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Ministry for Revenue Corporate Plan

Our Future 2012 Onwards

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Contents Minister's Foreword ...................................................................................................................................................................... 4

CEO’S Message ................................................................................................................................................................................. 4

INTRODUCTION .............................................................................................................................................................................. 5

Major themes of this plan ....................................................................................................................................................... 6

Underpinning the strategic direction ................................................................................................................................ 6

Customer charter .................................................................................................................................................................. 7

Compliance model ................................................................................................................................................................ 7

Corporate Values ................................................................................................................................................................... 7

C HAPTER ONE: THE TAX AND CUSTOMS SYSTEM AND REVENUE ADMINISTRATION ................................. 9

Linkage to Sector plans ........................................................................................................................................................... 9

Roles within the revenue system ........................................................................................................................................ 9

The nature of revenue administration ........................................................................................................................... 10

Principles and functions of revenue administration ................................................................................................ 10

Assessing the efficiency and effectiveness of a tax and customs administration ........................................ 11

Structure of the Ministry for Revenue ........................................................................................................................... 12

CHAPTER TWO: MINISTRY FOR REVENUE AS A TAX AND CUSTOMS ADMINISTRATION .......................... 13

Ministry for Revenue’s vision ............................................................................................................................................ 13

Ministry for Revenue’s mission ........................................................................................................................................ 13

The scope of the Ministry for Revenue's work ........................................................................................................... 13

Legislation affecting the Ministry for Revenue .......................................................................................................... 14

Tax and Customs policy ....................................................................................................................................................... 14

Profile of revenue ................................................................................................................................................................... 15

Income tax ................................................................................................................................................................................. 15

VAGST .......................................................................................................................................................................................... 15

Profile of all revenue forecast for 2012/2013 ............................................................................................................ 16

Profile of outstanding debt ................................................................................................................................................. 17

Assessing the Ministry for Revenue’s efficiency ........................................................................................................ 19

CHAPTER THREE: THE ENVIRONMENT IN WHICH WE OPERATE – NOW AND IN THE FUTURE ........... 20

Profile of client base .............................................................................................................................................................. 20

Taxpayers with salary, wage or investment income ........................................................................................... 20

Small businesses................................................................................................................................................................. 20

Tax agents ............................................................................................................................................................................. 20

Customs and Carrier Agents .......................................................................................................................................... 21

Employers ............................................................................................................................................................................. 21

Large enterprises ............................................................................................................................................................... 21

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Importers and exporters ................................................................................................................................................. 21

Travellers .............................................................................................................................................................................. 21

External pressures impacting on the Ministry for Revenue ................................................................................. 22

Customer attitudes towards taxation, duties and the revenue administration ....................................... 22

Customer expectations .................................................................................................................................................... 22

Changing nature of business – e-commerce ........................................................................................................... 22

Increasing globalisation .................................................................................................................................................. 23

Internal pressures impacting on the Ministry of Revenue .................................................................................... 23

Summary of environmental issues .................................................................................................................................. 23

CHAPTER FOUR: OUR FUTURE ............................................................................................................................................. 24

Key principles ........................................................................................................................................................................... 24

What these principles mean for the Ministry for Revenue's strategic direction.......................................... 25

A model for encouraging customer compliance ........................................................................................................ 26

The Ministry for Revenue's future focus ....................................................................................................................... 27

Strategic areas .......................................................................................................................................................................... 27

The outcomes we seek .......................................................................................................................................................... 29

CHAPTER FIVE: OUTPUTS ...................................................................................................................................................... 31

Linking our outputs to our outcomes ............................................................................................................................. 33

CHAPTER SIX: IMPLEMENTATION PRIORITIES ............................................................................................................ 34

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Minister's Foreword The Ministry for Revenue plays a critical role in improving the lives of all the people of Samoa. The Ministry provides services to all Samoans and collect the bulk of the revenue Government needs to fund its programs. It has the job of protecting the community from potential risks arising from international trade and travel, while facilitating the legitimate movement of people and goods across the border. Given the importance of its role, the Ministry needs to constantly strive for excellence and be truly effective and efficient in all that it does.

This Corporate Plan outlines the Ministry's strategies for achieving the

outcomes those roles imply. It outlines some of the key strategic areas

the Ministry will focus on to support the Government's national

priorities in its Strategy for the Development of Samoa (SDS) 2012-

2016. This corporate plan is also an initial step in improving the

Ministry of Revenue’s planning processes. The next challenge for the Ministry is to live up to the key

concepts and themes articulated in the plan. It is only when we have implemented the initiatives described in

the plan that we will have delivered on our stated intent of improving the administration of the tax and

customs system for all Samoans.

In this plan, the Ministry has looked at the environmental pressures that will impact on the customer base and the services the Ministry for Revenue provides. They have also examined the nature of other countries’ revenue administrations and examined our internal systems to see how we can respond quickly and successfully in a fast-changing world. This information has shaped the Ministry's vision for the future, which this plan describes. The plan itself does not present detailed prescriptions for action. It determines four key principles that guide the strategic direction, and the new emphases they lead to. It sets out the strategic areas that form a framework for considering specific initiatives. And within those areas, it describes a number of initiatives designed to take us in the direction we want to go. The Ministry's core role in collecting revenue for financing the core work of government, the effective and efficient administration of the tax system, the facilitation of trade at the border and protection at the border will require the Ministry to continually review and refine the planning framework and strategic direction it has laid down for the next few years. It will do so with due attention to ensuring the priorities to achieve the strategic goals of the SDS and the government's efforts for economic growth and improving the quality of life for all are implemented. In this respect the Ministry will continue to monitor environmental pressures and the Ministry’s performance to ensure the tax system is sustainable over the longer term. It will ensure that appropriate feedback mechanisms are in place to allow stakeholders, customers and staff the opportunity to comment or critique the Ministry of Revenue’s performance or pressure areas. It will monitor and where appropriate adopt ‘best practice’ procedures from other tax and customs administrations and other relevant regulatory organisations. I extend our grateful thanks for the valuable contribution provided by the many stakeholders of this Ministry and we look forward in working together with them in the implementation of this Plan. Together, we will ensure that we are working together for a secure and prosperous Samoa.

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Honourable Tuiloma Lameko

MINISTER FOR REVENUE

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Chief Executive Officer’s Message The changes envisaged over the next five years are not all new. A number of initiatives are already under way or due to begin shortly. Planning is of course a continuous process. What is important is that our staff, the people who are going to make the difference in achieving that which we describe in this Plan, continue to show their commitment to assist customers to get it right for the good of Samoa as a whole. This gives us the foundation to make real progress over the years ahead. It is important that the energy, the abilities and the commitment of all our staff are applied to the challenges we face. The changes I envisage over the next few years of this Plan are about the way we interact with customers, and therefore are subtle but at the same time more demanding: We will deepen our understanding of our role within the community and internationally, further developing our knowledge of customers needs and generally

making compliance as easy as possible (and hard to avoid) for all Samoans. The Ministry for Revenue of the future will be seen as an important and trusted part of the Samoan

community. We will have an ongoing relationship with customer groups and agents, rather than one-off interventions.

As Samoa’s gatekeepers, we will increase our use of intelligence and risk assessment to target our physical checks of containers, vessels, or travellers. We will conduct risk based investigations and audits, and prosecute offenders. The opportunities offered by electronic commerce, both for the Ministry for Revenue and also our customers, need to be realized. However, this will mean new compliance challenges relating to electronic commerce need to be understood and resolved. In working more closely with Samoans and our international counterparts, we will improve our understanding of the factors that influence customers’ compliance attitudes and behaviours. This will allow us to be more sensitive to the way we interact with individual customers. At times we have adopted a ‘one size fits all’ approach to compliance. In the future this will be quite different. We will, as much as possible within the law, tailor our approach for different situations. In addition, our business processes will be simpler. We currently collect and process a significant amount of information for verification purposes, even though we know the majority of customers do in fact comply. In the future we will distinguish those customers from whom we require additional information and simplify our processes for compliant customers. The Ministry for Revenue staff will be recognized as technically skilled, fair and professional. We will continue to provide the opportunity for staff to learn new skills, and to enhance the tools they use in their daily work. Realizing our aspirations for the future depends upon capable, dedicated staff striving to achieve their best. I am confident that these are the right areas for us to focus on in this Plan period. They are intended to support the Government's aim for fiscal sustainability, and a public service that delivers results and value for money, while managing within tight fiscal constraints. I look forward to the challenges ahead, and in working with my management team and staff towards improving the public’s confidence in the Ministry and working more closely with Samoans generally, to ensure we meet community expectations. I am confident we will make real progress during the next few years. ______________________________ Pitolau Lusia Sefo Leau

CHIEF EXECUTIVE OFFICER.

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INTRODUCTION

The Ministry for Revenue's Corporate Plan: describes the future direction for the Ministry for Revenue from July 2012; sets out the Ministry's plan for the way forward.

The plan has been developed through:

a review of historical and current information about the Ministry of Revenue, including statistical and position papers;

examination of the strategic direction of overseas tax and customs administrations; discussions with stakeholders; a scan of the current environment, looking at significant demographic, technological,

international, political and economic factors; a series of meetings with the Ministry for Revenue’s senior management team; a series of workshops with the Ministry for Revenue managers and staff, individual discussions with Ministry for Revenue personnel in their areas of expertise.

Major themes of this plan Using the information described above, the Ministry for Revenue has determined the following major themes:

improving our customer service through streamlining our processes, to make it easy for customers to meet their obligations, and more cost effective for the Government to administer the law;

tailoring our interactions to meet customers’ varying needs, rather than using a ‘one size fits all’ approach;

Improving our understanding of compliance risks through increased intelligence and more targeted compliance activities

managing relationships through greater visibility in the community building our capability to ensure the Ministry for Revenue is well positioned to deliver on this

plan. These themes will allow the Ministry for Revenue to:

protect the integrity of the revenue system; influence the tax and customs system for the good of Samoans generally, by extending the

Ministry’s knowledge of customer behaviour.

Underpinning the strategic direction A critical factor for achieving the Ministry for Revenue's strategic direction, is the ability to demonstrate the type of relationship set out in its customer charter, values and implementation of its compliance model.

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Customer charter The customer charter describes the type of working relationship we want to have with customers and what customers can expect from us. The values within the charter are described below:

How we will work with you We will be easy to deal with following through on what we say we will do in a prompt,

professional manner We will be responsive to individual, cultural and special needs The person you are dealing with will give you their name We value your feedback and use it to improve our services

Reliable advice and information We will provide you with reliable and correct information about your obligations We will assist you to get in touch with the right people for your needs We will make it easy for you to question the information, advice and service we will give you

Confidentiality We will treat all information about you as private and confidential, and keep it secure We will only use or disclose it in accordance with the law

Consistently and fairly We will apply the law consistently so everyone has the opportunity to voluntarily comply We will take your particular circumstances into account as far as the law allows We will inform you about the options available if you disagree with us, and we will work with

you to reach an outcome

Compliance model The compliance model, described in Chapter Four, promotes a more tailored, responsive approach to customers. It will help the Ministry to understand what influences customers’ compliance behaviour, and therefore, help us choose the most appropriate intervention for them.

Corporate Values These are the values that guide us;

1. Integrity: At all times we are professional and display utmost integrity by being:

Honest We act honestly, are truthful and abide by the laws of Samoa. We are trustworthy in everything we do.

Impartial We provide impartial advice, act without fear or favour, and make decisions on their merits.

Transparent We take actions and make decisions in an open way.

Accountable We are able to explain the reason for actions taken, and take responsibility for those actions. We act with courage in pursuit of the best possible outcomes for the community and the Government.

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2. Service Commitment:

We serve the people well through faithful service to the Government. We are proud to deliver quality services to the community. We willingly accept the responsibility of helping to keep Samoa safe, secure and prosperous, and are dedicated to working as ‘One Service’ to achieve that.

3. Respect: We invest in our staff and support each other to lead fulfilling and enjoyable careers. We treat the people, the Government and our colleagues with respect and courtesy. We are fair and just and always act with respect for the law and for the rights of others.

4. Working together: We use teamwork and cooperation to achieve results together We value the views and contributions of others and actively seek to engage and collaborate for the benefit of Samoa.

5. Efficiency and effectiveness:

We achieve good results for Samoa in an economical way. We are open to new ideas and technologies, responsive to changing needs, and innovative in the way we respond. We work with energy and enthusiasm to produce the best possible outcomes for the community.

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CHAPTER ONE: THE TAX AND CUSTOMS SYSTEM AND

REVENUE ADMINISTRATION

Linkage to Sector plans The Vision for the 2012-2016 SDS focuses on "Improved quality of Life for All". In support of this Vision, the theme for the SDS is 'boosting productivity for sustainable development'. The achievement of the Vision relies on the effective implementation of the development strategies under 14 key national outcomes within four broad sectors. The broad outcomes for the Ministry for Revenue over the same period of the SDS support the strategies for macroeconomic stability - the Key Outcome 1 for the Economic Sector. As one of the key central agencies of the Finance Sector which is responsible for financial and economic management, the Ministry for Revenue is responsible under the Finance Sector Plan for implementing initiatives that contribute to Priority Area 1 and Key Outcome 1 of the SDS. The Finance Sector Plan 2012-2016 objectives of fiscal sustainability; monetary and financial stability and development; and sound external position include strategies for the Ministry for Revenue that contribute to the sector objective of "development of a relevant, effective and sustainable fiscal position." Our four strategic areas, the outcomes we seek and the initiatives we plan to achieve those outcomes over the next five years are directly linked to the sector and national objectives and strategies for fiscal sustainability and macroeconomic stability.

Roles within the revenue system In Samoa, the Ministry for Revenue is responsible for collecting revenue to fund the services and infrastructure Government provides for Samoans. In understanding the Ministry’s role, it is helpful to consider the roles of all parties within the revenue system. There are three major players in a revenue system: the Government, the customers and the revenue administration agency. Each of these has quite specific roles: the Government (through Parliament) sets the laws; customers (or their agents) need to understand and meet their obligations; and the revenue administration helps customers comply, detects those who do not comply and runs the administration in an efficient and effective manner.

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The three roles are interdependent, as reflected below.

INTERDEPENDENCY OF ROLES IN A REVENUE SYSTEM

Each player influences the others. For example, while Government (through Parliament) makes the laws, the Ministry for Revenue administers it, and advises Government and other related Ministries with input from customers to influence policy decisions. The Ministry for Revenue’s understanding of these relationships is key to being able to provide services that meet the needs of Samoans. It highlights the important role the Ministry for Revenue has in influencing the tax and customs system as a whole. As the Ministry for Revenue’s major role is to administer tax and customs laws, it is useful to consider the nature of revenue administration generally.

The nature of revenue administration Revenue administration is one component of the total tax and customs system. It has an overall objective that comprises:

sufficiency, predictability and reliability of revenue for the Government; efficiency (a mix of taxes and duties that collect the required revenue, while at the same time

minimising distortions to the economy and the cost of compliance and administration); fairness (an even-handed application of the law).

Principles and functions of revenue administration Looking overseas, it is apparent revenue administrations commonly seek to:

operate within the law; collect the highest revenue that is practicable over time; operate on the premise that most people pay taxes and duties voluntarily; collect revenue as cost effectively as possible; operate within the resources appropriated by Parliament; have regard for the compliance costs incurred by customers.

Government

Makes the law (through Parliament)

Citizens and their agents

Comply with the law

Ministry for Revenue

Administers the law

Society

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A revenue administration has a responsibility to:

inform customers of their rights and obligations and provide help to enable customers to calculate their tax, and meet their obligations;

ensure customers are aware of what to do if they have difficulty meeting their obligations; have procedures in place for those who choose not to comply – and ensure customers are aware

of these; provide frank and practical advice to the Government and relevant central Ministries on the

most effective tax policy for the benefit of the whole society. Revenue administrations undertake a range of activities to fulfil their responsibilities. In Samoa, for example, we undertake the following:

1. Revenue assessment and collection – the issuing of assessments and refunds, banking of tax and duties payments and accounting for (and reporting on) the collection of revenue;

2. Protect the border from the illicit movement of people and goods through timely and appropriate intervention at ports of entry

3. Issue Licenses to Businesses, Customs and Shipping Agents 4. Facilitate legitimate trade and travel through an intelligence led, risk based approach; 5. Administer Excise, Warehouse and Liquor legislation through appropriate monitoring controls 6. Customer assistance – the design and provision of high quality, timely products and help so

people meet their obligations 7. Management of outstanding debt and returns – taking effective and timely follow-up action

against people who fail to file a tax return or make a payment (including duty deferral arrangements), and those who do not file or pay on time;

8. Detection and deterrence of non-compliance – the identification of non-compliance and ensuring the appropriate action is taken to encourage compliance – ranging from assistance to audit or prosecution;

9. Rulings – ensuring consistency and impartiality in the application of tax law, by providing rulings to taxpayers on the interpretation and application of specific tax laws;

10. Litigation management – taking court action when required. 11. Provide data to the Bureau of Statistics for Government economic analysis.

Assessing the efficiency and effectiveness of a tax and customs administration

The principles identified above provide a framework against which to assess the efficiency and effectiveness of a tax and customs administration.

Some measures relating to tax such as compliance costs and deadweight losses, are very difficult to be precise about. However, because revenue administrations internationally recognise the value in being able to look at performance information beyond the micro level, research is being undertaken to identify macro performance indicators that are more easily-measurable than at present.

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The following performance indicators are considered useful: the amount of budgeted revenue collected; the amount of tax and duties correctly payable collected; the cost of collecting revenue compared to the amount collected; customer perceptions of the integrity of the tax and customs system (as a measure of voluntary

compliance). Public perception of border security threats and risks Goods clearance cost as a percentage of the value of trade

Improved macro performance information will provide the means for revenue administrations to focus on assessing the impact of their activities. This will be an area of on-going focus.

Structure of the Ministry for Revenue

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CHAPTER TWO: MINISTRY FOR REVENUE AS A TAX AND

CUSTOMS ADMINISTRATION

Ministry for Revenue’s vision The Ministry for Revenue overarching vision is:

Working together for a secure and prosperous Samoa

Ministry for Revenue’s mission Our mission clearly captures our role and our work: We collect money to pay for public services and help people to meet their obligations, protect our borders and facilitate legitimate trade and travel. We aim to maximise compliance with Samoa’s tax and customs legislation through education, quality service and appropriate enforcement. The aim of ‘maximising compliance’ is about getting as many customers as possible to pay the right amount of tax over the long term. The Ministry for Revenue has a responsibility to ensure the long-term sustainability of the tax and customs system. As discussed in Chapter One, we play an important influencing role, a role that relies on us understanding the business and travelling community, and the various dimensions within the different industry groups. As we continue to build this knowledge, the Ministry for Revenue will become increasingly well positioned to identify opportunities to further increase compliance and the overall effectiveness of the tax and customs system.

The scope of the Ministry for Revenue's work The Ministry for Revenue undertakes the full range of tax and customs administration functions, as

described in Chapter One, and, in addition, administers and enforces legislation enabled under the

Customs Act 1977, as well as delegated powers under Acts for other Ministries and Corporations for

which the Ministry for Revenue has functional responsibility.

The Ministry for Revenue collected 90% ($377 million) of targeted revenue of $417 million in tax, duties and excise through Samoa’s taxation and customs regimes in 2011/12 – nearly 80% of Government’s revenue. For FY2012/2013, the Ministry is targeted to collect $477 million to finance the government's budget. The Ministry for Revenue is a diverse business. The Ministry:

Administers 4 tax types; Administers business, Liquor and Customs and Shipping agent licenses Facilitates legitimate trade through an intelligence led risk based approach Protects the border from threats through the interception of illegal drugs, firearms and other

prohibited and restricted goods using intelligence analysis, computer-based analysis and detector dogs.

Administers the effective and efficient collection of the import excise and domestic excise taxes in conformity with the Excise Acts, and the control of warehouses as prescribed in the Customs Act.

Has 7 delivery sites – including offices, ports and K9 facilities; Employs over 180 staff.

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For the purpose of this strategic planning exercise we have assumed that the Ministry for Revenue: will have the same activities in the future as it has today; will increasingly be involved in functions being shared across more than one agency, for

example, the Ministry of Commerce, Industry and Labour both have roles in the administration of business licenses;

Legislation affecting the Ministry for Revenue Acts administered by the Ministry for Revenue or directly affecting the Ministry

Income Tax Act 1974 VAGST Act 1992/1993 Income Tax Administration Act 1974 Income Tax Rates Act 1974 Business License Act 1998 Customs Act 1977 Domestic Excise Tax Administration Act 1984 Excise Tax Administration (Imports) Act 1984 Excise Tax Rate Act 1984 Liquor Act 2011 Customs Tariff Act 1975 Customs Regulations Customs Valuation Regulations 2011 Tax Information Exchange Act 2012 Income Tax Act 2012 Tax Administration Act 2012 Business Licence Regulations 2012 Customs Computerized Entry Processing Regulation 1998

Tax and Customs policy The list and content of the Acts mentioned above do not remain static. There is a need for improved capacity for policy advice in the Ministry for Revenue to enable it to support the central agencies role in ensuring fiscal stability and macroeconomic development. The Ministry for Revenue will establish a Policy Forecasting and Business Improvement division to liaise with member organisations across the Government’s finance sector and other stakeholders in order to progress policy development and reforms. In addition, tax and customs policy reflects the changing environment locally and internationally and supports the revenue system and, as part of that, tax and customs administration. This includes assisting with Government’s reform agenda. Areas of work over the next few years, for example, are:

Taxes in a changing world economy – ensuring the tax system is appropriate for a small open economy where, increasingly, Samoans are competing in the global market.

Tax simplification – improving the tax system and minimising compliance costs. The key priorities are: small business tax simplification, review of the penalties rules,

Rewrite of the Income Tax Act 1974, the Tax Administration Act 1974 and the VAGST Act 1992/1993 – this task is a major part of our tax simplification work. The principle behind the rewrite is that legislation which is clear, written in plain English and structurally consistent, makes it easier for customers to identify and comply with their tax obligations.

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With the increasing international focus on adherence to international best practices on transparency of exchange of information for tax purposes, the Ministry as the Competent Authority for tax information exchange will continue to build technical capacity in this arena and work with other central agencies to ensure Samoa's compliance with international and OECD standards for exchange of information for tax purposes, and build capacity in negotiating and monitoring of international tax agreements.

With Samoa completing its accession to the WTO, there is a new impetus on the Government to ensure that its customs policy is in line with international standards set out by the WTO. To complement the work undertaken through Samoa's membership in the WTO and WCO, the Ministry will undertake the process of accession to the Revised Kyoto Convention within the timeframe of this Plan.

Samoa’s membership in the WTO and WCO means that regular review and reform will need to be a constant part of our Customs service. Particularly in the way we design our legislative framework and carry out our roles, functions and responsibilities. Such reforms will be undertaken with a view to meeting Samoa’s international obligations as a member of these organisations.

The Ministry will continue its ongoing legislative reforms to ensure that technical barriers to trade are progressively removed and that laws promoting discriminatory trade practices are amended or repealed. The Customs Act 1977 and the certain provisions of the VAGST Act have been identified for major reforms

In terms of procedural reform, new processes will be required in order to fully implement newly passed WTO related laws such as the Customs Valuation Regulations 2011 and the Customs Tariff Amendment Act (No. 2) 2011.

Profile of revenue The $377 million in revenue which the Ministry for Revenue collected in 2011/12 was made up of a large number of different tax, duty and excise types. However, by far the greatest proportion (43%) is from VAGST (domestic and imports)

Income tax Income tax includes tax on earnings paid by sole traders and companies. Salary and wage earners pay income tax through Pay As You Earn (PAYE) which is deducted from their pay, by their employers, on behalf of the Ministry for Revenue. There are more than 21,000 taxpayers paying income tax through PAYE.

There were, as at 30 June 2012, approximately 7000 sole traders, companies and/or partnerships registered as operating some form of business venture or investment where income is not taxed at source. Only about 25% of those in business have sufficient business income to be required to be registered for VAGST (at a $78,000 threshold).

VAGST Almost 1800 taxpaying entities were registered for VAGST as at 30 June 2012.

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Profile of all revenue forecast for 2012/2013

The table below shows the forecast breakdown of revenue to be collected broken down by tax type for the 2012/2103 financial year:

Particulars Annual

Estimate

Border Cargo Management

880,338

Trade Facilitation Compliance

414,000

Import Duty

50,025,548

Import VAGST

129,125,548

VAGST Gov't Imports (Aid & Loan funded project)

5,500,000

Liquor License

378,000

Import Excise

47,725,548

Domestic Excise

53,625,548

Coy Income Tax

13,328,000

Coy Provisional Tax

14,896,000

Sole Trader Income Tax

784,000

Sole Trader Provisional Tax

392,000

PAYE Income Tax

57,125,548

Withholding Tax

9,800,000

VAGST Private Sector

43,025,548

VAGST Gov't (Trfd)

21,007,817

Business License

1,325,548

Total Forecast Collection 449,358,988

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Profile of outstanding debt

As at 30 June 2012, $84 million in tax was outstanding. This equates to 22% of net revenue collected. The breakdown of tax debt by tax type is:

. The value of tax debt by tax type is:

2%

51%

29%

16%

2%

Debt by tax type

PAYE

VAGST

Inc Tax

Provisional Inc Tax

Withholding Tax

$1.67

$42.98

$24.64

$13.99

$1.53

Debt by tax type (in million Tala)

PAYE

VAGST

Inc Tax

Provisional Inc Tax

Withholding Tax

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As at 30 June 2012 the total amount of unpaid debts for Customs is $23.82m. The breakdown by age is

shown below:

As at 30 June 2012 the total amount of overdue deferred duty is $12.62m. The breakdown by age is

shown below:

$1

$3.96

$8.40$4.40

$5.88

$0.18

Unpaid Debts (in million tala)

< 1 year

1 year

2 - 4 years

5 - 7 years

8 - 10 years

over 10 years

$0.20

$2.45

$1.64

$2.58

$5.75

0-1years

2 years-4 years

5years-7 years

8 years-10 years

over 10 years

Deferred debts (in million tala)

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Assessing the Ministry for Revenue’s efficiency

It is very difficult to compare the administrative efficiency of different revenue agencies because of differences in tax and customs systems, size of the economies, and different accounting treatments. However, it appears that the Ministry for Revenue compares well with the revenue agencies of other countries. As noted in Chapter One, the cost of collecting revenue as a proportion of total revenue collected is widely recognised as one of the standard measures of a revenue administration’s efficiency. During 2011/2012, the Ministry for Revenue's administrative cost as a percentage of net revenue was 3.7%. This provides opportunity for improvement compared with other administrations, most of which fall in the range of 1–2.5%. The proportion of overdue debt compared with revenue collected (another internationally recognised indicator of the relative health of a revenue administration) was around 20% in Samoa. This offers opportunity for improvement compared to overseas revenue administrations and warrants particular focus over the coming five years.

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CHAPTER THREE: THE ENVIRONMENT IN WHICH WE

OPERATE – NOW AND IN THE FUTURE The environment in which the Ministry for Revenue operates inevitably affects its future direction. There are factors, both external and internal, which may present opportunities or risks as we progress. In thinking about the future, we need to take these factors into account. This chapter outlines:

our current environment and likely changes within the Samoan community that will affect that environment;

our current customer base; demographic information about likely changes

to the customer base; a description of external and internal pressures

likely to impact on the Ministry for Revenue.

Profile of client base The Ministry for Revenue works with a large and diverse client base. ‘Customers’, for example, include new and small businesses, self-employed taxpayers, salary and wage earners, trusts, partnerships, importers, exporters, travellers and large multinational companies. Within the customer group, there are those who choose to be represented by a tax agent, or have a customs agent for all or some of their tax and customs work, and others who choose to look after their own matters. To give a sense of the make-up of our existing client base we detail some of our client groups below.

Taxpayers with salary, wage or investment income This group includes those who are not in business but who have income from salary, wages or beneficiary incomes, and/or investment income not taxed at source (such as rental property or income from abroad). In terms of annual filing obligations, these taxpayers can be separated into two groups as follows:

1. salary and wage earners who are not required to furnish a tax return; 2. salary and wage earners required to complete a return due to having multiple jobs or income

above the threshold not taxed at source or correctly.

Small businesses The number of new business licenses issued in Samoa continues to increase, with a 40% increase in licenses over the five years to 2012, the major increase being in the number of small businesses. Small businesses place significant pressure on our taxpayer services as they often require greater assistance to understand their obligations, and have fewer funds available to seek the advice of a tax agent.

Tax agents Tax agents will become an important group to the Ministry for Revenue. There are currently approximately 18 certified public practitioners within the Samoan Institute of Accountants. With the introduction of self assessment in 2013, coupled with the tax agent registration legislation, we predict an increasing number of tax agents. Tax agents will be made up of public practitioners who are certified through the Samoan Institute of Accountants legislation and a new market of agents that assist small businesses to meet their tax obligations but do not require the completion of financial statements.

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Looking at compliance information, we can see that taxpayers who use tax agents are generally more compliant in meeting tax filing obligations than those who look after their own tax affairs.

Customs and Carrier Agents Customs and carrier agents are an integral component to the clearance of incoming and outgoing cargo consignments. As with taxpayers, importers that use a Customs and carrier agent are generally more compliant in meeting trade obligations than those that do not. The World Customs Organisation’s (WCO) endorsed a strategy for its members, the SAFE Framework of Standards to Secure and Facilitate global trade, to assist with the challenges faced by modern Customs administrations. A core component of the SAFE Framework is the identification of Authorised Economic Operators (AEO). AEOs may include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors. As a member of the WCO, Samoa signed up to start the process of implementation of the SAFE Framework of Standards in 2010. The commencement of the Customs Modernisation Project is part of this undertaking and will put in place some of the necessary building blocks for Samoa's compliance with the SAFE Framework of standards. Part of the Project's activities will develop the procedures and minimum standards for identifying and certifying AEOs. Customs agents will thus be given an opportunity to demonstrate their suitability based on past compliance levels to be deemed eligible for AEO status. In turn this will serve to better facilitate the legitimate movement of trade transactions.

Employers There are around 900 employers in Samoa collectively employing around 21,000 employees. Around 81% of employees are employed in the tertiary and public administration sector1. This sector includes commerce, transport and communication, finance and business services, personal services, hotels and restaurants and Government. Employers provide information that allows the Ministry for Revenue to assess and collect the annual liability of salary and wage earning taxpayers. To the year ending 30 June 2012, about $62m, or around half of all tax collected, was paid by employers as PAYE, withholding tax or source deductions. Clearly, employers play a critical role in tax administration.

Large enterprises Large enterprises in Samoa, that is, companies that have an annual turnover in excess of $1 million, companies associated with them, make up only 0.1% of Samoa’s taxpayer base. However, these companies along with Government Ministries and Corporations return PAYE on behalf of around half of Samoa’s salary and wage earners.

Importers and exporters As with Customs Agents, regular importers and exporters will be provided with the opportunity to demonstrate their eligibility to be granted AEO status. This will serve to streamline trade transactions with the availability of information that will allow Customs to target imports more effectively, resulting in the more efficient allocation of limited resources.

Travellers Travellers make up a large part of our customer base, with an excess of 160,000 movements in the last financial year. The majority customers in this area are international visitors. As a result of this constant change in customers Customs profiling needs to be updated regularly.

1 Ministry of Finance Quarterly Economic Review (Jul - Sep 2012)

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External pressures impacting on the Ministry for Revenue While the Ministry for Revenue is comparative with other revenue administrations around the Pacific region, there are both external and internal pressures that will affect the Ministry going forward. Major changes in the business and social environment that impact our business are as follows.

Customer attitudes towards taxation, duties and the revenue

administration To work effectively with customers we need to consider customer perceptions of and attitudes towards tax, duties and the revenue administration. This includes:

the nature of our relationship with the general community. Many people view themselves as involuntary taxpayers, rather than recognising the Ministry for Revenue as part of the community, collecting revenue on behalf of the whole community;

the need to rebuild public confidence in the Ministry for Revenue. Negative publicity over the last few years has weakened customer perceptions of the fairness and integrity of the revenue administration.

Our approach to administering the law is dependent on customers paying the correct amount of their own accord. It is therefore crucial that we continue to work closely with the community to redress these perception issues;

too many citizens regard it as socially acceptable not to comply with their obligations. This is demonstrated through the prevalence of tax evasion activities such as ‘cash jobs’ and commercial goods imported and declared as personal effects. Shifting public perception to understand that such non-compliance is not only illegal, but also against the good of the wider society, is central to maintaining the integrity of the revenue system.

Customer expectations Customers have always had clear expectations of the way in which they wish to deal with the Ministry for Revenue. Over recent years, their expectations of the public sector in general, might be summarised as ‘wanting better, fairer service at no increased cost’. This provides obvious tensions as we balance the need to manage customer service expectations with the need to enforce the tax laws. There is also a tension between the service expectation of customers, and the resources with which the Ministry for Revenue operates. Expectations include:

transactions to be made increasingly quickly and efficiently – customers expect that meeting their obligations will be relatively easy;

receiving personalised service, in a way that suits their needs; as with other government departments, that the Ministry for Revenue will operate frugally and

economically.

Changing nature of business – e-commerce Electronic commerce, or e-commerce, is revolutionising the way in which business and government is conducted. About 10 years ago an estimated $650 billion in worldwide trade was conducted through e-commerce, there were approximately 370 million internet users and 35 million domain names registered. In Samoa this has been less prevalent than overseas due to the high cost of technology access. As this cost reduces, the use of technology will rise and increasingly Samoan businesses will use the internet to buy and sell goods. With the growth in electronic commerce, and movement towards more sophisticated business practices, we need to ensure we:

provide options for those who wish to deal with us electronically; respond as flexibly and quickly as new business practices allow; maintain a focus on minimising the revenue risks associated with customers who choose to do

business over the internet.

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Increasing globalisation Samoa is a small economy affected by overseas economic trends, like trade conditions. Greater foreign ownership and corporate rationalisation continue to challenge the profile of businesses within Samoa. We need to ensure the integrity of the business license system is maintained so that only those legally permitted to run businesses in Samoa can do so. Globalisation affects both the commercial environment and how and where customers do business – even where they keep their business records. Samoa can often operate as a branch office and this can have an impact on where the tax management decisions are made and has obvious implications for business entities’ preferences to pay tax in certain jurisdictions. This growth in international trade and travel volumes, and increasing complexity of risk profiles have placed greater pressure on Samoa’s border management particularly in the case of money laundering.

Internal pressures impacting on the Ministry of Revenue In addition to – and sometimes in response to – external pressures, the Ministry of Revenue faces a number of internal pressures to which we need to develop appropriate responses, as set out below:

1. The design of business systems and processes – many of our systems and processes, while meeting business needs do not necessarily meet customers' needs. (For example, the issuing of business license and liquor license are conducted at different branches of the Ministry)

2. Technical accuracy and consistency – the Ministry of Revenue must provide technically accurate information to help customers meet their obligations. We need to be able to measure our performance in regard to technical quality. Our standard is rigorous – we require a contact to be correct, complete, clear, timely and appropriately referenced in order that it be deemed ‘technically correct’. The Ministry for Revenue needs to maintain a clear focus on this area. Customers should expect that when they contact the Ministry of Revenue, the information they receive is accurate and applied consistently. This extends to the full range of information available to customers – including guides, the website, booklets and other information products.

3. Increasing work volumes within fixed resources – over recent years, the Ministry for Revenue work volumes have continued to increase at a time of pressure on Government expenditure.

Summary of environmental issues The examination of our client base, and external and internal pressures, suggests that there are a number of environmental issues to be taken into account as we determine our future direction:

Within the customer base in the future there will be more small businesses and a higher proportion of self-employed – therefore creating a higher demand for our services.

Large enterprises and Government ministries and corporations will continue to be vitally important in collecting half of the total tax revenue through PAYE.

To maintain the integrity of the revenue system, the Ministry for Revenue needs to work to change customer attitudes towards tax, duties and the revenue administration.

To meet customer demands for better service the Ministry will need to ‘work smarter’, and use existing resources increasingly effectively. Unless the Ministry for Revenue is able to reduce the amount of work involved in tax and duty collection, the tension between increasing volumes and constrained resources will continue. Giving better service to customers will involve enhanced technical advice, simpler and more customer-friendly systems and processes, and simpler laws.

To meet customer demands and government expectations, engage with local, regional and international

organisations to strengthen skills and build capacity in order to maintain excellence in Customs

expertise; the task of assessing threats and risks at the border more challenging and requiring more

sophisticated approaches.

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CHAPTER FOUR: OUR FUTURE

As a result of the strategic planning process we defined our future aspirations. These are:

Customers meet all of their obligations of their own accord – and the Ministry for Revenue

makes this easy

Increasingly, the community regards paying tax and duties as contributing to society

The community views effective border management as important in protecting their way of

life

The community has confidence that appropriate action will be taken against those who do

not comply

We are internationally recognized for our effective facilitation of legitimate trade and cross-

border enforcement.

The community regards the Ministry for Revenue staff as professional, knowledgeable,

trustworthy and helpful.

Looking at the environment has shown some possible future trends and how they may affect the Ministry for Revenue. In particular, the emerging customer base will be different from the past – particularly in attitudes and expectations. Rather than just responding to the future, the Ministry for Revenue wants to change proactively, in a way that will realise opportunities and deal with risk. To work out how the Ministry could progress in this direction, the Ministry for Revenue first determined the principles against which to test strategic areas of work. This chapter therefore:

sets out key principles that are important in Samoa’s tax and customs system shows how the principles influence the way we will do business in the future; sets out the strategic areas we will focus on.

Key principles The following four principles guide the strategic direction of the Ministry for Revenue, and provide important reference points for future decisions. These principles are derived from Samoa’s tax and customs law and from an analysis of our current operation and environment.

PRINCIPLE ONE The Ministry for Revenue administers tax and customs legislation on behalf of all Samoans, for the good of all Samoans.

PRINCIPLE TWO The Ministry for Revenue administers the tax and customs regimes within the laws made by Parliament.

PRINCIPLE THREE The Ministry for Revenue will work with Samoans to make it simpler and easier to meet obligations of their own accord – aimed at reducing costs both for the community (compliance costs) and the Ministry (administration costs).

PRINCIPLE FOUR Samoans have varying tax and customs service needs, which require a range of responses.

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What these principles mean for the

Ministry for Revenue's strategic

direction Together, these four principles provide the context in which the Ministry for Revenue operates. They have significant implications for the way we view the business of tax and customs administration, and therefore our strategic direction. Principle one, relating to the administration of services for the good of all Samoans

has not been emphasised in the past; impacts how the Ministry for Revenue positions itself within Samoan society (The Ministry for

Revenue collects revenue and protects the border for Government, on behalf of all Samoans) because it:

o reminds us to involve the general community in understanding the importance of everyone meeting their obligations;

o anticipates that the Ministry for Revenue can expect general support for interventions that detect and deter non-compliance;

o ensures that the Ministry for Revenue places sufficient emphasis on understanding community needs and expectations with regard to tax and customs functions.

Principle one therefore suggests that as part of our future direction, we need to be more visible in the community managing relationships. Principle two points out that Government sets the legal parameters under which the Ministry for Revenue must operate. It also reminds us that if the Ministry wishes to influence the tax and customs system, an important way is through proactive advice to Government about the impacts of changing the tax law. Principle three, that the Ministry for Revenue will make it easier for Samoans to meet obligations of their own accord, relates to business activities the Ministry engages in to encourage and enable customers to comply voluntarily. For example, the Ministry for Revenue:

• informs customers of their obligations; • helps customers so that they are able to calculate their tax, duties and excise correctly; • ensures that customers know what to do if they have difficulty in meeting their obligations; • has sanctions in place for those who choose not to comply and discourages future

noncompliance. Principle four, that Samoans have varying tax and customs needs and require a range of responses, requires a more targeted approach from the Ministry for Revenue. It emphasises the need to understand customer’s circumstances in order to be responsive to those. Principle four suggests we should tailor our interactions in the future, rather than using a ‘one size fits all’ approach.

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A model for encouraging customer compliance The Ministry for Revenues future approach to encouraging voluntary compliance will make use of the following compliance model, developed by the Australian Taxation Office. This provides a framework for thinking about how the Ministry can most appropriately interact with customers.

The circle shows the world of the customer, and the factors that affect their decisions and behaviour. Compliance behaviour is influenced by many factors – business, industry, sociological, economic and psychological – all of which interact and influence whether a person chooses to meet their obligations. The triangle in the model shows, on the left-hand side, a continuum of customer attitudes towards compliance, depending on what is happening in their world. At the base of the continuum, customers have the desired attitude of ‘willing to do the right thing’. At the other extreme, customers have decided not to comply – they choose to evade or opt out of the system (individual customers over time also change position in the model, as factors affecting their attitude change). The right-hand side of the triangle shows the Ministry for Revenue's hierarchy of possible compliance responses. By understanding the factors that influence customer decisions and behaviours, and the range of attitudes towards compliance, the Ministry for Revenue is able to select the most appropriate response. The model shows that for the majority of customers who choose to pay the correct amount of tax on time, the provision of ongoing assistance will be the most helpful response to encourage continuing compliance. To keep customers at the ‘willing to do the right thing’ part of the continuum, actions begin with strategies like advisory visits, record-keeping tools and information. However, as we move up the continuum, from customers willing to do the right thing to customers who have decided not to comply, the strategies need to become more about keeping people on track with compliance. At the level of ‘assist to comply’ the Ministry might use reminder letters and phone calls to arrange debt repayments. Further along the continuum, for customers who have continued to be non-compliant after having been given reasonable opportunity to comply, actions increase in severity and rate of intervention. Examples might include audits, final notices and legal action. At the top of the continuum are the severest responses, used only for our most non-compliant customers. Examples of action at this level are prosecution and bankruptcy. The model, then, suggests that the Ministry for Revenue has the ability to influence customers behaviour, through the way in which we respond. And, rather than responding in the same way to all customers, we can distinguish among different sub-groups and tailor our response accordingly.

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For example, customers who ‘get it wrong’ will not necessarily always be non-compliant. We might want to distinguish between those who have filed late on one occasion, and those who file late consistently. If we react to non-compliance in a responsive, rather than overly punitive way, we can encourage future compliance, effectively moving customers ‘down’ the model. This is the Ministry for Revenue’s aim.

The Ministry for Revenue's future focus As has been discussed above, the four key principles not only underlie the Ministry for Revenues future direction – they also impact the Ministry’s strategic direction. This new emphasis, which will change the way we do business, are the themes of the Ministry for Revenue’s future direction:

• The Ministry for Revenue will be more visible in the general community, through managing relationships

• The Ministry for Revenue, where possible, will tailor interactions more, to suit the needs of different groups of customers, rather than using a ‘one size fits all’ approach – this will take into account the range of customer compliance attitudes and behaviours;

• The Ministry for Revenue will streamline its processes, aimed at reducing both compliance costs and administration costs

The change in emphasis has led to the strategic areas discussed below.

Strategic areas Four strategic areas form the strands of our strategic direction, and provide a framework for initiatives the Ministry for Revenue will implement during the next five years. They are set out below.

Strategic area one: Provide an excellent service to customers’ that meets their needs and

encourages them to comply

Customers can come to any MfR site and access either Customs or IRS services Customers can choose how they access our services – electronic, phone or counter and every

answer is consistent; Customers will have a clear understanding of their obligations and have certainty they are doing

the right thing; Customers will have confidence in the staff member they are dealing with and will not need to

escalate to a manager; Customers will have information about MfR made available to them.

Strategic area two: Understand our customers to promote compliance.

If we expect customers to meet their obligations voluntarily we must help them to do so. Helping them does not mean adding to a suite of general assistance measures. It means:

Understanding differences among customers, and tailoring both assistance and enforcement measures to suit the varied circumstances of different customers;

Developing a model to help Ministry for Revenue understand customer behaviour and cultural influence, so we use the right interventions at the right time;

Using a risk based approach for targeting non- compliance Working more closely with representative and community groups, and other organizations to

reach customers;

Strategic area three: Improve the processes, tools and legislation, systems and equipment

Our people have the right tools including legislation, information, easy-to-use systems and processes

such as;

Direct access to computers for staff who need them;

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Availability of technical information to support delivery of customer service; Simplified processes and information flows across the Ministry and the ability to easily identify

what stage in the process a customer’s transaction is at; Improved record management processes and systems; Updated legislation to ensure that we keep pace with the changing environment;

We will invest in our technology to maintain the integrity and sustainability of our systems and processes.

Strategic area four: Invest in our people to enhance our capability

Our staff will be well prepared and capable of implementing this plan by ensuring they:

Experience great leadership, with technical and people leadership being enhanced through career development and coaching;

Are proactively equipped with the right skills and experiences to do their current roles and to grow.

Are trained in critical skills such as legislative knowledge and core skills (customer focus, communication, trust and integrity);

Feel they belong to a passionate and engaged team who have clear goals and are valued for their ideas, contribution and recognized for their commitment to the values of the Ministry.

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The outcomes we seek

Linking outcomes to initiatives The table below shows how the strategic areas above and the initiatives within them contribute to the outcomes the Ministry for Revenue seeks. Strategic Area One: Provide an excellent service to customers’ that meets their needs and encourages them to comply

Outcomes we seek

Improve voluntary compliance Customers will have a clear understanding of their obligations Customers with similar circumstances are treated consistently Increase community confidence in the revenue administration Long-term sustainability of the tax and customs systems

Key initiatives to achieve outcomes

Ensure our services are accessible to customers through the introduction of new channels Review and document all Policies/Operational Statements that support the application of

legislation to ensure consistent treatment of situations Introduce a new community education program Enhance assistance for small businesses Tailor services for tax and customs agents Review the disputes/objection process

Strategic area two: Understand our customers to promote compliance.

Outcomes we seek

Customers are provided a targeted interaction that improves their compliance in a long term sustainable way

Efficient, effective collection of the highest net revenue over time Community confidence increases in our administration of tax, customs and border activities The on time filing and payment compliance is improved, with specific focus on our large

business customers Efficient and effective protection at the border

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Key initiatives to achieve outcomes

Introduce and embed the compliance model as the way the Ministry for Revenue manages compliance

Promote public presence of the Ministry for Revenue in the community Understand and influence customer behaviour and attitudes Expand the scope of debt, return and business license compliance activities Enhance audit activities (tax and post clearance audit and border) Increased disruption of illegal and illicit border activity

Strategic area three: Improve our tools, processes, legislation systems and equipment

Outcomes we seek

Make revenue collection more effective and efficient Minimise compliance costs Improve voluntary compliance Our laws keep pace with the changing environment both locally and internationally

Key initiatives to achieve outcomes

Make key internal processes simpler and timely for customers Simplify tax assessment processes and the collection of information from return processing Simplify tax processes for Employers Tax simplification for small businesses that earn below the VAGST threshold Modernise the Income Tax and VAGST legislation Modernise the Customs Act Modernise and integrate our Revenue Management and ASYCUDA technology Streamline and simplify trade facilitation processes

Strategic area four: Invest in our people to enhance our capability

Outcomes we seek

Staff competency increases in our critical skills such as legislative knowledge and core skills Staff engagement increases Staff productivity increases

Key initiatives to achieve outcomes

Invest in developing our leadership capability Develop competency profiles for each position within the Ministry Undertake training needs analysis and training programme Introduce performance management systems Measure staff engagement through annual surveys

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CHAPTER FIVE: OUTPUTS OUTPUT 1: POLICY ADVICE

Provide advice and direction for the ministry’s programs and initiatives.

OUTPUT 2: MINISTERIAL SUPPORT

Provide the Minister for Revenue with administrative and technical support services.

OUTPUT 3: TAXPAYER SERVICES

To provide efficient and effective customer tax services through the processes of issuing timely assessment notices, maintain & update registration database, disseminate timely and understandable information on tax obligations, tax amendments, together with tax advisory & educational services, so as to encourage and promote voluntary compliance.

OUTPUT 4: COLLECTION AND ENFORCEMENT

The efficient and effective collection of all outstanding debts and arrears due to the Ministry, overdue tax returns and late business license renewals.

OUTPUT 5: AUDIT AND INVESTIGATION

To ensure that Government receives the correct revenue by conducting audits and investigations on all taxpayers/registered persons tax affairs to verify the accuracy of their returns lodged, and to identify those non lodgers/filers, non compliers with the Tax Laws to ensure that they do pay tax as well as to encourage voluntary compliance.

OUTPUT 6: BORDER PROTECTION AND ENFORCEMENT

Responsible for the provision of border protection services through the effective use of risk assessment, re-screening information for processing the movement of goods and people and detect the movement of illicit, restricted goods and undesirable travellers

OUTPUT 7: TRADE FACILITATION

Responsible for trade facilitation through the effective use of risk management. Is an important component of a comprehensive strategy for national and regional development, and aims to provide an open regional platform to exchange information, experiences and practices for trade facilitation

OUTPUT 8: INTELLIGENCE AND ENFORCEMENT

Gathering of intelligence through risk management processing on the movement of people, goods & crafts at the border and, the auditing of the International Trade documents for Compliance.

OUTPUT 10: REVENUE DIVISION

To provide quality revenue collection to be more effective, efficient, transparent and accountable in administration of services relating to Customs and The Ministry of Revenue collections.

OUTPUT 11: EXCISE, WAREHOUSE AND LIQUOR ADMINISTRATION

Responsible for the effective and efficient administration of the import excise and domestic excise taxes, control of warehouses, and Liquor Board Administration.

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OUTPUT 12: LEGAL & TECHNICAL SERVICES

Provide advice, guidance and assurance of impartiality and consistency in the Ministry's application of Tax and Customs laws.

OUTPUT 13: INTELLIGENCE AND COMPLIANCE

Provision of post compliance auditing of imports clearance to collect the correct revenue due, and, the gathering of intelligence through risk management on the movement of people, goods, ships, and aircraft at ports of entry.

CSU 1 CORPORATE SERVICES

To provide efficient management of the Corporate & Quality Management Division’s functions through effective strategic planning, human resource management and development, budgetary and financial management and, procurement and asset management, so that outputs and associated functions of the Ministry are met.

CSU 2 INFORMATION TECHNOLOGY

To support the Ministry to better serve the public through the strategic use of technology and managing internal services for all divisions on process automation, providing information, connecting customers and the availability of IT tools.

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Linking our outputs to our outcomes

Outcomes

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Improve voluntary compliance y y y y y y y y

Customers will have a clear understanding of their obligations y y y y y y y

Customers with similar circumstances are treated consistently

y y y y y y y y

Long-term sustainability of the tax and customs system y

Customers are provided a targeted interaction that improves their compliance in a long term sustainable way

y y y y y y y

Efficient and effective protection at the border

y

Efficient, effective collection of the highest net revenue over time y y y y y y

Community confidence increases in our administration of tax, customs and border activities

y y y y y y y y

The on time filing and payment compliance is improved, with specific focus on our large business customers

y y

Make revenue collection more effective and efficient y y y y y y y

Minimise compliance costs y y y y y y y

Our laws keep pace with the changing environment both locally and internationally

y

Staff competency increases in our critical skills such as legislative knowledge and core skills

y

Staff engagement increases y

Staff productivity increases y

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CHAPTER SIX: IMPLEMENTATION PRIORITIES

This Corporate Plan is our five-year business plan which will however be ‘refreshed’ after two years to ensure the on-going development of our strategic focus. It represents an ambitious and comprehensive work programme that will take a number of years to implement. We have scoped the initiatives and prioritised them and initial work is already under way in a number of areas. We are now clearer about the areas that we are going to work on first. The priority initiatives are the ones that we believe will have the most significant and lasting impact on achieving our outcomes and getting to our future desired state. The priorities are focused externally on our clients, and also include improvements to internal capability that is crucial to stakeholders, for example enhancing technical capability. We intend to focus on large business as the focal point of our initial implementation of compliance improvement plan. Large enterprises are a critical part of the economy. Supporting and increasing compliance in large enterprises is essential to help provide timely revenue to Government to support their development goals. Making significant progress with large businesses will require a concerted approach across the whole organisation, as well as considerable external collaboration. In saying that, we will not lose focus of our small and medium sized businesses. We will have dedicated resources assigned to this group within the Ministry for Revenue to manage the high demands this customer group has. We will also introduce a new community education programme targeted at our small business customers. The areas in which we intend to make significant changes for our taxpayers and other clients are:

review our processes and forms to make it easier for customers to comply e-enablement of our services (tax and customs) for those customs with email or internet access review of the small business reporting requirements review of our debt collection activities and working with customers to facilitate debt repayment

options to suit their situation where possible modernisation of customs laws, procedures and processes and systems

Developing our people capability is critical to be able to achieve Our Future. A number of people capability initiatives are therefore included in our set of priority initiatives, in particular:

leadership development performance management and developing stronger staff-organisation relationships enhancing technical capability.