Appendix: Government Response
The Government welcomes the opportunity to respond
to the report of the International Development Committee on Tax
in Developing Countries: Increasing Resources for Development.
The Government agrees with the Committee on the importance of
tax to development. Effective tax systems can help developing
countries to fund service delivery and escape from aid dependency
and they can help shape economic growth. Fair and transparent
tax systems promote social cohesion and shape government legitimacy
by promoting accountability of governments to tax-paying citizens
and by stimulating effective state administration.
The report identifies the importance to tax systems
of global-level as well as domestic issues and highlights the
significance of extractives industries as a source of revenue
for some developing countries. The report acknowledges the value
of technical assistance provided by DFID and HMRC to national
revenue authorities in developing countries and recommends that
such work be scaled-up.
The Government's support for improving tax systems
at the country level is largely provided through DFID's country
programmes. Support reflects the country context, including demand
for support, credibility of partner country plans, assistance
provided by others and competing demands on DFID's resources.
The context also includes the broader public financial management
system of which the tax system forms a part. The benefits of increasing
revenue through more effective tax systems will depend on how
the extra revenue is spent. This will depend on the effectiveness
of the country's budget system, through which resources are allocated
and spent and subsequently accounted for and reported on. This
should be considered when assessing the case for support to improve
tax collection. In addition to its assistance for improving tax
systems, DFID provides technical assistance to partner countries
to improve broader public financial management.
The global-level issues referred to in the report
have been getting more attention by international bodies in recent
years. The G20, in particular has been active in this area. The
Government is closely involved in these processes and seeks to
keep the interests of developing countries in focus. The Government
considers that improved arrangements for exchange of information
between tax authorities, coupled with appropriate domestic powers
to request information, is the best way to enable tax authorities
to obtain the information they need to collect the tax due to
them from entities operating in more than one tax jurisdiction.
Response to the recommendations
The Government's responses to the individual conclusions
and recommendations set out in the International Development Committee's
report are set out below.
COUNTRY-LEVEL TAX POLICY
1. If developing countries are to improve their
collection of tax revenues, it is imperative that elites within
those countries pay the correct amounts in personal income taxation,
and—critically—are seen to do so. (Paragraph 8)
Agree. The taxation of
elites is important in relation to governance as well as revenue.
Personal income taxation commonly accounts for less than 10 percent
of all tax revenue in low-income countries - compared to an average
of more than 25 percent in OECD countries. Historically, entrenched
power structures have been an obstacle to taxing elites although
administrative weaknesses and errors in tax design have also contributed.
DFID support for improvements in governance more
generally and, in particular in improving accountability, should
help to facilitate more internal pressure to address such issues.
Taxpayer education and increasing public awareness may also have
a role to play. Improving the way in which tax receipts are used,
by strengthening public financial management, may help to increase
willingness to pay. Where there is a willingness to tax elites,
and the problem is in carrying this out, the Government's work
at the international level on improving exchange of information
is very important with regards to taxation of individuals, as
well as companies, where foreign assets and transactions are involved.
2. DFID should seek to support the national revenue
authorities of developing countries as they attempt to improve
the collection of personal income taxes, VAT and local property
taxes. DFID should also encourage and support programmes that
engage civil society and trade organisations, academics, journalists
and parliamentarians in the tax policymaking process. (Paragraph
13)
Agree. As indicated in
its evidence paper submitted to the Committee, DFID already supports
the revenue authorities in a number of developing countries, whose
remit includes personal income tax and VAT, to help them improve
collection of taxes. DFID intends to continue to provide such
support. DFID has had much less involvement in support for collection
of local taxation, including property tax, and accepts that there
is a case for the international community to do more work in this
area.
DFID country offices are encouraging partner governments
to establish systems and processes to engage with the public,
civil society organisations and parliamentarians on a range of
issues. As regards engaging such organisations in the tax policymaking
process, one of the objectives of the International Centre for
Tax and Development (ICTD), which DFID is funding, is to help
stimulate dialogue within developing countries around tax issues.
The ICTD works with a range of academics and civil society groups.
DFID also supports the International Budget Partnership
(IBP), which promotes transparency and participation in the budget
process in many countries, including through its bi-annual Open
Budget Survey which ranks governments on the transparency of their
budget data. Civil society organisations can use the rankings
to encourage governments to make more information about budgetary
planning available to the public. This is an important tool for
citizens to be able to hold governments to account for their spending
of tax revenues. Although the focus of the IBP has been primarily
on the expenditure side of the budget, some IBP partners have
worked on tax issues.
In addition, a number of current DFID programmes
include support to local civil society on tax and fiscal issues,
for example in Sierra Leone, Nigeria and Kenya. It is appropriate
that consideration be given to these issues in tax programmes
as well as programmes focussing more broadly on civil society
support. DFID engagement with the ICTD and other international
initiatives such as the IBP, and through work at the country level,
should in time increase public participation in tax policymaking.
3. We urge DFID to stress—in its dealings
with the national revenue authorities of developing countries—the
importance of making corporate accounts available to the public.
In Zambia, to test the allegations that the process is not working
at present, DFID should request access to the accounts of some
of Zambia's main corporations, using channels available to the
ordinary Zambian citizen. In its response to this report, the
Government should notify us of the outcome of these requests.
(Paragraph 25)
Agree. The UK Companies
Act requires limited companies to publish statutory
accounts information so that third parties can
assess the financial health of the company. The Government
would encourage jurisdictions that do not have such a requirement
to consider its introduction. The Government believes the wider
benefits of this in commercial decision-making justify the costs
to companies and to government of fulfilling this obligation.
Work to look at the benefits of public statutory
accounts at the OECD Task Force on Tax and Development (to which
DFID contributes funding) has highlighted some of the advantages
of making accounts available from the point of view of increasing
transparency and in particular providing information on transfer
pricing transactions. The report has been welcomed by the Task
Force and will soon be made available as a resource for jurisdictions
considering the benefits of the public registration of the statutory
accounts of unlisted companies. It should be noted that the accounting
information is also valuable to investors and creditors
although this dimension was not the subject of the Task Force
report.
The Government nevertheless recognises that
a requirement for the public registration of statutory accounts
may be made for a wide variety of reasons most of which are not
related to tax issues and therefore it for each individual country,
whether a developed or developing country, to make its own decision
on whether to introduce such a requirement. The report prepared
for the OECD Task Force will provide a useful tool for countries
when considering whether to introduce a public filing requirement.
As requested, DFID has tested the system for making
corporate accounts available to the public in Zambia. Under Zambian
law, public companies (PLCs) are obliged to file annual accounts
with the Patents and Companies Registration Agency (PACRA). Members
of the public are entitled to request copies of these accounts
from PACRA. Using channels available to ordinary Zambian citizens,
staff of DFID's office in Zambia requested copies of the accounts
of 10 of the country's main corporations from PACRA. The
fee for this service was the equivalent of £3.50 for each
company. Requests for the accounts of five companies were
submitted on 20 September and for a further five on 24 September.
By 17 October, accounts had only been provided for one of these
companies. The reasons for this are not clear although, on the
basis of initial investigations with PACRA, concerning the first
five companies, it appeared that accounts for four of these companies
had had not been filed with PACRA. This experience appears to
substantiate the allegations referred to by the Committee that
the system is not working properly at present. DFID's office in
Zambia will share the results of this exercise with the Government
of Zambia.
For private companies, there is no requirement to
file accounts with PACRA. The main mining companies operating
in Zambia are private companies. A staff member of DFID's Zambia
office was able to successfully access summary financial information
for one of the major mining companies operating in Zambia, Konkola
Copper Mines (owned by Vedanta Resources PLC listed on the London
Stock Exchange), through the UK Companies House web-based
information service. However, this process required use of
a credit card with a UK address, so would not be readily available
to most Zambian citizens.
DFID understands that, under the Securities Act,
Cap 354 of the Laws of Zambia, all financial intermediaries conducting
securities business in Zambia must be licensed by the Securities
and Exchange Commission; that the licensing process includes submission
of financial statements; and that these financial statements are
available to members of the public. Whilst this mainly applies
to financial institutions, some private companies are also registered
as issuers of debt and equity instruments. However submission
of accounts is only required at the time of licensing or renewal,
not annually. The availability of accounts from the Securities
and Exchange Commission was not tested.
4. The Government should encourage the OECD and
other standard-setting fora to require the filing of public statutory
accounts in all jurisdictions. The Treasury should also press
Crown Dependencies to meet these standards. (Paragraph 26)
Partially agree. As noted
above, the Companies Act requires limited companies to publish
statutory accounts information and the Government would
encourage jurisdictions that do not have such a requirement to
consider its introduction. The Government does not believe,
however, that the adoption of a requirement for public statutory
accounts by the OECD is a realistic prospect at the present time
given the diversity of requirements existing across OECD members
(and indeed while the OECD can develop standards it cannot set
"requirements" as such). This is unlikely therefore
to be the most fruitful approach to making progress on this important
issue in the context of developing countries.
An important first step is, however, for jurisdictions
to ensure that reliable accounting records are kept for all relevant
entities and arrangements and that these are available to competent
authorities, such as revenue authorities. These are both requirements
of the international standard reviewed by the Global Forum on
Transparency and Exchange of Information for Tax Purposes. The
Government would like to see as many jurisdictions as possible
join the Global Forum. Once the requirement for accounting records
is in place, it may be a relatively straightforward step to make
accounting information publicly available.
Another important aspect of the process is how accounts
are disclosed to the public. The method of disclosure at present
varies from country to country and therefore ease of access is
different from country to country. This issue has been raised
in the discussions at the OECD Tax and Development Task Force
and it has been agreed that the OECD Secretariat would explore
the possibilities of working with industry on a partnership project
to improve internet access by the public and by tax administrations
to financial data that is already publicly available.
As regards the Crown Dependencies' requirements for
statutory accounts and their meeting of international standards,
the Crown Dependencies have provided an information note that
is annexed to this response. The UK Government will continue
to encourage the Crown Dependencies to maintain the
highest international standards in relation to taxation and public
accounting.
5. DFID should support the governments of developing
countries as they seek to incentivise hitherto unregistered enterprises
to join the formal, taxpaying economy. (Paragraph 32)
Agree. An overwhelming
characteristic of most low-income countries is the very large
number of informal enterprises. Over 20 DFID country offices have
programmes to improve the regulatory environment by cutting red
tape, increasing the predictability of regulations and reducing
the cost of compliance to encourage firms to formalize and access
new business opportunities. This includes not just improvements
to tax administration but also business registration and licensing,
contract enforcement, enhancing property rights, access to finance
including secured transactions, debt resolution and streamlining
customs procedures. In many cases DFID works closely with the
World Bank Group to deliver these improvements.
DFID has partnered with the Centre for Economic Policy
Research (CEPR) to launch in December 2011 a £15million research
programme - Private Enterprise Development in Low Income Countries
(PEDL) - which has a focused research area on "The
dynamics of SMEs: Informality and entrepreneurship"
to help us understand better what drives firms decisions to stay
informal.There is a debate about whether informality enables business
owners to escape excessive regulation or reflects unfair competition
as some businesses escape efforts of the state to regulate the
economy in a reasonable manner. This debate has direct relevance
to poverty, as a large share of low-income households earn their
living from informal employment. It is also relevant to the growth
of the broader economy: informality may represent an entry point
for nascent entrepreneurs, but if high-ability entrepreneurs are
unable to grow because of barriers to formalisation, then small
firms will be unable to exert competitive pressure on larger incumbents.
The PEDL programme is awarding research grants to proposals that
explore these and other hypotheses about the role of informal
enterprise in low income countries.
The International Centre for Tax and Development
(ICTD), which DFID jointly funds with the Norwegian development
ministry, has a 5 year research programme with a research theme
on informal taxation. The Government hopes that the findings
from the ICDT and PEDL research initiatives will inform the development
of a new generation of donor programmes that can better address
the dynamics and incentives underpinning firm informality.
DFID also supports the International Growth Centre
(IGC) which utilises the best of British expertise to provide
independent, high-quality growth policy advice based on cutting-edge
research to 11 DFID partner countries. The IGC has a specific
research theme on firm capabilities that deals specifically with
issues such as the impact of and barriers to formalisation. Specifically
the IGC has undertaken enterprise mapping, in Ethiopia and Ghana,
to examine the origination and capabilities of leading industrial
companies, focusing on large and mid-size firms, in order to help
build and expand these capabilities for increased growth. Specific
recommendations included structural reform of the Ethiopian Investment
Agency (EIA) to become more pro-active with licensed firms that
are not yet operational and to encourage formal registration.
GLOBAL-LEVEL TAX POLICY
6. We recommend that the Government introduce
legislation similar to the relevant section of the US Foreign
Account Tax Compliance Act (FATCA), requiring tax authorities
automatically to exchange information relating to UK citizens
or corporations. The Government should also use its influence
(via the OECD Tax and Development Task Force, and similar avenues)
to persuade other governments to follow suit. (Paragraph 41)
Disagree. The Government
is fully committed to tackling tax evasion and sees transparency
and information exchange as key tools but does not regard the
introduction of FATCA in the UK as an appropriate means to achieve
this. FATCA is unilateral and extraterritorial in its approach
and has created significant difficulties for the US as well as
affected countries in its implementation. The UK approach is to
work in partnership with other governments, including those in
developing countries, to increase tax transparency and exchange
of information. The Government works closely with the G20, EU
and OECD to deliver real progress in international tax transparency
and substantially increase levels of information exchange. The
Government tailors its approach to best suit each circumstance,
making use of exchange on request, spontaneous exchange and automatic
exchange, as appropriate. An example very relevant to developing
countries is the promotion of the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters, which provides a very
cost effective way to access the benefits of information exchange.
The UK, as a party to the Convention, has sought to ensure that
the criteria for joining the Convention are such that they do
not act as a barrier to entry to developing countries. The aim
of this overall approach is to develop a comprehensive network
of tax information exchange agreements which will enable the UK,
and others to gain access to relevant information held in other
jurisdictions.
7. To help developing country revenue authorities
to tackle transfer pricing abuse, DFID should stress—in
its dealings with these revenue authorities—the importance
of requiring 'related party transactions' (i.e. transactions taking
place within the same corporation) to be declared on annual tax
returns. (Paragraph 48)
Partially agree (pending
further work on this issue). The question of how a specific schedule
to a tax return detailing significant transfer pricing transactions
can help tax authorities with risk assessment is currently under
discussion in the OECD Task Force on Tax and Development. The
formulation of a model schedule is an option being considered
as part of this work. Where tax authorities believe they are currently
unable to properly assess transfer pricing risk, the Government
envisages that this would be an approach worthy of consideration.
8. In order to understand the perspective of multinational
businesses on transfer pricing issues, HMRC should meet the CBI
to discuss the issue. HMRC should also seek the views of trade
unions and civil society organisations. HMRC should report back
to the Committee before the end of 2012 to advise us of the outcome
of these discussions. (Paragraph 49)
Agree. The Government
accepts this recommendation, which it understands to relate more
specifically to understanding multinationals' and others' perspectives
on building transfer pricing capacity in developing countries.
HMRC already has a good understanding of the more
general perspective of multinational businesses on transfer pricing
issues. In addition to working with particular businesses, HMRC
meets regularly with specialist practitioners and representative
bodies such as the CBI, the Business Tax Forum and the Law Society.
HMRC also works with UK business through the EU Joint Transfer
Pricing Forum, which is composed of representatives from both
business and tax administrations.
HMRC will meet with the CBI and civil society organisations
later this year to explore how to bolster the transfer pricing
capacity building in developing countries.
9. As a matter of urgency, the Government should
conduct or commission an analysis of the likely financial impact
of the revised Controlled Foreign Companies rules on developing
countries. Depending on the results of this analysis, the Government
should consider whether to drop its proposals. (Paragraph 55)
Disagree. The Government
is reforming the corporate tax regime in order to encourage investment
and drive growth in the UK. A key part of this is the reform of
the Controlled Foreign Companies (CFC) rules. Without reform
of the CFC rules, the UK economy would be damaged by more companies
leaving the country. The question of the impact of CFC reform
on developing countries was debated in Parliament during the passage
of the Finance Bill 2012. The Government has been clear
that any assessment would need to focus on the tax regimes of
other countries, making it an assessment not of UK tax rules but
the tax rules of other countries and their application to the
relevant subsidiaries of UK headed groups. Therefore it is not
feasible to produce an estimate that would be sufficiently robust
or accurate to be of value.
Whilst the Government does not think that any such
assessment would be feasible, it is committed to helping developing
countries to build capacity and to access tax information on which
they can act to collect the tax that they are due.
10. The Government should designate a DFID ministerial
responsibility for the development impact of tax and fiscal policy.
Furthermore there should be an administrative or legislative requirement
for the government to assess new primary and secondary UK tax
legislation against its likely impact on poverty reduction and
revenue-raising in developing countries, and to publish that assessment
alongside the draft legislation. (Paragraph 56)
Disagree. The development
impact of UK tax and fiscal policy, as with all other areas of
government policy, is a collective responsibility of all Ministers
across government. DFID, the Treasury and HMRC already work closely
together on all relevant tax matters and will continue to do so.
The UK is committed to helping developing countries build robust,
fair and sustainable domestic taxation systems.
The Government does not believe that it would be
proportionate or feasible to introduce a requirement to conduct
an impact assessment on poverty reduction and revenue-raising
in developing countries for all primary and secondary tax legislation
in the UK. Instead, the UK is providing focussed support through
capacity building and technical assistance, to help ensure that
developing countries are in a position to build and protect their
own tax base and can access and act on tax information.
11. Given that the UK was involved in founding
the Extractive Industries Transparency Initiative (EITI), we feel
that it should now become an EITI candidate itself. Additionally,
the UK should encourage EITI to broaden its scope: EITI should
require participating corporations and governments to publish
the contracts which exist between them, and should also require
the publication of percentage figures in addition to absolute
figures. (Paragraph 62)
Partially agree. As noted
by the then Parliamentary Under-Secretary of State for International
Development, Stephen O'Brien, in his evidence to the Committee
the UK has not implemented the EITI in the past as it was not
considered resource-rich by the IMF. Yet the UK is an active
supporter of the EITI by providing financial and political support
to encourage countries to join and then implement the Initiative.
DFID provides support to the Secretariat, the EITI multi-donor
trust fund which provides technical assistance to implementing
countries and represents the UK on the EITI Board. DFID bilateral
programmes also support EITI candidacy and/or implementation,
for example in the Democratic Republic of Congo, Nigeria, Afghanistan
and Burma.
The Government welcomes the Strategy Review of the
EITI which is underway to develop a broader standard for consideration
by the EITI Board, with a view to possible introduction in 2014.
This aims to recognise countries which are prepared to go beyond
revenue transparency and look at how to provide additional information
along the resource chain so that citizens can see if their governments
are getting a good deal from their extractives wealth. The UK
is an active participant in the Strategy Review, which is a multi-stakeholder
process considering a wide range of proposals which could be included
in a revised standard. These proposals include disclosure of contracts,
more disaggregated reporting of data and background on the sector,
among other proposals.
12. Irrespective of whether EU-level agreement
is reached, the Government should enact legislation requiring
each UK-based multinational corporation to report its financial
information on a country-by-country basis. Such information should
include the names of all companies belonging to it and trading
in each country, its financial performance in each country, its
tax liability in each country, the cost and net book value of
its fixed assets in each country, and details of its gross and
net assets in each country. Additionally, the UK should continue
to support the progress of similar legislation at EU level. (Paragraph
66)
Partially agree. The Government
supports mandatory reporting requirements at the EU level, via
changes to the Accounting Directive, to improve transparency in
the extractives and forestry sectors by requiring companies to
disclose tax and other payments made to governments. This will
help to promote accountability for the use of these revenues and
tackle corruption in resource-rich developing countries. The Government
would also encourage other jurisdictions to introduce similar
legislation.
The Government does not believe, however, that the
case has been made in terms of cost and benefits of extending
the current proposals for EU mandatory requirements, via the Accounting
Directive, to report payments to governments beyond the extractives
sector and loggers of primary forests, as has been suggested by
the European Parliament.
The more extensive model of country by country reporting
outlined in Recommendation 12 (and described in the Committee's
report as the EURODAD model) is not aimed primarily at promoting
accountability over revenue paid to governments. Rather, it is
regarded by its supporters as providing the information necessary
to allow third parties to assess whether multinationals pay correct
amounts of tax in their countries of operation or whether abusive
profit-shifting has occurred. This model has been discussed in
the OECD Task Force on Tax and Development without any consensus
being reached on its merits. The Government believes the case
has not been made for the effectiveness of this model in achieving
its objectives while minimising the costs to business. Moreover,
it is not something that developing country tax authorities appear
to be advocating.
Nevertheless, the Government agrees that many developing
countries will need to improve their ability to assess transfer
pricing risk and detect abusive profit shifting and other options,
such as the transfer pricing transaction schedule described in
Recommendation 7, could offer more proportionate and effective
ways of achieving this.
UK GOVERNMENT'S WORK ON TAX IN DEVELOPING COUNTRIES
13. We re-iterate our earlier recommendation,
made in our Report on CDC last year, that the tax payments made
by CDC's fund managers and investee companies should be published
annually on a country-by-country basis. If certain fund managers
or investee companies are unwilling to agree to this, CDC should
use alternative companies which are willing to be more co-operative.
(Paragraph 71)
Partially agree. One
of the Government's main priorities for development is to foster
successful private investment and enterprise in the poorest countries.
CDC is an important actor in this; and to play its role it needs
to act in a commercially viable way. The Government must be careful
to maintain a balance between its commitment to openness and transparency
on the one hand, and the need to understand and respect commercial
confidentiality and contractual obligations on the other. Information
on tax payments by the companies in which CDC and the investment
funds managed by CDC's fund managers invest is not generally publicly
available on a per company basis - and is typically subject to
confidentiality provisions in contractual documentation. For these
reasons, CDC is publishing on its website aggregated annual data
on a country-by-country basis of tax payments by investee companies.
CDC is committed to obtaining further improvements
in tax transparency and disclosure, but this will take time.
Until then, the Government should be careful not to restrict unduly
CDC's ability to mobilise investment and get capital to work in
the poorest parts of Africa and South Asia by imposing disclosure
requirements on CDC for businesses, fund managers and the other
entities that CDC engages with that other investors do not require.
To do so would constrain CDC's ability to invest in and alongside
these entities and would likely result in CDC overall doing less
investment in poorer countries and frontier markets rather than
more.
CDC will consider ways, which may include further
disclosure, to ensure the continued fair and full payment of taxes
by its investee companies to the countries in which they are based.
CDC will consult on this matter with the wider Development Finance
Institution community.
14. We recommend that DFID scale up its technical
assistance work with the national revenue authorities of developing
countries. (Paragraph 75)
Agree. The Government
agrees with the Committee's recommendation that there is a good
case for scaling up DFID's technical assistance work with revenue
authorities in developing countries. Detailed proposals are being
developed for how this might be achieved. An option under consideration
is funding for HMRC to increase the level of technical assistance
it provides to developing countries. Discussions are ongoing between
DFID and HMRC with a view to preparing a business case. If this
approach and business case are approved the likely aim would be
to put arrangements in place during the course of the 2013/14
financial year. Ministers will write to the Committee with details
when any arrangements have been agreed.
More support will be provided to DFID country offices
on tax matters and, for example, to assist with the scoping of
tax projects and to ensure that the research work being undertaken
through the, DFID funded, International Centre for Tax and Development
helps to inform practice. This may result, over time, in an increase
in tax work at the country level. However, decisions on individual
country programmes will continue to be made on the basis of the
local country context.
15. We recommend that HMRC be provided with additional
funding, to allow it to scale up its own technical assistance
work with developing country revenue authorities. (Paragraph 80)
Agree. As noted in the
response to question 14 above, options are being developed on
scaling up technical assistance work and one that is currently
under active consideration is DFID funding for HMRC to increase
the level of technical assistance it provides to developing countries.
If this option is taken forward it is likely that arrangements
could be put in place during the course of the 2013/14 financial
year.
16. The UK Government should improve its reporting
on its technical assistance on tax and development, reporting
cross-departmentally and at a project level on work in this area.
(Paragraph 81)
Partially agree. DFID
will continue vigorous implementation of its Aid Transparency
Guarantee policy and DFID's Open Data Strategy (http://www.data.gov.uk/library/dfid-open-data-strategy).
For example, since 2011, all project documents (Business Case,
Annual and Project Completion Reviews, Log frames) are published
online. This will includes all DFID projects which involve, in
whole or in part, capacity building and technical assistance on
tax.
As part of this process, The Government is committed
to continue to improve the quality and accessibility of what is
published, responding to the needs of people using this data.
DFID will consider whether there are changes that can be made
to its finance and performance reporting system and information
platform (http://projects.dfid.gov.uk) to make it easier for users
of data on tax, or indeed other subjects, to find what they are
looking for. The priority will remain on achieving the Government's
broader aid transparency objectives rather than providing issue-specific
reporting on tax or other topics. DFID will however discuss with
the OECD DAC Secretariat whether it might be appropriate to establish
a specific classification code for tax-related interventions,
which, if implemented across all donors, has the potential to
help improve donor coordination as well as the monitoring and
evaluation of tax-related projects.
DFID and HMRC are also exploring whether information
on HMRC's technical assistance work (i.e. where this is not carried
out as part of a DFID programme) can be made available through
the DFID information platform.
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