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ISSN 1684-9833 • Year 2 / No.1 /July 15, 2011

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The Executive Secretariat Informs Tax Policy and Controversy - Interview with the Executive Secretary, Mr. Márcio F. Verdi In this interview, the CIAT Executive Secretary, Mr. Márcio F. Verdi – shares his ideas regarding the work of the Inter-American Center of Tax Administrations (CIAT), which is focused on tax administration and particularly in sharing and collaboration among the 40 CIAT member countries for ensuring an ever greater exchange of best practices.

We invite you to CIATalk, the new space provided by CIAT. Read the posts, give your opinion and actively participate.

The Executive Secretariat Informs Tax Policy and Controversy - Interview with the Executive Secretary, Mr. Márcio F. Verdi Fifteenth IOTA General Assembly Working Group on Estimation of Effective Tax Burden on Investment Concluded its First Meeting The Tax Administrations Inform Argentina - Tax Collection in June 2011 Brazil – Implementation of New Individual Assistance System Begins Costa Rica Has Already Signed Twelve Tax Information Exchange Agreements Costa Rica Eliminated From Tax Haven List Nicaragua - DGI makes available the ElectronicTax teller for speeding up the filing of Tax Returns Panama - Deputy Minister De Lima explains Double Taxation Treaty benefits to Mexican and Panamanian entrepreneurs

Fifteenth IOTA General Assembly In keeping with the Cooperation Agreement signed by CIAT-IOTA at the CIAT General Assembly held in Brazil in 2006, the CIAT Executive Secretary, Mr. Márcio F. Verdi, in response to an invitation from the Intra-European Organization of Tax Administrations (IOTA), participated in its 15th General Assembly held on July 7 and 8, in the city of Nice, France, whose main theme was “Achieving More with Less”.

IOTA consists of 44 European member countries, of which 6 are also CIAT members, namely: Portugal, Spain, France, Italy, Netherlands and Czech Republic. The participants in this event included heads of tax administrations, representatives of international organizations and tax experts and researchers.

In line with the theme: “Achieving More with Less” the countries made presentations on new mechanisms dealing with collection and the increase of voluntary compliance, which may in turn result in increased efficiency and cost reduction.

Some of the mechanisms presented involved E-Governance, as well as techniques and application of information technology in the tax administrations. Also considered were benchmarking cases being implemented by IOTA itself, as well as the experiences of France, Azerbaijan and the United Kingdom.

Paraguay – Undersecretariat of Taxation intensifies controls on IMAGRO Taxpayers United States of America - IRS Technology Modernization Efforts Avoid Budget Cuts From House Committee New in the Web!...

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Pictured participants of the Fifteenth General Assembly of IOTA

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Rules Fourth CIAT Contest on Innovation in the Tax Administrations

Working Group on Estimation of Effective Tax Burden on Investment Concluded its First Meeting The CIAT Executive Secretariat headquarters in Panama City was the venue for the First Meeting of the Working Group on Estimation of the Effective Tax Burden on Investment held on July 4 through 6, and whose main objective is to develop a comparative study on the subject, which constitutes an initial pioneer effort for the Latin American countries.

CIAT is a public international organization which groups the tax administrations of 40 countries, (31 Amarican countries, 6 European countries, 2 African countries and one Asian country), for the purpose of providing an integral service for the modernization of those administrations, by promoting their evolution, social acceptance and consolidation through the exchange of knowledge, experiences and the rendering of specialized technical assistance.

Executive Council

The participants in the meeting were Marvin Cardoza from the General Directorate of Internal Taxes of the Dominican Republic, Rafael Fernández and Mario Pires from the National Customs and Tax Administration Integrated Service (SENIAT) of the Bolivarian Republic of Venezuela, Mauro Andino and Ximena Amoroso from the Internal Revenue Service (SRI) of Ecuador, César Silvero and Ricardo Benitez from the State Undersecretariat of Taxation (SET) of Paraguay and Irene Carrizo from the General Directorate of Revenues (DGI) of Panama, as well as the expert Economist, Ricardo Fenochietto, from the International Monetary Fund (IMF). The Executive Secretariat was represented by the Director of Studies and Training, María Raquel Ayala, the Tax Studies and Research Manager, Miguel Pecho and the Technical Assistant, Gaspar Maldonado. Through a videotaped statement, the CIAT Executive Secretary, Márcio Verdi, welcomed the participants.

The group reviewed the main methodologies existing for calculating effective tax burdens, in particular those measuring the marginal effective tax rate (METR) and the average effective tax rate (AETR) based on taxpayer returns or files as well as through National Accounts. The working group’s computerized platform was also created, for the purpose of registering all the discussions of the members as well as storing the pertinent bibliography on the subject matter under analysis.

The second face-to-face meeting of the working group has been scheduled for November 2011. Correspondent

Executive Secretariat The e-CIAT Newsletter is published and distributed electronically biweekly.

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Pictured are members of the First Meeting of Working Group on the Estimation of Effective Tax Burden on Investment. The meeting was held in the CIAT yield from 4 to July 6, 2011.

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The Tax Administrations Inform Argentina - Tax Collection in June 2011 The Executive Board of the International Monetary Fund (IMF) today elected the 55-year old Minister of Finance of The Secretary of Finance, Juan Carlos Pezoa, and the Federal Administrator of Public Revenues, Ricardo Echegaray, announced that in June, collection amounted to 48.670 million Pesos, with an increase of 30.5 % with respect to the same month in the previous year Carlos Alberto Sánchez Correspondent

Brazil – Implementation of New Individual Assistance System Begins The VIA (Spanish acronym) - or Integrated Assistance Vision System will allow the speedy, integrated and decisive assistance to the Individual Taxpayer.

The first phase of the project includes such services as Tax Situation /CND(Debt Payment Certificate) – Inquiry and Preparation of Individual and Corporate Reports; CPF(Registration of Individual Taxpayers) - Adjustment, Change and Inquiry; CNPJ (Registration of Corporations) - Consultation; Payments – Correction and Consultations; Debt Recovery – Individual Taxpayer Consultation and Adjustment.

Marco Aurelio Valadao Correspondent

Costa Rica Has Already Signed Twelve Tax Information Exchange Agreements By means of a press release, the Organization for Economic Cooperation and Development (OECD) reported that Costa Rica has been excluded from the list countries not cooperating with tax information exchange, while at the same time it has been added to the list of jurisdictions that have substantially implemented international tax transparency standards.

This information was disseminated following the country’s signing of eight agreements last week, to thus complete a total of twelve tax information exchange agreements.

These international instruments are part of the tax transparency commitments acquired by the country before the international community.

Maribel Zuñiga Cambronero Correspondent

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Nicaragua - DGI makes available the ElectronicTax teller for speeding up the filing of Tax Returns In order to provide greater ease of procedures carried out at the General Directorate of Revenues, this entity has set up the Electronic Tax teller (VET-Spanish acronym) which may be accessed when entering the Web page (www. dgi.gob.ni).

To use the Electronic Tax Teller, you must only enter the VET module in our Web page (www.dgi.gob.ni), click on the icon and immediately enter the data requested on the screen. Once activated by the Income Administration, you may use all the services offered by the VET …

Elias Javier Alvarez Meza Correspondent

Panama - Deputy Minister De Lima explains Double Taxation Treaty benefits to Mexican and Panamanian entrepreneurs Following the signing by our country of the twelfth tax agreement with France, the National Government’s strategy for protecting financial services and attracting foreign investment continues. Next week Panama will be out of the OECD’s gray list and a delegation from Israel is expected in late July for the second round of negotiations.

Paraguay – Undersecretariat of Taxation intensifies controls on IMAGRO Taxpayers The General Directorate of Tax Examination of the State Undersecretariat of Taxation (SET) of the Ministry of Finance is intensifying controls on taxpayers subject to the Income Tax on Agricultural and Livestock activities…. considering the results achieved through the previous application of procedures to several cases.

In this regard, undue use of credits in declared purchases has been determined, thereby directly affecting the tax assessment and payment.

Elizabeth Fernández de Corrales Correspondent

United States of America - IRS Technology Modernization Efforts Avoid Budget Cuts From House Committee The Internal Revenue Service’s plan to modernize tax administration computer systems largely avoided a $606 million budget cut by the House Appropriations Committee this week.

President Obama had requested $333 million for fiscal year 2012 for IRS’s Business System Modernization, a project to update the different technologies IRS uses. The committee allotted $330 million for the effort of the approved $11.5 billion total (122 DTR G-10, 6/24/11). President Obama had requested an increase in IRS appropriations from $12.1 billion in fiscal year 2011 to $13.3 billion for 2012.

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Although the modernization effort has mostly been viewed positively by oversight groups like the Government Accountability Office and the Treasury Inspector General for Tax Administration, TIGTA found that IRS databases were increasingly under attack (122 DTR G-2, 6/24/11). Therefore, the agency needs to improve its diligence, TIGTA recommended. IRS responded to the report by saying no taxpayer data was at risk.

RaĂşl Pertierra Correspondent

New in the Web!...

CIAT Thematic Tax Series June, 2011 . No.12

This thematic series includes Tax Administration / Human Resources in its No. 12 edition. The material gathered includes studies and papers prepared by technical officials for presentation either at the General Assemblies or Technical Conferences.

CIAT Thematic Bibliographic No. 5, June 2011

This thematic series presented in its edition No. 5 June 2011, the theme of International Cooperation/Exchange of Tax Information. References in this series are compiled studies and technical official for presentation either as a paper on the Assemblies or conducting technical conferences, monographs, research grants and articles published in Journal of Tax Administration among others.

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Welcome to Training Services Our activities are targeted mainly at implementing e-learning courses with the purpose of helping improve the professionalism of TA officials by the design and implementation of training programs to meet the needs and requirements of the TAs.

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Our documents Summary of Revenues for May 2011 General Directorate of Revenues Ministry of Economy and Finance

Current revenues are below the budgeted amount Tax revenues significantly exceed the previous year’s result.

Book Launch of Risk-Based Tax Audits: Approaches and Country Experiences World Bank Authors/Presenters: Munawer Khwaja and Rajul Aswathi July 28, 2011

The book examines the fundamental principles of risk-based audits and deals with the behavioral aspects of tax compliance, the institutional challenges they present, and provides analytical techniques used in risk-based audit strategies. It discusses implementation challenges in developing databases and data warehouses, and designing the IT infrastructure, which are critical for effective use of risk management techniques.

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A Brief History of Taxes Taxes were born as a way to get new revenue. They were implemented by the states to finance public needs. We can say that the first tax revenues were those obtained by the states through their rules or habits that later became law in ancient Rome...see document