building efficient tax administrations towards promoting national & regional development 20 th...

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BUILDING EFFICIENT TAX ADMINISTRATIONS TOWARDS

PROMOTING NATIONAL & REGIONAL DEVELOPMENT

20TH General Assembly and Technical Conference of COTA,

Belize City, Belize, July 21-24 2008

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Measuring Staff Performance and Evaluation of Performance

in a Modern Tax System

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Three main areas of examination

1. Criteria for a modern tax administrative system

2. Evaluation of a tax administration system

3. Measuring staff performance within a modern tax administrative system

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What makes a tax administrative system modern?

• Does one exist and if it does what does it look like/what are its features

• Several studies have been done to determine this state

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Criteria used to determine a good administrative system

• Level of automation• Integration of data – especially with Customs• Management accountability• All operations places the taxpayer at the centre• Staff readiness to deal with the taxpayer –

Training• Willingness to benchmark with leaders in tax

administration e.g. New Zealand, Canada

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Primary Goal of a tax administrative system

•To ensure compliance with tax laws

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Compliance areas (within the Jamaican system)

Promoting voluntary compliance becomes a primary concern – dependent on:

•How TA interact with taxpayers

•How employees impact public perception of the tax system

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Additional compliance areas

• Ease of payment

• Enforcement - Identification of non-compliance risks

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Evaluating a Tax Administration

• In evaluating a tax administration one must evaluate the achievements of the strategic direction/goals of the organization and other subsidiary performance related indices

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STRATEGIC DIRECTION

Strategic direction guided by :

(a) Road Map

(b) Strategic Plan –aligned to road map

The Road Map’s Conceptual Framework

ENFORCEM

ENT

•Visible (Field Work)

•Firm yet Fair

•Risk-based

SERVIC

E

•Extend to Marginalized

•Recognize Mutual Obligation (rights and obligations)

•Lower Compliance Burden (quality of service, ease of payment)

EDUCATION•Share Information

•Build a Culture of Compliance

•Increase Knowledge of Obligations

A TAX COMPLIANCE MODEL

Knowledge and Understanding

of the Environment

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In analysing our compliance risk factors, we will examine the various forms of Taxpayer Behaviour which result in:

Failure to Register

Failure to File Returns

Failure to Properly Report Tax Liabilities

Failure to Pay Taxes When Due

and

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Compliance Strategy based on Attitude

COMPLIANCE STRATEGY

Have Decided Not To Comply Use The Full Force Of The Law

Enforce By Detection And Action

Assist In Complying

Make It Easier To Comply

ATTITUDE TO COMPLIANCE

Consistently Succeed In Complying

Try To Comply But Do Not Always Succeed

Do Not Want To Comply But Will If Given Due Attention

Strategies Aimed at Creating Downward Pressure

Level of Com

pliance Cost

High

Low

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Strategic Objectives

Tax Administration

Collect the Revenue Due

EFFICIENCY(Cost of Collecting)

EFFECTIVENESS(Equitable Collection Systems)

Improve Compliance

Improve Information and Communication

Technology Processes

Service Education Enforcement

Improve Organization and Management

IRD

TAAD

TASD

CD

TAD

ODG

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Compliance ObjectiveTax Administration

Collect the Revenue Due

EFFICIENCY(Cost of Collecting)

EFFECTIVENESS(Equitable Collection Systems)

Improve Compliance

Service Education Enforcement

TAADIRD

CD

TASD ODG TAD

•Line Officer•Operations•Cashiering•“Floor walking”•Forms Completion•Trade Facilitation•Taxpayer Education•Taxpayer Surveys•Payment Facilitation

•Auditing•Enforcement•Risk management•Surveillance

•Taxpayer Service•Cashiering System•“Floor walking”•Forms Completion•Taxpayer Accounts•Taxpayer Education•Taxpayers Surveys•Payment Facilitation

•Office Compliance•Field Compliance•Investigations•Street Surveys•Taxpayer Accounts

•Refund Processing•Objections Processing•Taxpayer registration•Cashiering

•Taxpayer Service (SD&TT)

•Payment Facilitation•Returns Processing

•Taxpayer Assistance/ Education

•Taxpayer Audit•Taxpayer Assessment•Audit Selection & Review•Audit Services•Excise Operations•Tax Fraud Investigation•Compliance (SD&TT)

•ESOP, Superannuation Funds & Exempt Orgs. Review

•Legal Support Services•Litigation

•New/Amended Legislation•Taxpayer Registration

•Physical Environment

•Taxpayer Registration•Public Education•Public Relations•Public Surveys

•Tax Help

•Taxpayer Education

•Tax Admin Website

•Integrated Research•International Relationships•Integrated Strategies•Integrated Projects

•Agency Contact

•Integrated Research Findings•Integrated Strategies•Integrated Projects

•Independent & Professional Case Judgement

•Investigation/Review of Waiver Applications

•Professional Hearings•Service Standards

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Technology ObjectiveTax Administration

Collect the Revenue Due

EFFICIENCY(Cost of Collecting)

EFFECTIVENESS

(Equitable Collection Systems)

TAAD IRDCD

TASDODG TAD

Improve Information and Communication Technology Processes

• Passenger/Baggage Processing

• Refund Processing• Expenditure Accounting• Revenue Accounting

• E-Transactions/ Payments

• ITSTS• Cashiering• Risk Analysis• Brokers• Manifest• Import Processing• Export Processing• Auditing• Warehouse Operations• Business Process Re-

engineering

• Refunds Payment Processing

• Compliance• Taxpayer Accounting• Fact of Filing• Fact of Registration• Expenditure

Accounting• E- Transactions/

Payments

• ITSTS• Cashiering• AMVS• MV Title Processing• Driver’s Licence• Property Tax• TCC• TRN• Business Process

Re-engineering

• Refunds Processing Objections

• Returns Processing• Expenditure Accounting• Revenue Accounting• E- Transactions/

Payments• ESOP• Superannuation• Exempt Organizations• Valuation• Cashiering• Tax Fraud Investigations

• ITSTS• GCT Registration

& De-Registration• Classification• Audit• Audit Review• Assessment• Valuation• Business Process

Re-engineering

• ITSTS

• Administrative Systems (including HRMIS, document Management, Procurement, Inventory)

• Taxpayer Data Base- TRN System

• Legal IS• Expenditure

Accounting

• Business Process Re-engineering

• Intranet

• ITSTS• ICT Policy• Tax Revenue• Tax Base• Computerized

Integration of Core Systems (ICTAS)

Business Process Re-engineering

Business Intelligence System

Directorate-wide Internal Electronic Communication

•ITSTS•Waiver Information System

•Business Process Re-engineering

ITSTS Internal Technical & Service Tracking System

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Organization and Management ObjectiveTax Administration

Collect the Revenue Due

EFFICIENCY(Cost of Collecting)

EFFECTIVENESS

(Equitable Collection Systems)

TAAD IRDCD

TASDODG TAD

Improve Organization and Management

Issues Common to all Departments

HR Plan• Right-functioning/role clarification and Integration

• Right sizing• Job rotation• Career development• Performance management

• Quality review• Supervision• Strategic and annual plans

• Integrated planning and control

• Job evaluations and descriptions

• Space Management

Issues Common to all Departments

Issues Common to all Departments

Issues Common to all Departments

Issues Common to all Departments

Issues Common to all Departments

Core Activity Training• Orientation• Line Officer• Cashiering• Auditing• Cargo Processing• Passenger/Traveling Processing

• Warehouse Operations and standards

• Investigations• Foreign Languages

Core Activity Training• Orientation• Compliance Officer• Taxpayer Accounting• Taxpayer Service Collections

• Cashiering• Revenue Accounting

Core Activity Training•Orientation•Audit•Assessment•Valuation•Tax Fraud Investigation•Returns Processing•Audit Services•Cashiering•Registration•Risk management

Core Activity Training• Orientation (Tax Admin, TASD)

• “Across Departments”• Supervisory• General Management• Training Systems• Training of Trainer• Taxpayer Registration

• HRM policy• HR plan (Tax Admin)• Staffing control• Code of Conduct • Operations oversight• Performance incentive scheme

• Executive management development

• HRM oversight• Career paths• Classification equity• Functional integration• Branding of Tax Admin• Space planning policy

Core Activity Training•Orientation•Appeals Officer

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• Identify critical areas of success and set targets

• For consistency track targets over a period of time

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Developing the strategic direction within the Jamaican Tax

Administration

Key terms• Road Map• Strategic/Corporate Plan• Operational Plan• Performance management system

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• The reporting process – monthly and quarterly• Structured format for data capture• Template used throughout departments• Written analysis of data accompany report• Reports signed by respective Commissioners • Quarterly stand-up reviews

Evaluation of Tax Administration Performance

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• Weights are applied to outputs

• Need for more than 1 measure of performance

Evaluation of Tax Administration Performance

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Measuring Staff Performance

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Some Criteria for an Effective Staff Appraisal System

• Staff performance must be aligned to the strategic objectives of the organization

• Must be timely and consistent

• Must be objective and transparent

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Measuring staff performance within the Jamaican Tax

Administration• Each operational plan has a measurable

component• Individual plans have key results areas

(KRA’s) which are aligned to unit plans • Additional indicators discussed within

departments

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Performance Appraisal System

• Starts by identification of deliverables in departmental plans

• Development of Section/Unit plans and then individual plans

• KRA’s taken from individual workplans plans and form the base of the performance appraisal document

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Performance Appraisal System

• Performance target are discussed jointly with Supervisor and desired results identified.

• Performance plan has five parts– KRA’s– Employee Performance Factors– Supervisory Performance Factors (where necessary)– Performance Consequences– Training and Development

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Performance Appraisal System

• 2 reviews done annually – interim 6 months and end of year

• Overall score assigned

• Standard set –at least 85% of staff obtain 70% or more on PER

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Link with Organizational Performance

• Template developed to align staff performance with that of the departments

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Strengths of the System

• Incremental improvements in organizational review process

• Increased communication to staff members

• Some aspects of data collection is done

• Reliance on data from ICTAS (development of data warehouse)

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Strengths of the System

• Willingness to benchmarking to try to improve on adequacy of measures

• Quality assurance mechanism embedded in process

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Weaknesses of the system

• Inconsistent and insufficient data collection

• Inadequate feedback

• Lack of in-depth analysis of trends to adequately inform the decision making process

• Lack of soundness/adequacy of measures

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Weaknesses of the system

• Insufficient Communication

• Timing – completion of strategic direction, completion of PER’s

• Insufficient documentation of reports

• Inconsistencies – No sanctions for department failure but sanctions for incompletion of PER’s