TIWB Donor - Norway
Technical Collaboration for Systemic Change
By Toril Iren Pedersen, Policy Director, Tax for Development, Norwegian Agency for Development Cooperation (NORAD)
"Can an initiative such as Tax Inspectors Without Borders (TIWB) contribute to a whole-of-government approach to tax system reform?" this is a question which the Norwegian government has raised through its Tax for Development programme.
The challenges of tax systems are complex and rely on a multitude of actors to ensure that the right policies are developed; sufficient capacity is in place to implement the policies; and a dispute and judicial process exists that acts to reduce impunity when discrepancies are found or crimes are committed. It also requires sufficient resources and trust to engage with taxpayers and citizens.
Accountability and transparency provide tax administrations with the legitimacy needed to perform effectively. This requires both technical and collaborative outreach to other government agencies, civil society, state- and non-state accountability actors. To strengthen the social contract and improve tax compliance, tax administrations must have the capacity and ability to engage on problem identification and solutions with stakeholders outside of the tax administration itself.
Norway would argue that using a broader lens to define the challenges faced by tax administrations allows key actors outside of the organisation to be identified as enablers and partners for change. With a wider problem analysis, the different stakeholders including government agencies and technical assistance providers may have a better tool to recognise collaborative whole-of-government actions and identify external resources. Collaborating on the capacity development journey with representatives from other institutions in-country can strengthen intra-governmental co-operation and build trust. This is why Norway supports the efforts of the Platform for Collaboration on Tax to harmonize and coordinate capacity development around government wide revenue planning processes in developing countries.
In addition, TIWB has the potential, and should take advantage of, broader United Nations Development Programme (UNDP) projects in the field of Good Governance and Rule of Law to promote whole-of-government approaches to tax administration. A successful tax system requires effective judiciary and parliamentary processes sufficiently well-versed in taxation. Anchoring tax administration capacity development within a wider framework has the potential not only to amplify the capacity building itself, but also to reinforce intra-governmental alliances and mechanisms that are crucial to reducing revenue losses and increasing domestic revenue.
Alliances and partnerships built through joint problem-solving often provide better solutions. The Harvard Center on Building State Capability (BSC) emphasizes this concept through an approach called “Problem Driven Iterative Adaptation”, parts of which are found in many TIWB programmes. This is very much in line with the core thinking of the TIWB initiative, but can be strengthened through a more deliberate approach.
The BSC faculty maintains that starting from a problem analysis, though an iterative experiment, structured learning and adaptation can empower action by local people, facilitate emergence of local solutions and create new capabilities to solve problems. This resonates with some of the early analysis of the COVID-19 pandemic undertaken by the Organisation for Economic Co-operation and Development (OECD), which concluded that at this time “all options should be explored, including revamping old tools, introducing new ones, and bolstering ongoing efforts to address the international tax challenges1.