Africa is to be a key focus for a new decade-long tranche of the international Tax Inspectors Without Borders (TIWB) capacity building project, which has since 2015 been helping developing countries worldwide improve tax collection, and with it, government effectiveness.
Known as TIWB 2.0, the expanded programme will extend the collaboration between tax experts at the OECD, aid workers at the UN Development Programme, and governments worldwide, plus specialist NGOs, into new jurisdictions and new areas of activity.
The initiative offers practical help to often hard-pressed and underfunded tax administrations around the world. It has enabled countries to secure an additional US$2.4bn in revenue since 2015, US$1.9bn of which has been raised in Africa.
Lack of specialist tax capacity makes for erratic or weak tax collection and many African states undershoot the 13.6% global average of tax revenue to GDP ratio, as measured by the World Bank, not to mention what the bank considers the 15% key threshold for economic growth and poverty reduction. For example, for the Republic of the Congo the ratio is 6.5% (according to the most recent data, from 2021), for Ethiopia 3.4% (2024) and for Zimbabwe 7.2% (2018).
Phase 2.0
TIWB says it will continue with ‘the deployment of experienced tax experts to work side by side with domestic audit teams in developing countries, strengthening local capacity through real-time support in concrete audits and investigations’. Its goal is ‘enabling developing countries to address complex tax issues, such as transfer pricing and base erosion and profit shifting’.
‘Sectoral tax audits work to identify tax avoidance loopholes’
There will, though, be changes of emphasis in TIWB 2.0.
Engagement with national tax administrations will be scaled up, with support tailored more closely to countries’ evolving needs to generate a stronger political momentum for tax collection cooperation, nationally and globally, The aim is to strengthen peer learning on tax collection, expand into new policy priorities such as digital trade, implement global tax laws better, and stage more sector-specific tax audits.
Honing tax audits in sectors with complex transfer pricing will be another key future focus – for example, in telecoms and the extractive sector – to help tax administrations understand how they create value. Nathalie Bernasconi-Osterwalder, vice president for global strategies at International Institute for Sustainable Development, says that sectoral tax audits work to ‘identify precisely the loopholes that multinational companies use to avoid paying taxes’.
However, Giulia Mascagni, executive director for tax administration and compliance at the International Centre for Tax and Development, warns that audit interactions need to be handled tactfully so as not to ‘undermine that trust which is absolutely essential’ for tax collector/payer relationships. ‘It’s very hard to build trust and very easy to lose it,’ she points out. ‘Heavily constrained capacity and resources’ intensify the pressures – the average tax official in a developing economy deals with 10 times as many taxpayers as in a high-income country.
Decade of success
One beneficiary of TIWB’s work to date is Botswana, one of Africa’s economic success stories, with a GDP per head of US$7,700 in 2024. The country’s Unified Revenue Service commissioner general Jeanette Makgolo says: ‘The TIWB programme helped in skills and knowledge transfer through actual audits and workshops and institutional development through legislative support.’ It also supported Botswana in drafting transfer pricing legislation, which has improved taxpayer compliance and revenue generation.
‘TIWB is helping combat tax evasion, corruption and money laundering’
Rohit Ramnawaz, director-general of the Mauritius Revenue Authority (MRA), says his agency has also gained significantly from TIWB, ‘which has strengthened technical expertise in transfer pricing audits, risk assessment and compliance among multinational enterprises’. TIWB initially helped Mauritius undertake audits of major hospitality companies. Ramnawaz says that a second phase of cooperation is boosting the MRA’s capacity to combat financial crime, including tax evasion, corruption and money laundering.
Africa’s most populous country Nigeria is another long-time TIWB collaborator – on transfer pricing in audits, including risk assessment, case selection, audit procedures and case completion. Like Mauritius, Nigeria has inaugurated a TIWB criminal investigation programme to help fight tax-related crime. Giwa Rasheed, a tax consultant for Nigeria’s Federal Inland Revenue Service, says: ‘This is an initiative we need that will give us the break in tax investigations. There are local tax schemes that cannot be conclusively investigated without recourse to offshore collaboration.’
More information
Read TIWB’s report on its first 10 years, and AB’s 2017 ‘Tax skills transfer’ article about how TIWB 1.0 set about its work
