The Ministry of Finance presented this day the Tax Crime Investigation Program and the Transfer Pricing Program, both of which are part of the Tax Inspectors without Borders Program for El Salvador (ISFS), which seek to strengthen capacities in tax inspection and investigation and criminal in tax matters.
The Transfer Pricing Program will provide the Tax Administration with knowledge of international tax practices and standards. Likewise, the Investigation of Tax Crimes seeks to continue promoting the fight against tax evasion and avoidance.
“This program seeks to offer the Criminal Tax Investigation Unit of the General Directorate of Internal Revenue the opportunity to exchange experiences on relevant cases, thus strengthening the capabilities of our team,” emphasized the Minister of Finance, Jerson Posada.
In addition, self-assessment will begin through the Tax Crime Investigation Maturity Model of the Organization for Economic Cooperation and Development (OECD). “This will allow us to identify areas for improvement and develop recommendations that optimize our ability to combat tax crimes,” said the head of the Treasury.
For both programs, IFSF experts will participate, who will contribute their knowledge and experiences.
The TIWB Program aims to increase the domestic income of developing countries to facilitate the implementation of the Sustainable Development Goals.
The above is the result of the international collaboration of the OECD Secretariat of Tax Inspectors Without Borders and the United Nations Development Programme, to strengthen tax cooperation.
“With this effort, we reaffirm our commitment to the international community to combat tax evasion and avoidance, increasing the collection necessary to finance projects for the benefit of the Salvadoran population,” said the Minister of Finance.
Interview: Exploring El Salvador’s New Tax Crime Investigation and Transfer Pricing Programs
Editor of Time.news (E): Welcome to Time.news! Today, we have the pleasure of speaking with Dr. Maria Torres, an international tax law expert and consultant. Dr. Torres, thank you for joining us to discuss the recent launch of the Tax Crime Investigation Program and the Transfer Pricing Program by El Salvador’s Ministry of Finance.
Dr. Maria Torres (D): Thank you for having me! I’m excited to delve into these significant developments that aim to bolster tax capacity in El Salvador.
E: To start, could you elaborate on the core objectives of these two programs—the Tax Crime Investigation Program and the Transfer Pricing Program?
D: Certainly! The Tax Crime Investigation Program aims to enhance the capabilities of the Criminal Tax Investigation Unit of the General Directorate of Internal Revenue. It will focus on sharing relevant case experiences to fortify their skills against tax crimes. Meanwhile, the Transfer Pricing Program seeks to educate the Tax Administration on international tax standards and practices. By doing so, they can better address tax evasion and avoidance, ensuring a fair tax system in El Salvador.
E: It sounds like a robust initiative! How will the self-assessment through the Tax Crime Investigation Maturity Model by the OECD impact these efforts?
D: The integration of the OECD’s Tax Crime Investigation Maturity Model is a strategic move. It allows the General Directorate of Internal Revenue to identify potential areas for improvement. By recognizing these gaps, they can develop tailored recommendations to enhance their ability to combat tax crimes effectively. This self-assessment is essential to evolving their practices in line with global standards.
E: You mentioned tax evasion and avoidance. How do these programs align with the broader international efforts, especially in supporting the Sustainable Development Goals (SDGs)?
D: These initiatives resonate well with the SDGs, particularly in promoting economic growth and reducing inequalities. The TIWB (Tax Inspectors Without Borders) Program emphasizes collaboration and knowledge sharing between developed and developing nations. By increasing domestic revenue, El Salvador can finance critical public projects that directly benefit its population, which is a crucial element in achieving the SDGs.
E: What role do the TIWB experts play in this context?
D: TIWB experts are invaluable resources. They bring in-depth knowledge and real-world experiences, which will significantly enhance the skills of local tax officials. Their presence ensures that best practices are not only discussed but also implemented effectively, driving sustainable improvements in tax administration.
E: Given the implications of these programs for the local economy, what practical advice would you offer to businesses operating in El Salvador?
D: Businesses should prioritize compliance and be proactive in understanding their tax obligations, especially concerning transfer pricing regulations. They should also conduct regular internal reviews to ensure their practices align with the evolving tax landscape. Engaging with tax professionals who are aware of these new initiatives can also mitigate risk and foster sustainable operations.
E: Lastly, Minister Jerson Posada stated that this effort reaffirms El Salvador’s commitment to combat tax evasion and increase necessary collections. What is your insight on the potential impact of these reforms on the Salvadoran economy?
D: If implemented effectively, these reforms can have a transformative impact on the Salvadoran economy. By increasing tax compliance and reducing evasion, the government can enhance public services and infrastructure, ultimately benefiting the entire populace. Moreover, as tax revenues grow, there will be increased investor confidence, which is essential for economic growth and development.
E: Thank you so much for your insights, Dr. Torres! It’s clear that the Tax Crime Investigation and Transfer Pricing Programs could significantly influence El Salvador’s tax landscape and play a pivotal role in its economic development.
D: Thank you for having me! I’m optimistic about the positive changes these programs could bring.