revenue case study sean connolly
TRANSCRIPT
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Transforming a Large Organisation
- the successful experience of the Irish Revenue Commissioners
IPA October 2008
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Topics:
The Revenue Business
Transformational Change
What have we learned?
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IPA October 2008
By three methods we may learn wisdom:
First, by reflection, which is the noblest;
Second, by imitation, which is the easiest;
And third, by experience, which is the bitterest.
Confucius
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•Citizen/Customer
•Organisation Member
•Domain/ICT Expert
•Public Servant Reformer
Perspectives?
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Tax Collection
Key function in organised society As old as time Unpopular Customers?
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Apples +10% Vat
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Fair?
Efficent?
Complexity?
Impact on the market?
How much?
Compliance Costs?
Evasion?
Deterrence?
Redistribute Wealth?
The perfect tax system?
Certainty?
Convenience?
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“Excise ….a hateful tax levied upon commodities and adjudged, not by the common judges of property but by wretches hired by those to whom the Excise is paid.”
Samuel Johnson’s Dictionary 1755
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The Revenue Story
The old Revenue Why did we change? What did we do? Impact on our Customers? What could be of value to you?
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Revenue in the 1990s“If it ain’t broke don’t fix it”
Good track record Annual collection targets exceeded Successes
Good computer systems Self assessment for the Self Employed 1992 Single Market Relocation of 1,300 staff from Dublin
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Pressures Customer Service concept Our “captive market” was changing Greater Business sophistication & wealth
creation Increasing evidence of non-compliance Public expectations increasing with economic
growth Speed of change in environment Technology opportunities
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Restructuring – where it started
Statement of Strategy 1997 – 1999
“a root and branch review of our organisational structure… to ensure … the best possible fit between how we organise ourselves and our strategy to improve overall effectiveness and efficiency.”
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Incoherent
Claims, reliefs,allowances,
entitlements, etc.
Claims, reliefs,allowances,
entitlements, etc.
VRTVRT
CROCRO
Tax ClearanceTax Clearance
VATVAT
PAYE / PRSIPAYE / PRSI
Returns (All)Returns (All)Income Tax
Income Tax
CorporationTax
CorporationTax
Start up VisitStart up Visit
CertificationCertification
PaymentsPayments
RefundsRefunds
InspectionInspection
Admin. PolicyAdmin. Policy
ExciseLicence
ExciseLicence
CG’sCG’s CI’s
CI’sLocal Coll.
Local Coll.Nenagh
NenaghCustomHouse
CustomHouse
P35’sP35’s
TFA’sTFA’s
PaymentsPayments
EFTEFT
CI’sCI’s
CG’sCG’s
Local Coll.
Local Coll.
EnforcementEnforcement
EnforcementEnforcement
CG’sCG’s
LocalColl.
LocalColl.
EnforcementEnforcement
Same as for VAT
Same as for VAT
Vat RefundVat Refund
BIKBIK
CI’sCI’s
CG’sCG’s
C&EC&E
CI’sCI’s
Taxpayer(e.g. Publican)
Taxpayer(e.g. Publican)
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Stam p Duty
CapitalTaxes
Em ployersPAYE
Custom s &Residence
Paym ents
CollectorGeneral
Com m issioner
Custom er serviceCom pliance
AuditEnforcem ent
ChiefInspector of Taxes
CI
Custom s &Excise
Custom s &Excise
InterpretationIncentives
Policy &Legislation
Com m issioner
Chairm an
How we saw a Customer
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How we administered the country
6 different administrative maps Tax Districts Customs Collections Excise Districts Collector General’s
Bailiwicks Revenue Mobile
Service Regions Local Collection
Regions
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CustomersCustomers
East & South East Region
South-West Region
Border Midlands West Region
DublinRegion
Before After
Taxes & Duties / functional Taxes & Duties / functional hybridhybrid
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Coherent
Taxpayer(e.g. Publican)
Taxpayer(e.g. Publican)
Revenue District
Revenue District
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County
Region
Com m issionerOperations
Chairm an
Stam p Duty
CapitalTaxes
Em ployersPAYE
Custom s &Residence
Paym ents
CollectorGeneral
Com m issioner
Custom er serviceCom pliance
AuditEnforcem ent
ChiefInspector of Taxes
CI
Custom s &Excise
Custom s &Excise
InterpretationIncentives
Policy &Legislation
Com m issioner
Chairm an
Before After
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What the boss wants…
“When I have a problem I want to see the whites of one pair of eyes, not twenty pairs of heels”
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Strategic PlanningStrategic Planning
Human ResourcesHuman Resources
ICT and eBusinessICT and eBusiness
Operations Policy & EvaluationOperations Policy & Evaluation
Investigations & ProsecutionsInvestigations & ProsecutionsInvestigations & ProsecutionsInvestigations & Prosecutions
Revenue SolicitorRevenue Solicitor
Chairman
Commissioner Commissioner
Chairman
Commissioner Commissioner
Collector GeneralCollector General
CustomsCustoms
Direct Taxes Policy & LegislationDirect Taxes Policy & Legislation
Direct taxes Interpretation & Internationall.Direct taxes Interpretation & Internationall.
Indirect TaxesIndirect Taxes
Border Midlands West RegionBorder Midlands West Region
Dublin RegionDublin Region
East South-East RegionEast South-East Region
Large CasesLarge CasesLarge CasesLarge Cases
South-West RegionSouth-West Region
Divisions & Reporting Relationships
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Customer Service
Lo-call phone service Tax Credits replaced Tax Allowances Tax Credit at Source Website [www.revenue.ie] Texting Tax Briefing Bulletin for Practitioners Better Public Offices
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Belastingdienst The Dutch Tax & Customs Administration’s motto
We can’t make it pleasant, but we can make it easier.
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The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers, with the smallest possible amount of hissing. -- Jean-Baptiste Colbert
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RegistrationRegistration
ReturnsReturns
AssessmentAssessment
CollectionCollection
Caseworking/Intervention/Management InformationCaseworking/Intervention/Management Information
PAYE/PRSIEmployers
PAYEEmployees
Value-AddedTax
IncomeTax
CorporationTax
Others >
Common functions across taxes
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Registration
Returns
Collection
Assessment
InterventionManagement
MIS
Registration
Returns
Collection
Assessment
InterventionManagement
MIS
Registration
Returns
Collection
Assessment
InterventionManagement
MIS
Tax 1
Tax 2
..Tax n
From multiple disparate systems
Still have to cater for certain individual tax characteristics
Tax 1 Tax 2 ..Tax n
Old systems – would havehad to be replaced individuallyin any case
CRS
ITP
AIM
CIF
ROS
To a single integrated framework
Common Registration
Common Returns, Collection etc
Common Caseworking
Common Business Intelligence
…then Internet enabled
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What the caseworker sees
Technology enabled a unified view of the customer
All the customer’s tax and duty information is brought together
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IPA October 2008
…...whether dealing withtransactions, case-working,doing analysis, or looking up registration details
Provides consolidated customer view
at all times
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Advances in Technology
The possibilities exceed our imagination
The Internet Mobile communications Information Society Fund
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How was it achieved?
Studies of best practice by a small team Management commitment built on
consensus Communication with internal customers Consultation & involvement: pilot
projects Determination to overcome obstacles
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IPA October 2008
The Pilot Project
Norman Gillanders, Assistant Secretary
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Restructuring – the Players Project Board with overall responsibility for
organisation restructuring. Management Roadshows Project Teams and Regional Committees plan,
design and implement new Divisions. Focus Groups and Expert Groups facilitate
wider participation. Consultation and communication at every step
in the process. Bulletins/Gateway
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Restructuring – The Process
Spring 2001
Spring 2003
PlanPlan
High-Level DesignHigh-Level Design
Project BoardProject Board
Detailed DesignDetailed Design
Project BoardProject Board
Implementation PlanImplementation Plan
Project BoardProject Board
ImplementationImplementation
Com
mu
nic
ati
on
Con
su
ltati
on
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Industrial Relations
Single Grading Structure: very desirable Reclaimed the ‘Radio Station’
Briefing sessions Hotline for queries FAQ service Full text of agreement available
Integration initially accepted by 4 of the 5 unions
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But getting there is difficult
It’s like changing the wiring of your house while keeping the lights on
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Why change?
“An organisation that doesn’t change at the same speed as its environment dies”
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Total arrears as % of total gross receiptsTotal arrears as % of total gross receipts
0
5000
10000
15000
2000025000
30000
35000
40000
45000
50000
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
Am
ou
nt
(€m
)
GrossReceipts
Arrears
decline in arrears:from 37% to 1.9% in 2007
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“We trained hard….but everytime we formed up teams we would be reorganised. I was to learn that we meet any new situation by reorganising. And a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation”
Petronius Arbiter, 22-66 A.D.
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For the good citizen: • a better service/single point of contact
• greater equityFor the tax dodger:
The Results?
• a real probability of detection and punishment
For Revenue:
• more efficient and flexible organisation • new vigour and excitement
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To tax and to please, no more than to love and to be wise, is not given to man
Edmund Burke, On American Taxation, 1775, Graduate of Trinity College, Dublin.
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IPA October 2008
Analysis of our Experience
Any useful lessons for you?
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Lessons Get a clear and shared vision Take the customer’s perspective Communicate, communicate, communicate ICT can be a facilitator and not a barrier Learn from other’s experience Use Pilot projects Fix a date Recognise the barriers:
Culture Self interest/power
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Causes of Change
New demands Environment Workforce Structure Technology
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Managing Organisation Change
Elements Tasks Individuals Formal Organisation Arrangements Informal Organisation
Problems Resistance Control Power
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Task
Structure
Culture/Reward Mechanisms
Process
Individuals Technology
ICT
Strategy Output
Organisation Framework
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Strategy
Business: Shareholder value Win/keep profitable
customers Competition
Public Service: Political Agenda – short
term Public Interest Minimise risk
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Specific individual behaviour at work is as likely to arise from the nature of the role which the individual occupies, its relation with other roles, and with the entire structure of the social system within which that role is positioned, as from the personality of the individual – Wilfred Brown, Organisation, 1971, p.23
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Culture
• Task vs Role• Caution• Written analysis• Hierarchical Control• Precedents• Risk versus rewards
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Openness, frankness, genuine disclosure of objectives and of information works well in a pure task culture but they can put one at a big disadvantage in interactions with the more bargaining approach of the role or power culture
- Handy, p. 244
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ICT Architecture
First Computer installed in 1963 ICT is indispensable Growing range of skills needed
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Technology
• The limit is our imagination • Organisation design is from the
days of quill pen and no communications
• Self service is the ideal• 24x7is the norm• New challenges: security,
complexity, mobility, access
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Transition
The temporary process of getting from the current state to the future state.
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How it isHow it is How we want it to be
No mistakes
Rational
Certain
Permanent
Based on precedent
Equitable/fair
How we want it to be
No mistakes
Rational
Certain
Permanent
Based on precedent
Equitable/fair
When two worlds collide!
InnovationInnovation
RiskRisk
RewardsRewardsWin/loseWin/lose
Try again!Try again!
FailuresFailures
Chance?Chance?
How it is How we want it to be
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Laying the Foundation Stones•VAT assigned to Chief Inspector/Collector-General
• Commission on Taxation
•IMF Visit Dec 1986
•Self Assessment 1989/90: Press Office : New Board’s Report
•Data Study Dec 1989
• Integrated Taxation Proposal 1990
•Common Registration 1996
• The Dirt Enquiry
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IPA October 2008
How can you win?
The Common Herd being wise after the event will say either:
”How easy, why think twice about so obviously correct an operation”
or will say: “Criminal idiots to attempt the
impossible”
-General Sir Aylmer Hunter Weston, 29th Division, April 1915, before the Gallipoli Campaign
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“It is not the strongest of the species that survives, not the most intelligent, but the one most responsive to change”
Charles Darwin
“An té nach bhfuil láidir, ní foláir do bheith glic”
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IPA October 2008
Questions?
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IPA October 2008
SAQ 5
Have you experienced any changes in your dealings with Revenue?
Have services improved or deteriorated?
What remains unchanged? Any signs of technology?