Fiscal Reform for a Strong Tunisia: Short Term Technical Assistance Consultant’s Report

The mission aimed to finalize a presentation note of the strategy, develop a set of compliance measurement indicators, and prepare a two-year action plan for implementation. Final deliverables included a final compliance strategy document, a detailed two-year work plan, and a list of compliance indicators. A preliminary working session was organized with the Tunisia FIRST project to fine-tune the agenda. Four brainstorming sessions were held with officials from the tax administration, supported by working documents prepared in advance. A list of 28 compliance measurement indicators was drafted, with targets proposed for 2018 and 2019 when a baseline was available. A two-year action plan, including deliverables and timeframes, was delivered to the Tunisia FIRST project for integration into its overall action plan. Participation in the working sessions was open and active, with the head of the risk management unit of the Direction Générale des Impôts (DGI) serving as the focal point for the compliance strategy implementation project. The strategy was approved instantly, with only minor modifications requested by the authorities. Discussions on indicators and compliance measurement were technical and allowed for the drafting of a comprehensive document describing all indicators, their purpose, and their method of calculation. However, discussions on the action plan proved more difficult, with resistance to key actions resurfacing. Senior managers, including the Secretary General and Directors General, were generally supportive of the action plan but stressed that no decreases in tax revenue, even temporary, would be accepted. Ministry participation from various DGs provided adequate representation, but attendance was too large in individual sessions, which was detrimental to productivity. The mission encountered some issues, including difficulty in obtaining involvement from the Direction Générale de la Comptabilité Publique et du Recouvrement (DGCPR). However, once secured, their representatives were very supportive and open-minded. To address these challenges, attention should be paid to the governance of the project, with roles and responsibilities clearly defined and described in documents such as the Terms of Reference (TOR). Follow-up would be helpful in the short term for the finalization of the action plan. Urgent technical assistance is needed for the re-drafting of the penalty section of the tax procedure code, and presumably for the cleaning up of the tax register. In the middle term, technical assistance on the review of core processes, including the treatment of non-filers, debt collection, and VAT refunds, should be considered.