It was my pleasure over the last two days to chair the third meeting of the OECD’s Forum on Tax Administration. The Forum was established in 2002 to promote cooperation between revenue bodies and to develop good tax administration practices. It is a unique Forum in that it brings together the leaders of tax administrations and other revenue bodies to share concerns, experiences and ideas for improving tax administration. In the past, the Forum has examined issues such as risk management, taxpayer services and the use of modern technology.
This meeting of the Forum was used to focus on two of the key challenges facing revenue bodies in the 21st century: international non-compliance and organizational reforms for more effective tax administration.
Enforcement of our respective tax laws has become more difficult as trade and capital liberalization and advances in communications technologies have opened the global marketplace to a wider spectrum of taxpayers. While this more open economic environment is good for business and global growth, it can lead to structures which challenge tax rules, and schemes and arrangements by both domestic and foreign taxpayers to facilitate non-compliance with our national tax laws. The leaders of tax administrations from over 30 countries share the view that international non-compliance is a significant and growing problem. We agreed to improve practical co-operation between revenue bodies and other law enforcement agencies of governments to counter non-compliance.
Our discussions also revealed continued concerns about corporate governance and the role of tax advisors and financial and other institutions in relation to non-compliance and the promotion of unacceptable tax minimization arrangements. We also noted the increased flows of capital into private equity funds and the potential issues this may raise for revenue bodies.
We identified four areas in which we will intensify existing work or initiate new work under the auspices of the OECD:
- Further developing the directory of aggressive tax planning schemes so as to identify trends and measures to counter such schemes.
- Examining the role tax intermediaries (e.g., law and accounting firms, other tax advisors and financial institutions) in relation to non-compliance and the promotion of unacceptable tax minimization arrangements with a view to completing a study by the end of 2007.
- Expanding the OECD 2004 Corporate Governance Guidelines to give greater attention to the linkage between tax and good governance.
- Improving the training of tax officials on international tax issues, including the secondment of officials from one administration to another.
Progress made with these initiatives will be reviewed at our next meeting late 2007 or early 2008 in South Africa.
Finally, I would like to express my appreciation to the Korean government and especially Commissioner Jeon and his NTS colleagues for hosting this third meeting of the Forum on Tax Administration. They did an exceptional job.