Tax authorities should revisit their business continuity plans to ensure they continue to provide staff, taxpayer, and government support amid the coronavirus pandemic, a potential long-duration crisis, a key OECD body said.
In an April 7 reference document, the OECD Forum on Tax Administration (FTA) outlined measures tax administrations might consider adopting to ensure continued operations during the ongoing health emergency.
While many tax administrations may already have contingency plans in place to respond to one-off events, such as natural disasters and terrorist situations, they may not be prepared to deal with specific concerns arising from a pandemic, the document says. The report draws on input from members of the FTA, as well as members of the Intra-European Organization of Tax Administrations and the Inter-American Center of Tax Administrations.
Business continuity plans should include several objectives during a pandemic, including keeping staff and taxpayers safe by putting measures in place to clamp down on virus transmission, moving to remote working arrangements, and closing offices to all staff except essential employees, the document says.
Other goals include ensuring continuity in providing services to taxpayers and government over a long period of time, which means identifying and prioritizing critical, disruption-minimizing, and nonessential functions, the FTA said.
It’s also important to put in place “clear and timely decision-making processes in a rapidly changing environment and uncertain future states,” given the potentially volatile nature of pandemics, according to the report.
Ensuring ways to offer and deliver tax administration support to all kinds of taxpayers and implementing clear and frequent communications to inform the public and agency staff are also key considerations for tax administrations, the document says.
The document emphasizes that it is not providing recommendations but simply “food for thought” for tax administrations as they mull adjustments to their contingency plans to respond to the pandemic.
Specific measures that tax administrations could consider include establishing a pandemic decision-making committee with a “sufficiently resourced . . . secretariat function” to drive governance arrangements during the crisis. Administrations could also do some pandemic-specific scenario planning, perhaps aligned with their respective governments’ scenario planning, to help inform possible adjustments to the business continuity plan.
Measures to make remote working more efficient and effective could be taken into account as tax administrations work to reduce the risk of coronavirus transmission among their staff. Considerations include establishing good practice protocols and ensuring that staff have the right equipment to do their jobs, the document says.
Tax administrations should review procedures for identifying and responding to staff welfare issues and for ensuring solid communications with their staff, the FTA added.
“The nature of the COVID-19 pandemic is placing great strains on how tax administrations can carry out their core functions efficiently and safely. That they continue to do so is essential to navigating this crisis,” said Hans Christian Holte, director general of the Norwegian Tax Administration and FTA chair, in an April 7 release. “Bringing together the collective knowledge and experience of global tax administrations . . . is more important than ever in helping us to address the unprecedented challenges with which we are all confronted.”
Both the FTA and the OECD’s Centre for Tax Policy and Administration have been actively publishing reference documents and other papers outlining tax policy and administration responses to the COVID-19 pandemic.
Most recently, the FTA on March 31 published a reference document outlining measures that tax administrations have adopted to help taxpayers grapple with the economic fallout of the crisis. The document was listed as part of a COVID-19 tax response page on the Platform for Collaboration on Tax’s new integrated website, also unveiled March 31.
For its part, the OECD on March 21 set out emergency tax measures governments can adopt immediately in response to the pandemic. It also provided guidance April 3 for interpreting tax treaty rules to address cross-border issues arising from extraordinary measures that governments have adopted during the crisis.