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ISSN 1684-9833 • Year 3 / No.13 /July 13, 2012

The Executive Secretariat Informs The Executive Secretariat Informs Fifth CIAT Contest on Innovation in the Tax Administrations 5th Meeting of the Permanent Committee on Ethics and Tax Administration Visit of the CIAT Director of Technical Assistance and ICT and the Head of the Spanish Mission to the SIN of Bolivia The Tax Administrations Inform Argentina - Bolivia exchange information to fight contraband and commercial fraud Bolivia - The SIN raised Bs 19.071 million during the first half of 2012, 31% more than 2011 Brazil - The Federal Revenue Service will have a laboratory against money laundry Colombia - The DIAN trains its Auditors in the topic of Transfer Pricing with the OECD Support Italy - New Commander of the Guardia di Finanza in Italy Panama – 2012 Preliminary Results Report: Month of June and first half Kenya - KRA Scoops Public Service Innovation Award Paraguay - Javier Contreras, takes over as Deputy Minister of the SET Peru - The Council of Directors of the SUNAT was installed Peru - Central consultations in the SUNAT responded to over a million calls from taxpayers and citizens Dominican Republic – Internal Revenue held the International Seminar “The DGII 2004/2012: X-ray of an institutional transformation IBFD News Post of the Month Other Documents

Fifth CIAT Contest on Innovation in the Tax Administrations The Inter-American Center of Tax Administrations announces the “Fifth CIAT Contest on Innovation in the Tax Administrations”. Entries may be sent until December 15, 2012.

The purpose of this annual contest is to recognize and promote improvement and creativity in the tax administrations.

It constitutes concrete evidence of the effect of innovation on their performance that ultimately results in greater public trust.

By highlighting exemplary ways of innovative performance of the tax administrations, the Program acts as a catalyst in continuous improvement for satisfying the constant demand faced by tax administrations of finding new and better ways for achieving their institutional objectives.

There will be awards for the best three innovations. The implementation of new practices in the tax administrations, especially after they reach greater levels of maturity, take into account varied aspects and frequently these practices contribute to improve efficiency, effectiveness and transparency in management.

To this end, innovation will be defined as a new process that may change or improve an existing one, and may cause a significant impact on the tax administration. An innovation may be large or small, originating a totally new process. Or simply, implement changes in an already established process, provided this change may have a significant impact that may be measured in qualitative or quantitative terms.

The Contest is only open to CIAT member countries National Tax Administrations.

The 2013 awards will be announced and presented at the General Assembly in Buenos Aires, Argentina.

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5th Meeting of the Permanent Committee on Ethics and Tax Administration The 5th Meeting of the Permanent Committee on Ethics and Tax Administration held in Panama City on July 9 and 10 was inaugurated with the opening statement by Dr. Márcio F. Verdi, CIAT Executive Secretary. The meeting was chaired by Ms. Kerrie Lawn, Assistant Director of Values and Ethics from the Canada Revenue Agency and Ms. María Raquel Ayala Doval, Director of Training and Human Talent Development of the CIAT Executive Secretariat.

Present in the meeting were representatives from Brazil, Canada, Colombia, Ecuador, Spain, France, Kenya, New Zealand, The Netherlands, Panama, Dominican Republic, Sweden and Uruguay, who discussed issues dealing with ethics and best practices developed in their tax administrations.

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.

This committee is currently concluding the Integrity Matrix, which is based on CIAT’s minimum necessary attributes for a sound and effective tax administration. It was highlighted as one of the most useful results for the countries, that will shortly be made available to all the users of My CIAT, as a very useful tool for consulting, analyzing and implementing the best practices followed in each country. Efforts will continue to be devoted to other relevant aspects of Ethics that are of interest, current importance and application in the tax administrations.

As noted by Dr. Verdi in his closing remarks, the next meeting to be held in 2013 will be considering important strategic documents that will certainly reinforce and even further strengthen the work of CIAT in this very important and key area for the success of any organization.

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

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Participants “5th Meeting of the Permanent Committee on Ethics and Tax Administration”.

Contact us: CIAT Executive Secretariat / e-CIAT Newsletter P.O. Box 0834-02129 Panama, Republic of Panama.

Phone (507) 265-2766 / 265-5994 Fax: (507) 264-4926 E mail:ciat@ciat.org Web Site: http://www.ciat.org

View of the participants in the Meeting.

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Visit of the CIAT Director of Technical Assistance and ICT and the Head of the Spanish Mission to the SIN of Bolivia In a recent visit of the CIAT Director of Technical Assistance and ICT, Mr. Raul Zambrano and the Head of the Spanish Mission, Luis Cremades to the SIN of Bolivia, they received documents supporting the Tax Culture campaign, being conducted by the SIN nationwide.

This tax promotional and educational material is accompanied by the presentation of Don Fisco, Cantuta and Patuju who are the main actors of the Creating a Tax Culture Tax Program (PCCT).

Cantuta and Patuju are the national flowers of Bolivia.

The Tax Administrations Inform Argentina - Bolivia exchange information to fight contraband and commercial fraud Argentina Customs and the Customs Administration of Bolivia began to exchange information on-line to monitor the traceability of foreign trade operations between different customs administrations, trade possible commercial frauds, as well as verify the truth or accuracy of the declared value, the tariff classification and origin of the goods.

The platform that enables the exchange of information is the same as the one already effectively used in Argentina, Uruguay, Brazil and Paraguay. This tool is known as Exchange of Customs Registry Information System (INDIRA).

Carlos Alberto SĂĄnchez Correspondent

Bolivia - The SIN raised Bs 19.071 million during the first half of 2012, 31% more than 2011 The economic performance of the country, the facilities granted to taxpayers to comply with tax obligations, the controls performed on strategic taxpayers, the spread of massive campaigns, the implementation of Creating Tax Culture Program, among others allowed the National Tax Service (SIN) collect 19.071 million Bolivians during the first half of this year, confirming an absolute growth of 31% over the same period in 2011.

Juana Patricia JimĂŠnez Correspondent

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Brazil - The Federal Revenue Service will have a laboratory against money laundry The National Secretariat of Justice of the Ministry of Justice and the Secretariat of the Federal Revenue Service signed on Wednesday 6/27, an agreement for the creation of a laboratory with technology against money-laundering in the Federal Revenue Service.

The Lab-LD is a technology that helps to compile information from money laundry crimes. Tools that allows analyzing large volumes of banking and tax information.

The Laboratory-LD Service of Internal Taxes will be the sixteenth network unit. With headquarters in the district of Higienopolis in the capital of Sao Paulo, the laboratory will work nationwide.

The Department for asset recovery and International Legal Cooperation - DRCI of the Ministry of Justice is the agency responsible for the initiative and the acquisition of equipment and staff training. The investment in this unit, is R$ 887 thousand in 2012 and R$ 516 thousand in 2013, it will be financed by the Ministry of Justice.

Since 2009, the Lab network analyzed about 600 cases of money laundering and corruption, identified around R $ 11 billion illicit assets.

For the National Secretary of Justice, Paulo Abraao, ‘With this laboratory, the Federal Revenue has a privileged instrument to further increase the excellence of its work.”

The Secretary of the Federal Revenue, Carlos Alberto Barreto, said that the initiative to create a laboratory in collaboration with the MJ is very significant, since the fight against organized crime and money laundering are activities that relate to the powers of the Federal Revenue.

Flávio Antonio Araújo Correspondent

Colombia - The DIAN trains its Auditors in the topic of Transfer Pricing with the OECD Support On April 17 and 19, 2012, was held a seminar - workshop at the School of Tax and Customs of the Directorate of National Taxes and Customs DIAN on transfer pricing to strengthen skills and capacities for monitoring, auditing and sharing information for the auditors’ work to be technical and ensure the reasonableness of the audit.

It was attended by thirty (30) officials of the Institution from the International Control Department and from the Tax Sectional and the Large Taxpayers Directorates of Bogota , as well as the Legal Department, who shared their experiences on transfer pricing with Mr. Lee Corrick, senior advisor of the Center for Tax Policy and Administration (CTPA) of the OECD (Organization for Economic Cooperation and Development).

The event is part of the program implementation of the Working Group on Tax and Development (Task Force on Tax and Development) established by the Fiscal Affairs Committee (CFA) and the Development Assistance Committee (DAC) of OECD, which is responsible for supporting developing countries in controlling the mobilization of national resources to improve the capacity of tax authorities and collection performance, and it is develop under the bilateral agreement that Colombia has with the OECD in partnership with organizations such as the World Bank (WB) and the European Commission, among others.

Patricia Parada Castro Correspondent

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Italy - New Commander of the Guardia di Finanza in Italy The celebration of 238 anniversary of the Guardia di Finanza was held on June 21 in L’Aquila.

The event was attended by the President of the Republic, Giorgio Napolitano, the Prime Minister and Minister of Economy and Finance, Hon. Senator Mario Monti. Representatives from the highest political, civil, military and religious authorities also attended, as well as officers, inspectors, superintendents and active and retired agents.

During the event, the ceremony to replace the post of Commander of the Guardia di Finanza took place, between General Nino Di Paolo, who served for two years in this work, and General Saverio Capolupo.

Ceremony

During his career, General Saverio Capolupo has been in charge of different operating units, has been Head of the Operations Department of the Directorate-General and Chief of the prestigious School of Tax Police which is the most prestigious training center of the Guard di Finanza.

Kenya - KRA Scoops Public Service Innovation Award RADDEx, the electronic communication system that was developed in 2006 to enable exchange of data between the Customs administrations in the EAC partner states won the second runner up award during the Public Service Innovation Awards ceremony held last week at the Kenyatta International Conference Centre.

The ceremony was held concurrently with innovation exhibition at the same venue. KRA showcased both the Electronic Cargo Tracking System and RADDEx. While touring the KRA stand, the Minister State for Public Service Hon. Dalmas Otieno EGH appreciated the leading role KRA has taken in embracing information technology. ‘Everything revolves around tax administration and if KRA leads the way, taxpayers will be motivated to follow suit,’ he concluded. He was accompanied by the Permanent Secretary in the Ministry Mr. Titus Ndambuki among other dignitaries. He was taken round the KRA stand by the Head of Marketing and Communication Kennedy Onyonyi.

Pancracious Nyagah Correspondent

Panama – 2012 Preliminary Results Report: Month of June and first half The Current Revenue during June totaled B/.528.7 million, exceeding by B /. 6.7 million (1.3%) the budgeted amount and surpassing in B /. 21.6 million (4.3%) the collection of June 2011.

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Paraguay - Javier Contreras, takes over as Deputy Minister of the SET Last June 28th., took over as Deputy Minister of the Ministry of Taxation (SET) of the Ministry of Finance Mr. Javier Contreras, replacing Mr. Geronimo Bellassai.

Mr. Javier Contreras has a Masters in Comparative European Law from the University Carlos III of Madrid, Spain, is a Lawyer from the Faculty of Law and Social Sciences, National University of Asuncion.

Sr. Javier Contreras Vice-minister of Taxation

He was the National Customs Director of Paraguay (December 2009 - April 2011) and Criminal Tax Agent member of the Fiscal Unit specializing in Economic Crimes. He teaches at the Faculty of Law and Social Sciences, National University of Asuncion.

Peru - The Council of Directors of the SUNAT was installed In a ceremony attended by the Minister of Economy Luis Castilla Rubio and three former National Superintendents, SUNAT installed its Council of Director, this working team will be responsible for implementing the projects of the Law of Strengthening (Law No. 29816) of the institution, in force since December 2011, approving their performance management reports and operational regulations.

The Council is composed of four members. Chaired by the head of the SUNAT, Tania Quispe Mansilla and Marco Camacho Sandoval, representing the Ministry of Economy and Finance (MEF), Fernando Vasquez Zanabria, representing the Central Reserve Bank, and Daniel Romero Sanchez, National Superintendent Deputy Internal Administration of the SUNAT. Clara Urteaga Correspondent

Peru - Central consultations in the SUNAT responded to over a million calls from taxpayers and citizens In the first five months of the year, more than one million calls nationwide have been addressed by the Central Call Center for consultations of the SUNAT which has allowed taxpayers and citizens receive guidance on information about the various formalities and tax obligations that they must comply with.

This represents an increase of 60% over the same period last year, sowing that this service provided by the SUNAT has become a valuable reference tool throughout the country.

Clara Urteaga Correspondent

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Dominican Republic – Internal Revenue held the International Seminar “The DGII 2004/2012: X-ray of an institutional transformation The Directorate General of Internal Revenue formally initiated activities to celebrate its fifteenth anniversary with the VI International Seminar “The DGII 2004/2012: X-ray of an Institutional Transformation,” held last weekend with the participation of 20 journalists and opinion leaders of the mainstream media in the country.

Held in the modern facilities at the Hotel RIU Bavaro Palace, the Director General of the DGII, Juan Hernandez, opened the event last Friday night with a dinner-conference entitled “The 5 Milestones that Explain the Transformation of the DGII.” Nieves Vargas Collado Correspondent

IBFD News International Bureau of Fiscal Documentation (IBFD) Cooperation-CIAT - IBFD

This section includes a selection of the IBFD news about aspects of tax policies and tax administration. This information is available on the CIAT website and in Fridays Tax News alert.

Post of the Month July 01, 2012

Myths, legends, traditions and other things like those (viii) Written by Raúl Zambrano In a previous Post, the ten minutes one, we mentioned the possibility of offering drafts or pre-filled fields of returns to taxpayers as a strategy to simplify the action of the administration to taxpayers.

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Other Documents “Legislación y Práctica de Precios de Transferencia en República Dominicana” Legislation and Transfer Pricing Practice in Dominican Republic Directorate General of Internal Revenue July 2012 (Available in Spanish)

Dominican Republic has shown substantial progress in relation to the practice and legislation on transfer pricing. It is based on the application of the general guidelines of the Tax Code since 2006 and on more specific legislation adapted to international standards in 2011. These provisions together with other powers of the Administration included in the Code, provide the necessary legal certainty to taxpayers and the Tax Administration.

“Boletin Educación y Cultura Fiscal” Newsletter Education and Tax Culture Ministerio de Hacienda. Costa Rica Newsletter No.62012 June

This edition covers the following topics: • • • • • •

Training of Education teachers for Everyday Life.

Participation in the Technical Fair at the Professional Technical School Dos Cercas.

Training to students of accounting of Professional Technical Schools.

Lecture “ABC of Taxes” aimed at Professional Schools and SMEs. Training on tax matters to the Officials of the Financial Accounting Department of the judiciary.

Training of the Children’s Museum guides.

Improving the Performance of the Property Taxin Latin America Claudia M. de Cesare Policy Focus Report Lincoln Institute of Land Policy 2012

Property taxation is one of the core topics of the Lincoln Institute of Land Policy and is of centralimportance in Latin America, where the property tax remains the best way to support localpublic expenditures. While there is great diversity in property tax administration among LatinAmerican countries, most have a poor performance record in terms of efficient tax collection.... see document