The OECD recently published two self-assessment maturity models on tax debt management and the reduction of compliance burdens, both critical areas for successful tax administration. Maturity models set out descriptions of capabilities and performance in a particular function or set of activities across a number of levels of increasing maturity, in the case of these models from an emerging to an aspirational level. These models, the first in a new OECD Tax Administration Maturity Models series, are intended to help tax administrations globally to assess their current performance and to consider future possible reforms, paving the way to more seamless and frictionless tax administration.
Currently across the 53 members of the Forum on Tax Administration outstanding collectible debt is in the region of EUR 820 billion with significant variation between jurisdictions, including in the availability and use of powers and the use of new technology tools.
In commenting on the new Tax Debt Management Maturity Model, Tom Boelaert, the Administrator General of the Belgian Debt Management Agency which led the work on this model, said “Tax debt management plays a crucial role in ensuring the effective and fair operation of the tax system. We should therefore always challenge ourselves to do better. Within my own Agency, this new maturity model has facilitated frank and in-depth conversations about our future direction. From comments we received from other adminstrations as we developed this maturity model, I am sure that it will be a useful new tool for all tax administrations.”
The Tax Compliance Burden Maturity Model recognises that excessive burdens, whether involving time or direct costs, can decrease the willingness or, in some cases, the ability of taxpayers to comply with their obligations. While compliance burdens are not yet well measured across administrations, it is clear that high compliance burdens can result in significant time and money costs for many taxpayers, diverting them away from productive activities and, in aggregate, reducing economic growth.
In commenting on the new compliance burden maturity model, Jim Harra, First Permanent Secretary and Chief Executive of HM Revenue and Customs which led the work, said “Understanding and addressing burdens is not straightforward and depends on a number of elements, including a solid strategy, a culture of minimising burdens and the confidence and expertise to engage with policy makers. This maturity model can help tax administrations at all stages of development in identifying areas of strength and where improvements might be desirable.”
These new maturity models have been developed by tax administrations for tax administrations and have both been subject to extensive piloting by over twenty jurisdictions, including a number of developing countries. As more jurisdictions use the model, the comparative results set out in the two reports will be updated and the model refined. It is expected that further models on other aspects of tax administration will be published over the coming year. These models will complement existing tools such as the International Monetary Fund’s Tax Administration Diagonistic Assessment Tool (TADAT).
Download the reports
Tax Debt Management Maturity Model
Tax Compliance Burden Maturity Model
(Source: OECD Tax)
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