Four years ago, Her Majesty’s Revenue and Customs (HMRC) the tax revenue authority of the United Kingdom carried out a study aimed at enabling the tax authorities to get a good understanding of the needs of their clients (also called taxpayers).In this study, HMRC consulted businesses and tax consultants for their views on how they can serve them better. The consistent message from all the respondents interviewed was that taxpayers want early certainty and a ‘problem-solving attitude’ from the tax authorities. The taxpayers also pointed out five key qualities that they would like to see revenue authority staff demonstrate consistently.These qualities are a commercial awareness of business issues, impartiality, consistency and a consultative approach through disclosure and transparency and finally responsiveness. These attributes are now widely acknowledged by most tax authorities as the fundamental attributes that should underpin all the revenue body’s actions and dealings with taxpayers.The respondents also pointed out that these qualities should be consistently demonstrated when dealing with all taxpayers regardless of their size and industry sector. The same survey also concluded that revenue authorities will only be able to apply these attributes comprehensively when taxpayers also reciprocate with a high level of disclosure and transparency when it comes to their tax affairs.This is because in some circumstances, the extent to which a revenue body can apply some, if not all, of these five attributes will be dependent on the information it has available from the taxpayer. Following this study, the tax authorities came up with a document that they referred to as an ‘enhanced relationship with the taxpayer’.One of the problems taxpayers face, is the failure of the tax authorities to understand the behavioural drivers in the corporate world. Whereas most large corporate taxpayers undertake transactions for commercial considerations, they structure them with a view to minimising their tax costs and maximising post-tax returns. They therefore engage in pro active tax planning to minimise their tax costs. Tax authorities need to understand the context within which this planning takes place.Without an understanding of the commercial drivers, there is the potential for the revenue authority to misunderstand the broader context of a business activity or transaction and to respond in a way that results in potentially costly tax disputes and uncertainty.This understanding requires far more than just knowledge of tax law and accounting standards. It requires commercial awareness. The tax authorities need to understand the ‘business of how to do business.’ This is the broad context within which large corporate taxpayers operate. This requires an understanding of how companies operate and compete in domestic, regional and global markets; strategic and business planning concepts; company financing; company financial reporting, financial disclosure and other financial accounting matters.Secondly, the revenue authority needs to understand the characteristics of the industry sector in which a particular taxpayer operates. This includes understanding issues such as the industry wide trends and norms; products and marketing; intellectual property; competition and regulation; and commercial risks. This may require the revenue authority to explore opportunities for working in partnership with large corporate taxpayers and tax intermediaries such as professional tax consultants to deliver training on relevant technical and commercial business issues.Thirdly and most importantly, the revenue authorities need to understand the unique characteristics of each particular taxpayer and their business. This is commonly referred to in the corporate world as Knowing Your Client (KYC).Paul Frobisher is a Tax Manager at PwC Rwanda Limited. Email