The DATAFID project aims to promote economic development and combat fraud by increasing knowledge about the impacts of the digital economy and building proficiency in data science.
It is financed by the Directorate-General of the Treasury under the Strategic Investment Plan for Development (PISD), the operational component of the French Support for Improved Domestic Resource Mobilisation strategy (MRIP) in developing countries (2020-2023). The overall objective of this strategy is to support democratic governance and financing for development in France’s priority geographical areas of operation, by improving the mobilisation of domestic resources.
DATAFID project: objectives and issues
The Regional Project to Support the Strengthening of Digital Economy Statistics and the Use of Data Science by Tax and Customs Administrations (DATAFID) focuses on the objective of the inter-ministerial MRIP 2020-2023 strategy to support the modernisation of tax administrations to ensure effective revenue collection.
It aims to meet three priorities identified in the MRIP strategy:
• Help improve the performance and transparency of tax administrations and fight against corruption;
• Improve the efficiency of the support to tax administrations by promoting new technologies;
• Facilitate access to reliable, understandable and comparable data.
The digital economy and the use of data science by tax and customs administrations are therefore central to this innovative project.
Several West and Central African pilot countries will benefit from this support. It will subsequently be possible to extend it to other priority countries identified in the PISD where necessary.
Two areas of operation
Component 1: Improving the knowledge of digital economy to include it in the tax system
Measuring digital economy: Public policies are efficient only when they are based on reliable information (statistical data, etc.). The DATAFID project plans to create a statistical methodology consistent throughout the region, to measure digital economy. It will make it possible to fill in several indicators and identify relevant tendencies for public decision-makers. Once this methodology will be approved, it will be tested in one of our partner countries, which will receive financial and technical support to realise the study, from collecting data to publishing the results for the gener al public.
Digital economy in the tax system: Tax systems are often inadequate to capture the full value created by the digital economy as it falls within imprecise tax frameworks. The OECD has created international standards to try to address this issue, both for corporation tax and VAT. The DATAFID project will support the implementation of these standards by working on the creation of VAT collection systems for the consumption of products on digital platforms, and by raising awareness among the relevant administrations of the importance of taking measures commensurate with the challenges. Finally, digital technology has enabled the development of tools to simplify the relationship with taxpayers (e-declarations, e-payments); the DATAFID project is an opportunity to share experiences between member countries.
It is implemented jointly with AFRISTAT and INSEE and benefits Cameroon, Côte d’Ivoire, Niger, Senegal and Togo.
Component 2: Transparency and performance of tax and customs administrations
Tax and customs administrations collect and produce data on taxpayers (customs clearance, income tax declaration etc.). Cross-analysing these information is a powerful tool to study the impact of policies, evaluate the efficiency of some offices and most importantly improve the risk analysis and consequently the mobilisation of tax resources. DATAFID will support these administrations by creating models to analyse data and improve operations of control and collection. At the same time, the project and the partner countries work together to create distance training modules on the use of programming languages to improve the processing of existing data. To make sure this work continues at the end of the project, national institutions are involved in the process. Local data science actors will participate in a hackathon where they will be able to create their own examples, based on the data made available by partner administrations.
Côte d’Ivoire, Mauritania, Niger and Togo benefit from the actions of this component.
FERDI’s action: creation of diploma-based training modules
FERDI is providing a comprehensive range of diploma-based distance learning modules through a grant allocated by Expertise France. The objective is to help build capacities on data science in tax and customs administrations. This activity is fully in line with the regional and inter-departmental approach, as it is creating training modules that can be directly applied by tax and customs administrations in 14 West and Central African countries.
The pilot phase focuses on four countries to ensure there is optimal teamwork with the local administrations. Indeed, the development of training modules requires enhanced cooperation by the pilot administrations. These administrations are responsible for providing experts to lead user groups made up of officers from customs and tax administrations. The pilot administrations will test and enhance the training in terms of data science during the production phase, before the modules accessible to all the target countries are put online.
Furthermore, due to its regional scope and to make it much easier to access the training, this activity requires extensive work on the digitalisation of knowledge. Indeed, all the training modules on capacity building for tax and customs administrations will be through distance learning.
The DATAFID project started on 1 March 2021, with a start-up phase conducted with tax administrations and national statistical institutes in order to establish a diagnostic and define the future activities to be implemented.
During this start-up phase:
• The AFRISTAT experts organised diagnostic missions on the needs for data collection during the summer of 2021 in five pilot countries: Cameroon, Côte d’Ivoire, Niger, Senegal and Togo.
• Two diagnostic missions on the existing legal framework for tax data have been conducted in Mauritania and Togo by a digital expert accompanied by DGFiP. A third mission is scheduled in Niger in October and a fourth mission in Côte d’Ivoire by the end of 2021.
• FERDI has started to develop three training modules: tax expenditure, mirror analysis and R programming.
To close this start-up phase, a launch event was held from 11 to 15 October 2021, in Clermont-Ferrand at FERDI, then in Paris at Expertise France’s headquarters.