The UK has announced that it will work with the Tanzanian and Ethiopian governments in capacity building projects aimed at improving the countries’ respective tax administrations.
The UK’s new tax capacity building programme, the Developing Countries Capacity Building Unit, which is funded by Department for International Development (DFID) will launch projects in both countries in partnership with the Tanzania Revenue Authority (TRA) and the Ethiopian Revenue and Customs Authority (ERCA).
Through the programmes Tanzanian and Ethiopian authorities will work together to tailor HMRC (Her Majesty’s Revenue and Customs) best practices to the infrastructure and resources available to help the two countries in strengthening their tax administrations and in the collection of overdue tax. The HMRC programmes will start work in Tanzania this coming summer while it will continue into a second phase in Ethiopia.
During the first phase of the programme, which began in Ethiopia in 2010, Ethiopian authorities had witnessed a 40% increase in revenue collection annually. HMRC tax professionals will work with their Tanzanian and Ethiopian counterparts to look at a range of areas in the administration of tax in an effort to conduct ‘health checks’ – including how the revenue authority is structured, how much tax is collected and what legislation is in place.
These findings will be used to establish the focus areas of the programmes. This could be in areas such as tax inspector training, improving the revenue authority’s website, developing a complaints handling process, and bringing in a risk management system. The UK government confirmed funding from DfID for a long-term programme of capacity building by HMRC to support developing countries’ tax and customs administrations through the new Developing Countries Capacity Building Unit in its 2013 budget.