Posted by the Revenue Administration Division of the IMF's Fiscal Affairs Department
Southeast Europe has been impacted significantly by the economic crisis with many countries facing the prospects of lower growth, lower absorption and imports and, therefore, quite likely, lower tax-to-GDP ratios over the medium term. The crisis has also given rise to a number of common tax compliance risks that hinders revenue collection in the region. Several of the countries have entered into (or are considering entering into) Fund programs and most are receiving (modest) amounts of FAD TA in tax administration.
In this context, the Fiscal Affairs Department (FAD) hosted a seminar (June 8-9, 2009) for the heads of tax agencies from 6 Southeast European countries and Hungary (Albania, Bosnia & Herzegovina, Hungary, Kosovo, Macedonia, Slovenia). During the seminar, FAD staff and the participating delegations made presentations (see links below) and exchanged views on the fiscal implications of the financial crisis, tax policy lessons from the crisis, and the revenue administration challenges that are emerging from the crisis. FAD also advised the seminar participants of its intention to design a new strategy for delivering tax administration TA to Southeast European countries. Subject to the availability of funding, the new strategy would consist of the following pillars: (1) a medium-reform program that is tailored to the specific needs of each tax agency; (2) a substantial increase in assistance that is delivered over a multi-year period; (3) a broad range of TA interventions, including regional advisors, short-term advisors, and headquarters’ missions; (4) close coordination with other TA agencies; and, (5) mobilization of external sources of TA funding.
At the conclusion of the seminar, participants endorsed the IMF's proposed TA strategy by signing a joint declaration that calls for FAD to implement it as soon as possible. To this end, FAD is engaged in ongoing discussions with a number of donor agencies—including both the Netherlands and Japanese authorities—to mobilize the funding required to implement the new TA strategy.
