USAID FISCAL REFORM FOR A STRONG TUNISIA PROJECT

The unit's head, , has been officially appointed. The FAU will focus on providing in-depth analysis of tax policy and fiscal policy issues, as well as developing options for policy reforms. Tax policy activities for this month included the following: Skills and capacity to analyze and develop analysis and options that help the MOF make informed policy decisions improved. The IMF and World Bank use tax gap analysis to measure the efficiency of tax administration systems by comparing actual revenues to achievable revenues under current tax law. Tax gap analysis is particularly useful in identifying tax collection leakages, assisting in prioritizing tax administration improvement initiatives. The FIRST tax policy team has started working on the Corporate Income Tax (CIT) analysis and will work with the FAU to procure the necessary data for the analysis from the DGI. The team will also focus on developing a high-performance forecasting model to support the MoF in making informed policy decisions. The Ministry of Finance (MoF) has requested assistance in building an electronic system to encourage the use of digital services for taxpayers. FIRST submitted a proposal to build the target tax information and collection system in a phased approach, starting with a scoping phase. The MoF has provided its written consent for the proposal. The Unified Exchange Platform (UXP) is a commercially available technology that Tunisia should consider for its tax administration. FIRST facilitated an initial workshop on data exchange with the working group focusing on implementing the UXP solution. Participants confirmed the MoF's requirements for UXP implementation and worked out a list of institutions to approach for data exchange. The MoF has identified and initiated contact with institutions involved in data exchange, including Customs, health and social security, and the Technical Agency of Terrestrial Transport. FIRST will continue to prepare for the scoping visit by Cybernetica, which is planned for July 9-13. The Ministry of Finance (MoF] has agreed on the compliance strategy framework, which includes four strategic orientations. The strategy aims to improve tax compliance and reduce tax evasion. The MoF has requested that FIRST develop a measurement framework for tax compliance, including specific indicators to measure tax administration performance. The FIRST project has proposed the use of the IMF's Tax Administration Discrepancy Assessment Tool (TADAT) to assess the relative strengths and weaknesses of Tunisia's tax administration system. The TADAT assessment will focus on the administration of core taxes, including income tax, value-added tax, and payroll tax. The Ministry of Finance (MoF] has