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UK : Tax authorities are boosting their workforce

Thursday, 19 June 2014   (0 Comments)
Posted by: Author: Catherine McLean
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Author: Catherine McLean

As governments around the world seek a higher degree of compliance with tax laws, they are strengthening the ranks of their tax forces and improving the resources available to their tax authorities. The aim is to enable the staff of tax authorities to better understand increasingly complex tax structures, as well as handle disputes with corporate tax­payers and enforce tax laws.

The UK’s steps to build tax workforce

In the UK, for example, HM Revenue & Customs (HMRC), which describes itself as one of the country’s largest businesses, is focusing on boosting the skills of its workforce.

As part of that effort, HMRC launched, in 2012, the Tax Academy for its workers. One of its initiatives is a part-time course that lasts four years and leads to a degree in professional studies in taxation from Manchester Metropolitan University. 

Demand for the program is high. Currently, some 551 HMRC workers are enrolled in the program, with more than 15,700 applying for the 200 places in 2013, according to an HMRC spokesperson. The aim is to ensure HMRC staff has "the confidence to take on the best of the private sector tax experts in tax disputes,” HMRC said at the time of launch. 

How governments worldwide are enhancing their tax force

Other governments are recruiting additional tax staff in the hopes of enhancing compliance activities. Take Indonesia as an example. "The tax authorities here are in the process of hiring more than 5,000 additional professionals,” explains Ben Koesmoeljana, a senior tax partner in EY’s Indonesian member firm. "These professionals are likely to focus on compliance. Therefore, it’s a good time to review tax policies and processes to ensure compliance and disclosure obligations have been met.”

In Vietnam, additional training received by tax administrators in the area of transfer pricing is already visible, according to Nitin Jain of EY in Vietnam. "They are stepping up their enforcement activities and requesting that foreign-owned firms explain their arm’s length pricing for 2012 and previous years,” Jain said.

Along with these efforts by individual governments, international cooperation is also making tax inspectors more effective at their job, Jeffrey Owens, Senior Policy Advisor to EY’s Global Vice-Chair of Tax, wrote in an article in 2012 for The Bulletin for International Taxation. Countries are increasingly teaming up on audits and submitting requests for information to other tax jurisdictions.

How the OECD is also taking action

Indeed, the OECD is launching a new program at the start of 2014 called Tax Inspectors Without Borders (TIWB), which will team up experienced tax experts with tax authority staff in fast-growth markets on specific audits, with the aim of improving compliance and, ultimately, collecting more tax revenue.

"The TIWB objective is to enable the transfer of tax audit knowledge and skills to tax administrations in developing countries through a real time, ‘learning-by-doing’ approach,” the OECD wrote in a report in June.

Key messages

Whether it is through education, on-the-job training or cooperation with foreign tax administrations, today’s tax authorities professionals are better equipped to deal with issues arising from complex tax structures and to enforce tax laws. Tax authorities in fast-growth markets are increasingly looking to tax to fund development. In response, the OECD has launched a program called Tax Inspectors Without Borders to help support and provide assistance to tax authorities staff in these markets on specific audits.

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