation (GIZ), the Swedish Tax Agency, and the World Bank Group (WBG) ─ working closely on the topic with these countries. 

The third and last workshop of the series took place on 25 May 2023, gathering tax administrators from these ATI  partner countries in addition to Kenya, the representatives from donor countries and supporting organisations, as well as the Secretariat of Tax Inspectors Without Borders (TIWB) initiative. Ms Tochukwu ONYEMATA from the West African Tax Administration Forum (WATAF) moderated the session.  

The workshop

Ms Michelle ORDÓÑEZ from the ATI Secretariat opened the session with a general context of the three-workshop series and the main objective of this last workshop: how to use the results of the DTMM in the context of shaping a digitalisation and digital transformation strategy. She explained that these meetings contributed to the fulfilment of ATI Commitment 1, which seeks to ‘improve the efficiency of revenue administration […] in partner countries through further modernisation (e.g. digitalisation) and broader institutional change.’ 

In a next step, Ms ONYEMATA facilitated the discussions during a tour de table, where ATI partner country representatives were invited to answer questions related to their digitalisation journey, the use of the DTMM self-assessment results, and in which stage of the digitalisation process more support is needed.  

Mr Esteban CARRANCO from SRI Ecuador highlighted that data and information management are the prominent aspects where more support is needed, in order to advance with the digitalisation in the Ecuadorian tax administration. This concern was shared by the other representatives that contributed to the discussion in the tour de table. Mr John OSINO, on behalf of the Kenya Revenue Authority (KRA), pointed out that the country’s digitalisation journey is at the point of optimising the digital strategy for taxpayers, while the main challenges concern data management and protection, where more assistance is needed. The discussion continued with the contribution from Mr Mino ARIJAONA from Madagascar, who outlined the heterogeneous system for managing taxes and interacting with taxpayers within the country, and underlined the need for support in the revision of the performed DTMM.  

The workshop continued with the presentation by Mr Vegard HOLMEDAHL from OECD FTA, who explained in detail the common process for developing a digital strategy and the characteristics of successful strategies. Mr HOLMEDAHL stressed that there is no model that fits all, and that the DTMM is intended to guide and not to determine the outcome of the digitalisation process. Therefore, it is frequently necessary to re-examine earlier stages, in order to increase the quality and components of the strategy. A good strategy should shape the future and be synchronised with the vision of the administration and the government, Mr HOLMEDAHL argued. Hence, it is paramount to create a financial plan, linked to the digitalisation process, which includes the initial investments and the budget for the maintenance’s costs. A properly built financial plan, jointly with a medium-term timeframe as a baseline, contributes to enhance the sustainability and effectiveness of the strategy.  

As Mr OSINO continued with a presentation on the current and future digital strategy of Kenya. He explained the background and vision behind the digital process and remarked that digitalisation is the main ally for achieving increase in revenue mobilisation, tax base expansion, compliance, and simplification of tax processes.  

The second phase of the workshop focussed on the opportunities available to partner countries for further assistance. Ms Rusudan KEMULARIA, Head of TIWB Secretariat, described the TIWB model as a concrete example of successful cooperation between UNDP and the OECD, since it constitutes a niche form of assistance that complements traditional capacity building and on-site technical support, and it is tailored to tax administration’s needs. In addition, she explained that the initiative supports the mobilisations of domestic resources in developing countries, according to a ‘learning by doing’ approach, sharing experience and knowledge without substituting the local expertise. 

Mr Peter WIEŻEL, from the ATI Secretariat, further underlined the potential of the ATI Matching Platform as a mean for matching support needs in the area of digitalisation with available technical and financial resources from donor countries and supporting organisations. More practically, Mr. WIEŻEL invited Sierra Leone and the Swedish Tax Agency (STA) to share how they started a collaboration in the area of digitalisation through this platform. In the closing remarks, Ms ORDÓÑEZ recalled the importance of assistance, both technical and financial, throughout the journey of digitalisation of revenue administrations.  

Next steps

This workshop concluded the series of workshops, jointly organised by the ATI and FTA Secretariats, on how to use the OECD FTA’s Digital Transformation Maturity Model (DTMM) to improve the efficiency of revenue administrations, through digitalisation and digital transformation. The ATI & FTA Secretariats agreed to follow up with ATI partner countries ─ potentially Benin, Madagascar, and Ecuador ─ interested in the technical / bilateral support provided by TIWB on digitalisation of tax administrations. 

Do not miss out! You can find here the presentations delivered during the workshop.