Early restoration planning by tax administrations key to support individual and business taxpayers towards economic recovery from COVID-19 pandemic

Recovery from the profound impacts of the COVID-19 pandemic on people's lives, jobs, businesses and the wider economy is likely to be lengthy, challenging and multifaceted, with tax administrations playing a critical role in restoration planning, according to a new OECD report.

Tax Administration Responses to COVID-19: Recovery Period Planning, a report prepared by the OECD's Forum on Tax Administration (FTA) in co-operation with the Intra-European Organisation of Tax Administrations (IOTA) and the Inter-American Center of Tax Administrations (CIAT), outlines how tax administrations can prepare for the potentially prolonged, uncertain and complex recovery period from the COVID-19 crisis. The report highlights that even during the immediate crisis period, there will be significant benefit from early business restoration planning to help identify the main challenges and opportunities for both tax administrations and taxpayers, and to take early preparatory actions.

In undertaking business restoration planning, tax administrations will need to take into account the distinguishing features of the COVID-19 pandemic which, unlike other crises, are likely to persist during the recovery period. In particular, the continued risks to health, including from further outbreaks; the impacts on staff and administration systems as a result of the need for continuing adjustments; and the potential length and volatility of the recovery period given the depth and scale of the economic shock.

An additional report published today, Tax Administration: Privacy, Disclosure and Fraud Risks Related to COVID-19, highlights the increased security risks and greater opportunities for errors, misconduct and fraud in the current environment, including as a result of increasing remote working. The report provides examples of these high-level risks and identifies some mitigation actions that tax administrations may wish to take.

The publication of these documents complements other COVID-19 related actions being taken by the FTA including through:

• Bringing together virtually officials from across the global FTA membership to discuss crisis management, business continuity and recovery period considerations.
• Launching work to identify priorities for future FTA work, including supporting further digitalisation of tax administrations and options for new ways of working post-crisis.
• Working collaboratively to help address difficulties affecting taxpayers in cross-border situations, complementing the work already undertaken by the OECD Secretariat on addressing a number of tax treaty related issues through recently issued guidance and recommendations.

"While some countries may be slowly emerging from the crisis phase of the pandemic, major challenges remain for resuming normal operations in what will be a difficult, uncertain and prolonged period of recovery", said Hans Christian Holte, Chair of the FTA. "None of us has faced such a situation before and continued close co-operation between tax administrations will remain critical both in supporting the recovery and in considering how we can emerge stronger and better able to serve our customers".

"Early planning for the recovery period from COVID-19 is critical given the scale of the challenges and risks that lie ahead", added Pascal Saint-Amans, the Director of the OECD Centre for Tax Policy and Administration. "The collaborative work being undertaken by the FTA, CIAT and IOTA, including outreach to developing countries, is vitally important in helping to mitigate those risks as well as identify opportunities to increase the effectiveness and efficiency of tax administration in a post-crisis world."

For more information on the work of the Forum on Tax Administration in response to COVID-19, visit http://oe.cd/fta.

Journalists are invited to contact Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration (+33 1 45 24 91 08) or Achim Pross, Head of the International Co-operation and Tax Administration Division (+33 1 4524 9892).

Source : OECD