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Efficient and Sustainable Tax Administration of Kosovo

2010-2013 || U.S. Agency for International Development

Abstract

Deloitte is supporting the Tax Administration of Kosovo (TAK) in its efforts to bring non-compliant taxpayers into the formal economy and into compliance with tax laws and regulations. Improving Kosovo’s tax structure and laws can create an environment intended to foster economic growth and promote both domestic and foreign investment. Focused on sustainable reforms, the project team is strengthening Kosovo’s capacity to administer its responsibilities. Building human capacity, integrating updated systems, and improving leadership effectiveness are imperative.

The Challenge

The effectiveness and sustainability of TAK is severely impeded by the lack of professional, transparent and effective service to the taxpayer community. Taxpayers do not understand their taxpaying obligations, and fair and uniform application and enforcement of tax laws to collect revenues for the government budget do not exist. Improving the performance of TAK is critical to the fiscal stability of Kosovo, as well as to creating an environment supportive of increasing economic activity.

How We Helped

While much progress has been made by TAK, deficiencies in core areas of tax administration require ongoing technical assistance and capacity building support. Deloitte has two main objectives in assisting Kosovo in developing TAK. The first goal is to help Kosovo in its efforts to strengthen the capacity of TAK to administer its responsibilities. This is being achieved by using techniques such as staff training, improving management effectiveness, completing re-registration of citizens, implementing a revamped IT system, and determining the resources needed to enable growth. The second objective is to increase taxpayer compliance. Deloitte is assisting Kosovo to obtain this objective by helping Kosovo to improve the legal framework, addressing collection techniques, and improving public understanding of new TAK rules and regulations.  

Solution

The implementing team from Deloitte is interacting with and building support among key counterparts in the Government of Kosovo and with international community stakeholders to build sustainable reform. Through this program, Deloitte is providing technical assistance and capacity building support and furthering a broad change agenda with the potential to stabilize Kosovo’s fiscal environment, attract investment, and realize greater revenue. As a result, TAK has been able to attain tax collections targets for each year of assistance.

As used in this document, “Deloitte” means Deloitte Consulting LLP, which provides strategy, operations, technology, and human capital consulting services, Deloitte Financial Advisory Services LLP, which provides financial advisory services, and Deloitte & Touche LLP which provides governance and risk oversight and reporting advisory services. These entities are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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