USAID FISCAL REFORM FOR A STRONG TUNISIA PROJECT MAY PERFORMANCE REPORT

The project's main objective is to enhance the efficiency, transparency, and cost of compliance of tax administration. The primary counterpart institution for this component is the Ministry of Finance (MOF), 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 activities in tax administration assistance focus on creating more streamlined, transparent, and predictable tax administration processes. One of the key activities is the implementation of the Tax Administration Diagnostic Assessment Tool (TADAT), a global tool used by more than a dozen countries to assess the relative strengths and weaknesses of their tax administration system. The TADAT assessment focuses on the administration of core taxes, including corporate income tax (CIT), personal income tax (PIT), value added tax (VAT), and Pay-As-You Earn (PAYE). A compliance strategy workshop was conducted for MOF tax administration officials from May 9-14, led by a Tax Administration Expert and TADAT assessor. The workshop aimed to develop a compliance strategy that would address the weaknesses in the tax administration system. The workshop identified four areas of improvement, including focusing on taxpayers' future behavior, improving taxpayer segmentation, adapting tax administration actions to taxpayer behavior, and improving taxpayer information and access to that information. The project also proposed the implementation of an Estonian interoperability platform, the Unified Exchange Platform (UXP), as a commercially available technology that Tunisia should consider. The UXP platform would enable real-time access by the tax administration authority to third-party data on taxpayers, which would be essential for taxpayer compliance. The MOF has approved the data exchange (UXP) project, and a working group is being created to implement the project. The project has also presented an action plan to the MOF to reform the compliance strategy based on TADAT findings and recommendations. The final draft of the compliance strategy will be presented for approval to the steering committee during the next meeting scheduled for June 26. The project has also proposed to support the Customs Administration in defining their strategy and procedures manual for post-clearance audit. The project's activities in tax policy and other fiscal reforms assistance focus on supporting the Government of Tunisia in improving its tax policy and other fiscal reforms. The project has developed an action plan to support the Fiscal Analyses Unit (FAU) priorities for the next three months, including FIRST's tax gap analysis work, CGE training, and the development of microsimulation models for the personal income tax (PIT), value added tax (VAT), and corporate income tax (CIT). The project's activities in strategic communications assistance focus on supporting the Government of Tunisia in improving its strategic communications. A working group was created, including MOF, DGI, DGCPR, DGELF, and CIMF communications personnel. FIRST and MOF communications directors approved more than twenty activities included in the action plan, and all strategy components were agreed upon. The members will meet once per month after that first meeting to implement and monitor the action plan.