USAID FISCAL REFORM FOR A STRONG TUNISIA PROJECT APRIL PERFORMANCE REPORT

The project's primary counterpart institution is the Ministry of Finance, including the Tax Administration General Directorate (DGI), the Tax Collection and Public Accounting General Directorate (DGCPR), and the MoF Data Center (CIMF). The project's tax administration activities focused on creating more streamlined, transparent, and predictable tax administration processes. A key initiative was the implementation of the Tax Administration Diagnostic Assessment Tool (TADAT), a global tool used by approximately 50 countries to assess the relative strengths and weaknesses of their tax administration systems. The TADAT assessment focused on the administration of core taxes, including corporate income tax, personal income tax, value-added tax, and Pay-As-You-Earn. The Ministry of Finance sent its feedback for the TADAT preliminary report on April 12, and assessors reviewed all information and documentation provided, amending the report as necessary. The final report was submitted to the TADAT Secretariat for final review and approval. The FIRST tax administration team conducted a preliminary analysis of the TADAT performance report to determine areas for improvement and prepare recommendations for a comprehensive compliance strategy. A short-term action plan based on targeted TADAT outcomes and the Year 1 Work Plan was drafted and shared with the Ministry of Finance for comments. The plan aimed to modernize tax administration processes and procedures through the use of new technologies, improve taxpayers' services, and enhance transparency and equity. The compliance strategy will define how compliance can be envisioned for Tunisia and how the tax administration can leverage risk management procedures to successfully implement the compliance strategy. The project also proposed the use of an Estonian interoperability platform, the Unified Exchange Platform (UXP), to facilitate data exchange between tax authorities and third-party data providers. The UXP platform has been used by virtually all OECD countries to access real-time data on taxpayers. The FIRST tax administration team presented the advantages of UXP to a team of CIMF officials, who gave their approval to move forward. The implementation of UXP is expected to begin after the Ministry of Finance has received feedback from the DGs. In addition, the project aimed to reduce the costs and burdens of taxpayer compliance. The Ministry of Finance created TUNIMPOT, a mobile income tax calculator tool, which allows individuals to calculate their taxable income and tax liability. The project has started the process of improving and further developing TUNIMPOT to enable medium and small taxpayers to remotely file and pay their taxes through the application. The project's tax policy activities focused on enhancing the Government of Tunisia's capacity to develop and manage tax policy. The objective of the Other Fiscal Reforms component was to enhance the Government's capacity in addressing other fiscal reform priorities as they emerge. The project's primary counterpart institution for this component was the Ministry of Finance, specifically the Tax Legislation and Studies General Directorate (DGELF) and the Tax Advantages General Directorate (DGAFF). The Tax Policy team conducted a tax gap analysis to measure the efficiency of tax administration systems by comparing actual revenues to achievable revenues under current tax law. The analysis is particularly useful in identifying major tax collection leakages, thus assisting in prioritization of tax administration improvement initiatives. The project's activities in tax policy and other fiscal reforms aimed to improve the skills and capacity of the Ministry of Finance to produce analysis and options that help make informed policy decisions.