To make responsible tax decisions, people need to have knowledge, skills and confidence in the tax system. There are number of ways in which the public can gain these, such as teaching tax - educating taxpayers about the tax system, how it works and why it matters. But educating taxpayers is not just the business of tax administrations. To succeed, collaboration and partnerships with other stakeholders such as schools, professional bodies, business associations and non-governmental organisations are essential, especially at a time when already stretched tax authority resources are strained still further by the impacts of the COVID pandemic.
With this in mind, ACCA and IFAC in collaboration with the OECD organised a global online event to discuss the main findings of the recent report from the OECD, Building A Tax Culture, Compliance and Citizenship: A Global Source Book on Taxpayer Education (Second Edition) revolving around the three main approaches around taxpayers’ education identified in the report - teaching tax; communicating tax; and supporting taxpayers directly in compliance. The panel of experts, moderated by Scott Hanson, Director of Public Policy & Regulation at IFAC and welcoming Agnija Rasa, Deputy head of unit Management of programmes and EU training at DG TAXUD; Giulia Mascagni, Research Director of the International Centre for Tax and Development (ICTD) and Research Fellow at the Institute of Development Studies (IDS); Richard M Kayombo, Director For Tax Payer Services and Education at Tanzania Revenue Authority and Jason Piper, head of Taxation, at ACCA also examined how to foster effective collaboration among the key actors.
Helen Brand, OBE, Chief Executive of ACCA said in her opening remarks: ‘to build public trust in tax systems, it’s vital to provide citizens with the information necessary to understand how the tax system works; the rights and obligations of taxpayers; and importantly how citizens can influence the evolution of the tax system. At ACCA, we’re determined to play our part, though the education, lifelong learning material and the series of technical and policy reports we deliver. And through engaging with key stakeholders - including the younger generation - to support financial education, and drive trust in tax and trust in the profession, in the public interest’.
Grace Perez-Navarro, the Deputy Director of the OECD Centre for Tax Policy and Administration, presented the main highlights of the OECD report and said ‘While there are differences between these three approaches, there are also common threads. Identifying and reaching the target audience is often the biggest challenge. We cannot rely on existing tools to reach that target audience, we need to come up with new ones. Partners beyond the tax administration are also important. Finding partners who are in contact and are trusted by the target audience is vital to the success of these programmes. Taxpayer education is a long term project - changing the culture won’t happen overnight so we need to be realistic about what can happen and when. Securing resources and keeping them going is a universal challenge, and timing of delivery can be vital as well’.
The discussions confirmed that the question is not whether education is needed - the lack of tax education is a world-wide problem - but how this should be done, and that there is a need to be more specific in understanding the impact of tax education. All speakers agreed on the vital need to collaborate to promote it. To achieve this, the contribution from public authorities for taxpayer education and for creating partnerships built on trust and accountability is central along with other trusted sources such as the community of accountants, civil society and academics to use all voices to reach a wide audience. It was stressed that influencers such as musicians can also become tax ambassadors, and the power of social media needs to be used for impact and engagement. Panellists agreed with the importance of starting to collaborate from the design stage of tax education.
Victor Negrescu, MEP said: ‘Ownership, responsibility and accountability are three key elements when it comes to the purpose of tax education, with short and long term impacts attached. I call on the organisers - ACCA, IFAC and the OECD- the EC and the EP to organise a stakeholders' group where we can elaborate more on this issue and enhance taxpayer education, but also take a leadership role in promoting tax education, thinking ahead. All the money allocated in tax education is an investment in better policies for better lives and a sustainable future for everyone’.
Alta Prinsloo, CEO of PAFA (Pan-African Federation of Accountants) said: ‘We cannot ignore the fact that citizens’ perception of public sector transparency, accountability, and governance impacts their willingness to pay taxes. Public trust is a key component of tax culture, compliance, and citizenship. Actions to fight corruption therefore are essential. Actions to enhance public financial management is key. Taxpayer education will be most impactful when considered in this wider context.’.
Kevin Dancey, CEO of IFAC concluded: ‘Today’s discussion has given a hint of the diversity of stakeholders that need to come together on the issue of tax education, and highlighted how central the accountancy profession is amongst those stakeholders. There are a number of important intersection points to consider. First, the role of professional accountancy organizations, and their role in driving ethics in tax practice. Second, the role of the individual accountant, in upholding the core principles of the International Code of Ethics. And finally, that there is more that accountants and PAOs can do, not just in tax education, but in financial literacy more broadly’.