Revenue administration and public financial management

REVENUE ADMINISTRATION

Administration of revenues

The revenue authorities of EU Member States are under pressure to deliver more with less. At the same time, they must ensure an effective deterrent for non-compliance. The Commission helps revenue authorities improve their core business functions and managerial processes. By making these functions and processes more efficient and effective, revenue authorities can ensure sustainable revenues for the government.

EXAMPLES OF SUPPORT

• Improving taxpayer services.
• Strengthening dispute resolution mechanisms.
• Modernising debt collection processes, operations and tools.
• Developing and implementing strategic planning and performance management frameworks.
• Fostering internal control, organisational risk management and information security.
• Enhancing business processes and project and change management.

Tax compliance

Enhancing tax compliance is a key component of effective resource mobilisation. Revenue authorities have been developing new approaches to increase voluntary compliance, manage non-compliance, minimise compliance costs and enhance overall trust in the tax system. The Commission provides technical support for the design and implementation of compliance management.

EXAMPLES OF SUPPORT

• Improving compliance risk management and strategies.
• Setting up cooperative compliance programmes.
• Enabling the implementation of behavioural approaches.
• Developing communication and awareness campaigns.

Aggressive tax planning, tax fraud and evasion

Curbing aggressive tax planning, tax fraud and tax evasion is an EU priority. It is essential for safeguarding the mobilisation of revenue, ensuring a fair sharing of the tax burden and avoiding distortion of competition. The Commission offers support for the setting up of mechanisms to avoid erosion of the tax base through cross-border profit shifting. Support is also provided for the design and implementation of anti-fraud strategies.

EXAMPLES OF SUPPORT

• Building capacity for the implementation of the EU anti-tax avoidance package and base erosion and profit shifting actions.
• Designing and implementing anti-fraud strategies.
• Tackling missing trader fraud.
• Supporting administrative cooperation and exchange of information.

Digitalisation of revenue authorities

The rapid growth of information and communications technologies (ICT) imposes challenges for revenue authorities in keeping up with the latest developments and trends. Digitalisation is essential for providing better taxpayer services, dealing with big data and detecting risks. It is also important for making revenue collection more effective and efficient. The Commission provides technical support for the design and implementation of ICT reforms in revenue authorities.

EXAMPLES OF SUPPORT

• Developing ICT strategies and action plans.
• Strengthening data governance and management.
• Drafting business case and functional specifications.
• Identifying a funding framework for ICT investments.

Customs union

The Customs Union is important for protecting the EU’s external borders and for safeguarding the fair and transparent collection of customs duties and other relevant taxes, such as excise and value-added tax. At the same time, it ensures a smooth flow of international trade across EU borders. The Commission provides technical support to national authorities to help design and implement customs reforms.

EXAMPLES OF SUPPORT

• Designing strategies for digital transformation.
• Mapping digital customs solutions for the import and export of e-commerce consignments.
• Modernising risk management tools.
• Designing anti-smuggling strategies and awareness campaigns.

Tax policy

Good tax policies meet revenue objectives and ensure that the tax system supports equitable, inclusive and sustainable growth. At the same time, they offer legal certainty and minimise administrative burden. The Commission provides technical support for designing and drafting tax legislation and analysing the costs and benefits of changes in tax policies. The Commission can also help develop methodologies for revenue analysis, simulation and forecasting.

EXAMPLES OF SUPPORT

• Building capacity for microsimulations and modelling.
• Assessing tax policy and legislation.
• Designing green taxation reforms.
• Developing methodologies for estimating the tax gap.

PUBLIC FINANCIAL MANAGEMENT

Expenditure policy

At a time when governments have to deal with increased pressure regarding public spending, it is even more crucial to improve the quality of public finances. Solid public finances ensure that expenditure policy supports sustainable economic growth and promotes equity. Improved efficiency and effectiveness of public spending helps alleviate budget constraints. The Commission provides support for designing, carrying out and institutionalising spending reviews. It also supports EU Member States in improving practices and capacity in public expenditure management, monitoring and evaluation.

EXAMPLES OF SUPPORT

• Supporting the design and conduct of spending reviews.
• Providing guidance for better aligning spending reviews with the budgetary process and with other public financing management tools.
• Building capacity and improving practices in public expenditure evaluation.

Budget preparation and implementation

To bring tangible benefits to their citizens, governments need to carefully plan their budgets and implement them efficiently and in a timely manner. Budget preparation is crucial for achieving a resource allocation that reflects expenditure policy priorities. An efficient system of budget execution ensures that public funds are spent properly. The Commission helps national authorities improve the budgetary process. The technical support focuses on strengthening performance budgeting and the medium-term budget framework. The Commission also helps EU Member States improve budget execution practices.

EXAMPLES OF SUPPORT

• Strengthening the performance budgeting framework.
• Enhancing green, gender and other priority budgeting frameworks.
• Strengthening the medium-term budget framework.
• Improving budget execution practices.

Public sector accounting and statistics

Comprehensive, reliable and timely accounting and reporting practices are essential for high quality statistics. These help governments improve their understanding of their fiscal position and prospects. They also provide legislators, markets and citizens with the information they need to make efficient financial decisions. The Commission helps EU Member States modernise their fiscal reporting systems. It provides technical support for the design and implementation of accrual accounting reforms in line with European Public Sector Accounting Standards and for improving the quality of national accounts.

EXAMPLES OF SUPPORT

• Supporting the design and implementation of accrual accounting reforms.
• Improving the quality of national accounts.

Macrofiscal framework

A sound macrofiscal framework allows public administrations to set sustainable fiscal targets, determine policy choices, and prepare realistic expenditure projections. The Commission helps national authorities strengthen their macrofiscal framework. It provides technical support to improve the design and implementation of fiscal rules, enhance the quality of macro-fiscal forecasts, develop fiscal risk management frameworks and evaluate local government finances.

EXAMPLES OF SUPPORT

• Building capacity for fiscal risk assessment and management.
• Improving the quality of macroeconomic and fiscal forecasts.
• Supporting the design and implementation of expenditure rules.
• Improving practices in the evaluation of local government public expenditure.

Public finance oversight

Independent fiscal institutions and supreme audit institutions are crucial for promoting fiscal responsibility and improving the quality of the fiscal policy debate. They do so by providing independent scrutiny of fiscal policies, plans, and performance. The Commission helps these institutions strengthen their institutional and technical capacities and improve the set of instruments available to carry out their mandate.

EXAMPLES OF SUPPORT

• Enhancing the institutional and technical capacities of independent fiscal institutions.
• Strengthening the capacities of supreme audit institutions.

Debt and cash management

Effective debt and cash management practices ensure that expenditures are smoothly financed during the year, that policy objectives are met and that the government’s financing needs and obligations are met at the lowest possible cost. The Commission helps national authorities improve the efficiency and effectiveness of their cash and debt management operations.

EXAMPLES OF SUPPORT

• Optimising cash management processes and tools.
• Strengthening debt management operations.