|James Karanja is
a new entry this year
Taxation plays a crucial role in promoting sustainable
economic development. Research reveals that developing
countries, which are generally put at a disadvantage because of
weak capacities and corruption, collect tax revenues of only
15% (on average) of GDP. As a result of mounting pressure for a
global solution, the demand for a programme that works to
strengthen tax audit capacities, deepen international
co-operation and increase transparency and compliance in MNEs
led the OECD and the United Nations Development Programme
(UNDP) to launch a partnership for a joint initiative that
could level the playing field.
Originally thought up by Tax Justice Network Director John
Christensen, Tax Inspectors Without Borders (TIWB) has assisted
in the cumulative collection of $328 million in tax to date
– a lot of the progress of which will only become
evident in the years to come. TIWB brings in tax experts to
work side by side with local officials in developing and
emerging markets to tackle complex tax cases through hands-on
mentoring and advising. Elected as head of the initiative in
April 2016, James Karanja facilitates the tools and research
support required to deliver effective audit assistance
programmes for tax administrations.
The phrase 'give a man a fish, and you feed him for a day.
Teach a man to fish, and you feed him for a lifetime' seems
appropriate for Karanja's work. His influence on strengthening
a country's tax administration is immeasurable. Besides
increasing the knowledge and confidence of local tax
authorities, TIWB's expert guidance helps foster a culture of
compliance through more effective enforcement.
As of this year, there are 27 programmes taking place in 23
countries with seven more programmes planned. Karanja aims to
send a strong message to multinationals to change their
behaviour. "We think that effect would be our biggest
achievement as it would create more sustainable revenue for
years to come," he tells International Tax Review.
Most importantly, Karanja says the feedback he has been
receiving has resulted in a massive shift in confidence. "This
gives us the solid basis for the recognition that the
initiative is on track," he says.
Back in 2012, eight pilot projects raised more than $260
million in revenue for Albania, Colombia, Ghana, Kenya,
Senegal, Vietnam, Zambia and Zimbabwe. Since then, tax
programmes with several other countries have been launched
often in partnership with regional tax bodies, such as the
African Tax Administration Forum and the Inter-American Centre
for Tax Administration, with 100 more projects planned for
The results of the programme were instantaneously positive.
A pilot project between Kenya and Botswana is a significant
milestone for the initiative as a single audit of a Kenyan
subsidiary of a multinational group increased profit tax
revenues to $23.5 million for Kenya due to tax audit advice and
guidance in 2012. And in Colombia, tax revenues grew from $3.3
million in 2011 to $33.2 million in 2014 because of transfer
Karanja's election to the top job at the TIWB global
secretariat by the OECD was seen as important to cement the
Kenya Revenue Authority cooperation with the organisation,
which goes as far back as 2008 when Kenya commenced work on a
capacity-building engagement on transfer pricing. Since then,
the recognition of Kenya as a regional leader in transfer
pricing is due, in part, to a sustained effort by development
"TIWB is a mission initiative," Karanja said. It is about
bringing together partnerships and collaborative efforts
between regional organisations and international partners like
the World Bank Group and the Commonwealth Association of Tax
Administrations, to name a couple. For Karanja, the most
exciting part of TIWB has been the partnerships. "You cannot
reach every corner of the world by yourself. If it weren't for
partnerships and close collaboration with other development
partners, TIWB wouldn't have achieved what it has today,"
As a final sentiment to this year's progress, Karanja wishes
to say that: "Like our name suggests, our goal is to reach
every corner of the world and ensure that multinational
enterprises play their part in every country they operate in to
provide the resources that are required to finance sustainable
and equitable development."
"This is the broad message: we are open for business, we're
up and running, we have resources at our disposal and are
available to each and every region. The situation has changed.
Developing countries are no longer helpless."