For many partner governments, the effects of the COVID-19 pandemic mean an acceleration of a shift that was already underway: the move towards increased digitalization of tax administrations for enhanced taxpayer services, tax compliance and collection of revenue.
While social distancing is accelerating the growth of digital delivery models, both in online sale of goods and retail and service delivery such as banking, education and entertainment, these changes are likely to continue well beyond the COVID-19 crisis. The Global Tax Program is using this time to implement creative and dynamic digitized interventions that stand to benefit governments and taxpayers both in the short- and long-term.
The Global Tax Program supports the implementation of these activities through four distinctive lines of work organized in "Windows":
- Window 1: Global Tax Activities and Global Public Goods
- Window 2: Country-Level Activities
- Window 3: Actionable Research and Data, Knowledge and Learning
- Window 4: Program Implementation and Supervision
In Window 1’s Global Tax Activities, online features of the tools have proven both convenient and efficient during this time of travel restrictions, with continued assessments, rapid response work and e-learning through digital platforms for the Tax Diamond Assessment and the Tax Policy Asessment Framework (TPAF). The development of digital VAT guidelines continues, becoming increasingly relevant and salient for partner countries. For example, in Indonesia, the tax policy and administrations are responding to an existing country demand for accelerated growth of the digital service providers and e-commerce market shares. Notably, Indonesia issued a policy mandate for major reforms to the direct and indirect taxation of the digital economy as part of its COVID-19 response in a Presidential Emergency Decree.
In Window 2’s Country-Level Activities, digital platforms have enabled continued partner work and support, remotely. Tax Administration Diagnostic Assessment Tool (TADAT) assessments and implementation field guides are being conducted and shared digitally, with field guides now including a full-fledged subcomponent that assesses operational risks embedded in tax administrations. This subcomponent mirrors work being conducted in partner countries like Senegal, where the Rapid Response Facility (RRF) project design element enabled the team to adroitly respond to COVID-19-specific activities that the government initiated.
In the Kyrgyz Republic, there has been a major expansion of e-services for taxpayers. In the immediate “containment” phase of the COVID-19 crisis, the GTP has supported business process redesign for select taxpayer services that can quickly be converted into e-services. Similarly, the GTP is working with Nigeria’s Federal Inland Revenue Service and the Nigeria Customs Service in adopting business continuity plans that continue to provide services to citizens, taxpayers, and importers through an online platform, which includes e-filing and e-payment of taxes and duties for citizens.
Window 3’s Actionable Research and Knowledge Products work has continued with little interruption. However, there has been a marked shift in focus, as the Revenue Academy begins to develop models to estimate the impact of the different taxes on several variables (including GDP and tax revenues) based on elasticities obtained from data and analysis of previous crisis. This analysis is not only on the impact of COVID-19, but also, includes simulations of different policy options that take into account country-specific characteristics (including expected time to recovery).