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

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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 compliance

Task 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

• Little ‘hard’ evidence of success or impact evaluations, how to measure

behavioural change?

• What is the role for development co-operation?

• How to make revenue-expenditure linkages ‘concrete’?

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

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• South Africa – Mobile Tax Units

• Mozambique – Annual campaign and simplified tax for small taxpayers

• Rwanda _ Taxpayer day, tax advisory councils

• Morocco – taxpayer education at school through theatre, media campaigns

• Korea – tax classes for small businesses

2. Global Source Book on Taxpayer Education Some examples

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