By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-The International Monetary Fund (IMF) Wednesday unveiled a new tool the tax administration diagnostic assessment tool (TADAT) for improved tax administration to help member countries.

In a survey conduct by the Fund, many countries are in need of advancing tax administration reforms.

The IMF said the TADAT will help gauge the relative performance of tax administrations and offer insights on reform priorities going forward.

‘’ weak tax administration can compromise development, growth, and trust in government. Like all government agencies, tax administrations face strong public demands for efficient service delivery, operational accountability, and transparency. While much has been achieved in reforming and modernizing tax administrations, there is still no single effective approach to assessing the relative strengths and weaknesses of a tax administration,’’ the IMF survey reports.

To address the weak tax regime, the Fund said it’s partnering with other organisations on the TADAT. ‘’TADAT country assessments are expected to contribute to strengthened tax administration, enhanced revenue mobilisation, improved services to taxpayers, and better taxpayer compliance and discipline,’’ the IMF survey said.

The IMF said it has inaugurated a steering committee to oversee the further development and management of the new tool, and will be launched in 2015. ‘’The Technical Advisory Group will guide the development and application of TADAT. It includes tax administration experts from several countries, regional tax organisations, and the World Bank,’’ the IMF said.

According to Nemat Shafik, IMF’s deputy managing director, countries at all income levels often grapple with conflicting demands for both higher spending and lower taxes. “In these circumstances, measures to strengthen tax administration effectiveness are critical if the necessary fiscal space is to be found to improve public services, reduce poverty, and improve social outcomes, while collecting taxes fairly, efficiently, and transparently,’’ Shafik affirmed.

The Fund said TADAT’s standardised approach to diagnosing a tax administration will pinpoint the relative strengths and weaknesses of a country’s tax administration, providing a clear and objective assessment to all stakeholders.

The IMF said the TADAT framework has now been put to the test in two (2) pilot assessments, in Zambia (November 2013) and Norway (December 2013), with support and input from the Zambian and Norwegian authorities. ‘’The pilot assessments showed the framework to work well overall, but also highlighted the need for adjustments in some areas,’’ the IMF said.

Maimbo Nyanga, the director for research and planning of the Zambian revenue authority (ZRA), said the TADAT assessment was particularly useful to the ZRA in gaining a better understanding of reform needs and priorities: ‘’they faired favourably in certain areas where they were uncertain of their performance but were contemplating reforms, but had overlooked higher priority shortcomings—to which the ZRA now intends to devote more of its limited reform resources,’’ Nyanga said.

While Frode Lindseth of the Norwegian tax administration suggested that, while the TADAT assessment confirmed the strong performance of the Norwegian tax administration, it helped to identify room for improvement in a few key areas.

The IMF further affirmed that a draft TADAT field guide was prepared from the pilot experiences and is now being carefully reviewed by the technical advisory group and that several more pilot assessments will be undertaken in 2014 to further refine the tool by testing it in other countries.

It said by mid-2015, the TADAT Secretariat which will be located in the IMF and will launch the final version of the assessment tool. ‘’Once the TADAT framework is fully released, the Secretariat, together with the Steering Committee and the Technical Advisory Group, will ensure that TADAT assessments are carried out to the highest quality standards, promote the worldwide acceptance and application of the assessment framework, and revise the assessment framework periodically as needed,’’ the IMF said.