Public participation in tax policy: framing the conversation Murray Petrie GIFT Stewards meeting MITRE Corporation, Washington DC, 10 October, 2017

Objective To start a conversation on transparency and public participation in tax policy and administration among the increasing number of stewards that have been working on the matter from different perspectives. Identify areas of complementarity Consider where and how GIFT may be able to add value

Public participation in tax policy: what is it, and why? GIFT’s framework for public participation: Direct engagement between public officials in the executive, legislature, or SAI, and the public - CSOs, business organisations, academics, experts, think tanks, the media etc, general public Both ‘invited’ and ‘invented’ participation High-Level Principle 10: participation in fiscal policy is a citizen right. Public participation has important instrumental effects: can help improve quality of policy and implementation, provide taxpayer perspective on tax equity, improve tax integrity, increase willingness to pay taxes

Audit and oversight Tax policy design Legislative approval Annual budget revenue measures Other changes to tax laws Tax administration Taxpayer services Taxpayer appeal mechanisms Annual reporting 'Big P' tax policy 'Small P' tax policy Non-tax revenue policy SAI audit Legislative oversight Social monitoring Audit and oversight Tax policy design Legislative approval

Patterns of public participation in tax Some long-standing areas of direct public engagement on tax policy: money bills, occasional government consultation, independent administrative review of tax admin. But public engagement can perhaps be characterised as: Most common at the legislative stage. At the executive stage, more likely on tax administration v tax policy design. Where on tax policy, on ‘small p’ policy With tax expert community more than the general public

International norms on revenue disclosure GFSM2014 and OECD Revenue Statistics IMF Fiscal Transparency Code 2014 2002 OECD Best Practices on Budget Transparency PEFA OBS 2017 EITI Standard 2016 TADAT: performance indicators for supporting voluntary compliance (taxpayers have the necessary information to comply with tax laws), and for accountability and transparency (the tax administration publishes details of its operational and financial performance and its plans). Addis Tax Initiative (ATI)

International norms on public participation in revenue policy and administration TADAT: interactions between tax admin. and taxpayers: time taken to respond to requests for information; obtaining taxpayer feedback; effective tax dispute resolution measures; monitoring public perception of integrity of the tax administration. The EITI Standard 2016 requires a functioning multi-stakeholder group; reconciliation of company payments and government revenues by Independent Administrator; stakeholders engaged in dialogue about natural resource revenue management. A supplementary Protocol sets out tests to apply in assessing compliance with civil society provisions in the Standard. IMF FTC 2014 (2.3.3): citizens have formal voice in budget deliberations (as advanced practice). OECD 2015 Recommendation on Budgetary Governance, Principle 5: ‘…parliament and citizens should be able to engage with and influence the discussion about budgetary policy options…’ PEFA PI-18.2: legislature’s budget scrutiny includes public consultation (to score an A). The 2014 IFAC/CIPFA International Framework: Good Governance in the Public Sector: Principle B.2 ‘engaging stakeholders effectively, including individual citizens and service users.’

Selected examples of ‘invited’ public participation in revenue policy UK: 2010 Tax Policy Making: A New Approach: commitment to consult on all tax changes NZ: Generic Tax Policy Process Taxpayer dispute resolution process: TADAT country assessments are finding this an area of relative strength: median score for 27 countries on P-7-19 of B, with a range of C+ to A. EITI: 52 countries implementing the EITI 2016 Standard A number of OGP countries have included commitments on revenue transparency and public participation in their current OGP Action Plans

Examples of ‘invented’ participation in revenue policy Budget civil society organizations have for some time been working on tax policy and tax administration issues: GIFT stewards FUNDAR, INESC and ICEFI working on tax expenditures, tax transparency, and access to tax files to reveal tax privileges in Mexico, Brazil and Central America. The Africa Tax Justice network has developed activities on tax incentives. GIFT partners such as the Centro de Investigacion Economica y Presupuestaria have done research on the availability of tax information in Mexico.