1. Speech by Dr. Marcus Desax, President of IFA - International ...
1. Speech by Dr. Marcus Desax, President of IFA - International ...
1. Speech by Dr. Marcus Desax, President of IFA - International ...
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highly deserving <strong>IFA</strong> members are like large trees in a forest: while they provide for shade<br />
and protection against rain, storm and snow, they do not allow new trees to grow<br />
underneath.<br />
After YIN, the first priority <strong>of</strong> my Presidency, let me address the second one: the<br />
relationship <strong>of</strong> tax authorities, taxpayers and tax advisers.<br />
In July 2009, your Secretary General and <strong>President</strong> were invited <strong>by</strong> the Intra-European<br />
Organisation <strong>of</strong> Tax Administrations to its 13th General Assembly. IOTA is a non-pr<strong>of</strong>it<br />
intergovernmental organization, which provides a forum to assist its 43 members in<br />
Europe to improve tax administration. At this occasion, <strong>IFA</strong> and IOTA signed a<br />
memorandum <strong>of</strong> understanding for the future cooperation <strong>of</strong> our two organisations.<br />
At this meeting, the Swedish Tax Agency gave a presentation on the relationship between<br />
the tax gap, on the one hand, and the perception <strong>of</strong> the tax <strong>of</strong>ficials <strong>by</strong> taxpayers, on the<br />
other hand. The tax gap is the difference between the amount <strong>of</strong> tax that would have been<br />
levied if all those liable to the tax reported all their activities and transactions correctly and<br />
the amount <strong>of</strong> tax actually paid.<br />
The Swedish Tax Agency had undertaken two studies: the one on the tax gap in Sweden<br />
and another one on the way Swedish citizens and businesses perceive the attitude that<br />
the tax <strong>of</strong>ficials have towards them. The Tax Agency wrote:<br />
We use risk models, exchange <strong>of</strong> data, selections systems to target<br />
taxpayers for audit activities; but it’s not enough: we need more<br />
knowledge about what affects behaviour and what increases<br />
voluntary compliance.<br />
According to the Swedish Tax Agency, one <strong>of</strong> the reasons for which people pay their<br />
taxes and refrain from evasion is the trust in the tax <strong>of</strong>ficials. In their study, one <strong>of</strong> the<br />
questions was: “Would you evade tax if you had the possibility?” Out <strong>of</strong> the people who<br />
said that they trusted the Tax Agency, 12% answered yes, they would evade the tax, if<br />
they had the possibility. In contrast, in the group <strong>of</strong> people who said that they did not have<br />
trust in the Tax Agency, 27% said that they would take the opportunity and avoid the tax if<br />
they only could.<br />
The trust in the Swedish Tax Agency was found to be based on the way the tax <strong>of</strong>ficials<br />
treat their taxpayer: If the attitude is:<br />
helpful,<br />
listening and cooperative, and<br />
based on the assumption that most people are honest,<br />
the impact <strong>of</strong> the trust in the Tax Agency is positive.<br />
However, the impact on the trust is negative, if the position <strong>of</strong> the tax <strong>of</strong>ficial is:<br />
indifferent, serious, going <strong>by</strong> the rules,<br />
insensitive, superior, exercising power and accusatory, or<br />
even worse, if it is based on the belief that most people are dishonest.<br />
The Swedish Tax Agency is not the first one to claim that the relationship between tax<br />
authorities, taxpayers and tax advisers should be improved. In January 2008, the OECD<br />
published its “Study into the Role <strong>of</strong> Tax Intermediaries”, in May 2009 “Building<br />
Transparent Tax Compliance <strong>by</strong> Banks” and “Engaging with High Net Worth Individuals on<br />
Tax Compliance”. The OECD proposed to build on an “enhanced relationship” between all