USAID FISCAL REFORM FOR A STRONG TUNISIA PROJECT JANUARY PERFORMANCE REPORT

The project's activities are focused on enhancing the efficiency, transparency, and cost of compliance of tax administration. The Ministry of Finance (MOF) is the primary counterpart institution for this component, with the Tax Administration General Directorate (DGI), the Tax Collection and Public Accounting General Directorate (DGCPR), and the MOF Data Center (CIMF) also involved. The project's tax administration activities for January included the following: creating more streamlined, transparent, and predictable tax administration processes; enhancing tax administration modernization; and institutionalizing risk-based approaches to audit to improve compliance. The Tunisian Ministry of Finance sent an official request to the IMF secretariat for a Tax Administration Diagnostic Assessment Tool (TADAT) analysis, which will help articulate the strengths and weaknesses of the tax system and provide a roadmap for tax administration reforms. The TADAT exercise will focus on modernizing tax administration processes, using international best practice methodology. The assessment team will be led by a USAID economist, and the in-country assessment phase will start on March 12, 2018. The project will also assist the government in conducting a data requirements study to locate sources of key third-party data and secure written commitments to share data with the tax administration. In addition, the project will support the implementation of an automatic data exchange solution, such as the Estonian interoperability platform, the Unified Exchange Platform (UXP). The project will also assist the Ministry of Finance in improving and promoting the current e-filing system, which has the basic functionality needed to support electronic submission of tax declarations. The tax administration and the CIMF have expressed the need for the promotion of the current e-filing system, while highlighting the fact that increasing taxpayers' use of the system will significantly impact the data bases. The project's tax policy component has finalized the VAT tax gap analysis, which focuses on the distribution of the VAT tax gap for the 107 sectors of activities. The results have been reviewed and validated by the DGELF Director of Indirect Tax. The project will also assist the Ministry of Finance in developing an e-filing mobile phone application, while promoting the existing solution. The project's strategic communications team introduced the team leader to the MOF Communications Director and DGI Communications Director. The team is initiating a communications campaign for the rollout of MOF's e-filing software. The project's objective is to support the Government of Tunisia in enhancing its tax policy, with a focus on improving the efficiency, transparency, and cost of compliance of tax administration. The project's activities are currently supported by a team leader, a deputy team leader, and a tax administration specialist. The project's primary counterpart institution for this component is the Ministry of Finance (MOF), the Tax Administration General Directorate (DGI), the Tax Collection and Public Accounting General Directorate (DGCPR), and the MOF Data Center (CIMF). The project's activities are expected to have a positive impact on the tax administration and fiscal policies of Tunisia, leading to enhanced compliance, improved taxpayer services, and increased revenues.