HM Revenue and Customs
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HMRC leads the way on global tax administration
An HMRC-led report on how revenue bodies across the world can achieve a more effective relationship with major taxpayers and their advisors was published by the OECD today.
A number of tax commissioners from African countries attended their first OECD Forum on Tax Administration, where the recommendations of the HMRC report were endorsed by more than 30 countries.
The meeting will help African countries develop their capacity to raise revenues, supporting the development of capable governments and making them more accountable to their citizens.
The meeting will also lead to improved tax systems delivering the funding to develop vital infrastructures and the establishment of an International Tax Centre in Africa. These ideas will be developed at a conference to be hosted by the South Africa Revenue Service in May.
The report concludes that tax authorities can achieve a more effective and efficient relationship with taxpayers and intermediaries if their actions are based on:
* commercial understanding;
* impartiality;
* proportionality;
* openness; and
* responsiveness.
The report also recommends that national tax authorities should use risk management to direct the allocation of resources when tackling aggressive tax planning.
Tax advisers who involve their clients in aggressive avoidance schemes need to understand that there are consequences in terms of how their clients are perceived and dealt with by tax authorities.
Jane Kennedy, Financial Secretary to the Treasury said:
"HMRC's people, their experience and skills, are held in high regard internationally. That is why the OECD asked HMRC to undertake this important research.
"The OECD is concerned to build capacity in African countries' tax systems. A well-regulated and effective tax system underwrites every country's political and economic development and I welcome the announcement of a conference focused on Africa later in the year.
"The report presents a vision of how tax authorities, large corporate bodies and intermediaries should work together in a relationship based on transparency and trust.
"Constructing a co-operative environment is in the interests of taxpayers and tax authorities alike."
HMRC Acting Chairman, Dave Hartnett said:
"Intermediaries have a vital role to play in providing constructive advice and guidance to their large corporate clients. But some intermediaries are unfortunately still tempted to push aggressive tax avoidance schemes - in so doing they damage both the reputations of their clients and their relationships with tax authorities.
"A more co-operative, trust-based tax environment will result in greater certainty, more timely resolutions and reduced compliance costs for taxpayers and their representatives.
"This is groundbreaking work by OECD, led by HMRC which can be drawn-upon by revenue bodies throughout the world as a template in constructing a better working relationship with intermediaries and corporate clients."
Notes for editors
1. The report was produced by HMRC on behalf of the OECD's Forum on Tax Administration.
The OECD is committed to a conference developing capacity building in African tax authorities 'Taxation, Governance and Capacity Building in Africa' to be held in South Africa in late May 2008.
2. In the context of the report the term 'intermediary' can be taken to mean law and accounting firms, other tax advisers and financial institutions.
3. The report has been formally discussed by more than 30 heads of tax administrations at the Forum on Tax Administration meeting in Cape Town on 10 and 11 January. Countries attending have endorsed the Cape Town Communique, which sets out the report's key conclusions and recommendations, as well as broader FTA issues.
4. The report was led by a study team which was a partnership between HM Revenue and Customs and the OECD Secretariat. It is available at: http://www.oecd.org
5. The study team gave all countries attending the Forum on Tax Administration the opportunity to contribute to and influence the direction of the report, and were assisted by a core group of 12 countries: Australia, Canada, Chile France, India, Ireland, Japan, Mexico, the Netherlands, South Africa, Spain and the USA.
6. There was also extensive consultation with the private sector.
Issued by HM Revenue & Customs Press Office
Website http://www.hmrc.gov.uk
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