Bhutan launches the second Tax Inspectors Without Borders Programme aimed at enhancing domestic resources through a strengthened capacity in tax administration.
Harnessing potential of taxation to boost domestic revenue
September 7, 2023
7 September 2023: The Bhutanese Finance Minister Lyonpo Namgay Tshering and Finance Minister of Poland, Magdalena Rzeckowska, today launched the Tax Inspectors Without Borders (TIWB) Programme in Bhutan, a collaboration between the Royal Government of Bhutan, the Government of Poland, UNDP, TIWB and the Organisation for Economic Co-operation and Development (OECD).
This is the second such programme in Bhutan. The first TIWB Programme was supported by India's Central Board of Direct Taxes, while the new one is supported by Poland's Centre for Tax Solidarity, Ministry of Finance.
The virtual launch was attended by Mr. Sonam Jamtsho, Director General, Department of Revenue and Customs (DRC), Mr. Ben Dickinson, Head of the Global Relations and Development Division, Centre for Tax Policy and Administration, OECD, Ms. Rusudan Kemularia, Head of the TIWB Secretariat and Mr. Mohammad Younus, UNDP Resident Representatives. Other officials from the DRC, TIWB Secretariat and UNDP were also present.
The TIWB Programme will help build the capacity of the Bhutanese Tax officials in the area of transfer pricing and international taxation. The Government of Poland, as the partner country, will deploy four tax experts to Bhutan to support the DRC.
Lyonpo Namgay Tshering said the deployment of these four tax experts represents more than just a technical assistance program. “It is a symbol of friendship, solidarity, and a shared vision for a more prosperous and equitable world. The knowledge and experience they bring to the Bhutanese tax administration will make a significant difference in building the capacities of our tax officers and strengthen the foundations of Bhutan’s economic growth.”
Minister Rzeckowska said the Government of Poland is honored to contribute to the development of Bhutan's tax administration. “We look forward to witnessing the positive impact of our joint efforts. Together, we can build a more transparent, efficient, and equitable tax system that fosters sustainable economic growth and prosperity for all.”
The capacity building component includes onsite support in conducting tax assessment of industry-specific sectors, such as hydropower, financial institutions, construction and Foreign Direct Investment (FDIs) entities.
The tax auditing skills, with a focus on international taxation and transfer pricing, of the tax inspectors will be also enhanced. This particular training will cover topics, such as identification of transfer pricing risks, understanding international tax laws and regulations, and effectively conducting audits in cross-border transactions.
A guideline for assessing e-commerce and taxing virtual assets will be developed.
UNDP Resident Representative Mohammad Younus said this collaboration exemplifies our collective commitment towards harnessing the potential of taxation for the betterment of Bhutan and its people. “It will pave the way for strengthened revenue administration, increased domestic resource mobilization, and ultimately contribute towards the achievement of the SDGs in the last decade of action. UNDP remains committed to supporting Bhutan's efforts to access new financing opportunities and transition to a more resilient and sustainable economy post-COVID-19 pandemic.”
The TIWB is a joint initiative of the OECD and UNDP supporting countries in building their tax audit capacity. It complements the broader efforts of the international community to strengthen co-operation on tax matters and contribute towards domestic resource mobilization efforts of developing countries.
TIWB initiatives have proved to be a remarkable success in many countries. As of February 2023, TIWB had contributed USD 2.07 billion in added tax collected and USD 4.94 billion in additional tax assessed for the participating developing countries since its inception in 2015.
“The TIWB Programme aims to deliver tangible results in Bhutan too,” said the Head of TIWB Secretariat, Rusudan Kemularia.
The Head of Global Relations and Development Division, Centre for Tax Policy and Administration, OECD, Ben Dickinson, said the TIWB initiative continues to demonstrate how partnerships and collaboration in tax matters are an effective capacity building tool for developing countries. "We are confident that this programme will prove to be a key instrument for improved tax administration and help foster tax compliance and mobilise domestic revenues in Bhutan."
On sidelines of the TIWB Programme launch, the DRC and UNDP launched a new tax advocacy, focusing on the Property Tax of Bhutan. Two advocacy videos—one on the revised property tax and the other on the newly developed property tax calculator—were launched.
The property tax advocacy builds on the earlier joint advocacy “Taxes Matter” of DRC and UNDP that highlighted the importance of taxation and its contribution to nation building.
For more information, please contact:
Ms. Dechen Wangmo, Communications Analyst, UNDP Bhutan, Email: firstname.lastname@example.org