USAID FISCAL REFORM FOR A STRONG TUNISIA PROJECT SEPTEMBER PERFORMANCE REPORT

The project focuses on enhancing the efficiency, transparency, and cost of compliance of tax administration, as well as improving the capacity of the Ministry of Finance to develop and manage tax policy. Tax administration assistance is a key component of the project, with the objective of creating more streamlined, transparent, and predictable tax administration processes. FIRST has been working with 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), to improve audit procedures. The proposed new audit strategy would authorize targeted desk audits by the tax administration in lieu of longer, more comprehensive audits, with the aim of increasing revenue and improving compliance. The proposed strategy has received near unanimous support from key stakeholders, including the MoF General Secretary, DGI, DGCPR, and DGELF. However, the MoF has voiced concern over the challenges of drafting the legal text necessary for inclusion in the draft 2019 Finance Law. FIRST has proposed the use of an Estonian interoperability platform, the Unified Exchange Platform (UXP), as a commercially available technology that Tunisia should consider. The UXP would enable efficient use of third-party data for real-time access by the tax administration authority to taxpayer data. In addition to tax administration assistance, the project also focuses on tax policy and other fiscal reforms. The objective of FIRST's activities in tax policy is to support the Government of Tunisia in enhancing its capacity to develop and manage tax policy. The project has been working with the Ministry of Finance, specifically the Tax Legislation and Studies General Directorate (DGELF) and the Tax Advantages General Directorate (DGAFF), to improve skills and capacity to produce analysis and options that help the MOF make informed policy decisions. The project has also been providing assistance in post-clearance audit for Customs. A Customs and Post-clearance Expert started a short-term assistance assignment with FIRST in August 2018, with the objective of mapping the current post-clearance audit environment, the organizational structure and legal framework that supports it, and proposing recommendations for reforms. The FIRST Post-Clearance Audit specialist collaborated with the different units within Tunisian Customs that address post-clearance audit functions, providing a clear picture of current and planned organizational structures that will impact post clearance audit, as well as the projected recruitment and training that will be needed to meet targeted levels of competent officials. The project has made significant progress in September, with the finalization and presentation of a conceptual note on the proposed new audit strategy, as well as the preparation of a draft "explanatory statement" for the DGELF to assist in justifying the advantages of the proposed revision. The project has also launched a scoping mission with a Master Data workstream workshop at the CIMF, with specific work streams and leaders agreed upon. Working groups managed by each workstream lead defined activities, deliverables, and target dates of each workstream, and a draft report of the workshop was sent to the participants for review and enhancement.