BUILDING EFFICIENT TAX
ADMINISTRATIONS TOWARDS
PROMOTING NATIONAL &
REGIONAL DEVELOPMENT
20TH General Assembly and
Technical Conference of COTA,
Belize City, Belize, July 21-24 2008
Measuring Staff Performance
and Evaluation of Performance
in a Modern Tax System
2
Three main areas of
examination
1. Criteria for a modern tax administrative
system
2. Evaluation of a tax administration system
3. Measuring staff performance within a
modern tax administrative system
3
What makes a tax
administrative system modern?
• Does one exist and if it does what does it
look like/what are its features
• Several studies have been done to
determine this state
4
Criteria used to determine a good
administrative system
•
•
•
•
•
Level of automation
Integration of data – especially with Customs
Management accountability
All operations places the taxpayer at the centre
Staff readiness to deal with the taxpayer –
Training
• Willingness to benchmark with leaders in tax
administration e.g. New Zealand, Canada
5
Primary Goal of a tax
administrative system
•To ensure compliance with tax laws
6
Compliance areas (within the
Jamaican system)
Promoting voluntary compliance becomes
a primary concern – dependent on:
•How TA interact with taxpayers
•How employees impact public perception
of the tax system
7
Additional compliance areas
• Ease of payment
• Enforcement - Identification of noncompliance risks
8
Evaluating a Tax Administration
• In evaluating a tax administration one
must evaluate the achievements of the
strategic direction/goals of the
organization and other subsidiary
performance related indices
9
STRATEGIC DIRECTION
Strategic direction guided by :
(a) Road Map
(b) Strategic Plan –aligned to road map
10
The Road Map’s Conceptual Framework
A TAX COMPLIANCE MODEL
•Extend to Marginalized
•Recognize Mutual Obligation (rights and
obligations)
•Lower Compliance Burden (quality of
service, ease of payment)
•Visible (Field Work)
•Firm yet Fair
•Risk-based
Knowledge and
Understanding
of the Environment
EDUCATION
•Share Information
•Build a Culture of Compliance
•Increase Knowledge of Obligations
In analysing our compliance risk factors, we will examine
the various forms of Taxpayer Behaviour which result in:
Failure to
Register
Failure to
File Returns
Failure to
Properly Report Tax Liabilities
and
Failure to
Pay Taxes When Due
12
Compliance Strategy based on Attitude
ATTITUDE TO COMPLIANCE
COMPLIANCE STRATEGY
High
Have Decided Not To Comply
Use The Full Force Of The Law
Do Not Want To Comply But Will If
Given Due Attention
Enforce By Detection And
Action
Try To Comply But Do
Not Always Succeed
Consistently Succeed In
Complying
Assist In Complying
Strategies Aimed at Creating
Downward Pressure
Low
Make It Easier To
Comply
13
Strategic Objectives
Tax Administration
Collect the Revenue Due
EFFICIENCY
(Cost of Collecting)
IRD
TAAD
TASD
EFFECTIVENESS
(Equitable Collection Systems)
Improve Compliance
Service
Education
Enforcement
Improve Information and Communication
Technology Processes
Improve Organization and Management
CD
TAD
ODG
14
Compliance Objective
Tax Administration
Collect the Revenue Due
EFFICIENCY
(Cost of Collecting)
EFFECTIVENESS
(Equitable Collection Systems)
IRD
TAAD
•Taxpayer Audit
•Taxpayer Assessment
•Audit Selection & Review
•Audit Services
•Excise Operations
•Tax Fraud Investigation
•Compliance (SD&TT)
•ESOP, Superannuation Funds
& Exempt Orgs. Review
•Refund Processing
•Objections Processing
•Taxpayer registration
•Cashiering
•Taxpayer Service
(SD&TT)
•Payment Facilitation
•Returns Processing
•Taxpayer Assistance/
Education
•Legal Support Services
•Litigation
•New/Amended
Legislation
•Taxpayer Registration •Physical Environment
•Taxpayer Registration
•Public Education
•Public Relations
•Public Surveys
•Tax Help
TASD
•Taxpayer Education
•Tax Admin Website
•Office Compliance
•Field Compliance
•Investigations
•Street Surveys
•Taxpayer Accounts
CD
•Taxpayer Service
•Cashiering System
•“Floor walking”
•Forms Completion
•Taxpayer Accounts
•Taxpayer Education
•Taxpayers Surveys
•Payment Facilitation
Improve Compliance
Service
Education
Enforcement
•Integrated Research
•International Relationships
•Integrated Strategies
•Integrated Projects
•Auditing
•Enforcement
•Line Officer
•Risk management •Operations
•Surveillance
•Cashiering
•“Floor walking”
•Forms Completion
•Trade Facilitation
•Taxpayer Education
•Taxpayer Surveys
•Payment Facilitation
•Agency Contact
•Integrated Research
Findings
•Integrated Strategies
•Integrated Projects
•Professional Hearings
•Service Standards
•Independent & Professional
Case Judgement
ODG
•Investigation/Review of Waiver
Applications
TAD
15
Technology Objective
Tax Administration
Collect the Revenue Due
EFFICIENCY
(Cost of Collecting)
TAAD
• ITSTS
• GCT Registration
& De-Registration
• Classification
• Audit
• Audit Review
• Assessment
• Valuation
• Business Process
Re-engineering
• Refunds Processing
Objections
• Returns Processing
• Expenditure Accounting
• Revenue Accounting
• E- Transactions/
Payments
• ESOP
• Superannuation
• Exempt Organizations
• Valuation
• Cashiering
• Tax Fraud Investigations
• ITSTS
• Administrative Systems
(including HRMIS, document
Management, Procurement,
Inventory)
• Taxpayer Data Base- TRN
System
TASD
• Legal IS
• Expenditure
Accounting
• Business Process
Re-engineering
• Intranet
EFFECTIVENESS
(Equitable Collection Systems)
IRD
• Refunds Payment
• ITSTS
• Cashiering
• AMVS
• MV Title Processing
• Driver’s Licence
• Property Tax
• TCC
• TRN
• Business Process
Re-engineering
Processing
• Compliance
• Taxpayer Accounting
• Fact of Filing
• Fact of Registration
• Expenditure
Accounting
• E- Transactions/
Payments
• ITSTS
• Cashiering
• Risk Analysis
• Brokers
• Manifest
• Import Processing
• Export Processing
• Auditing
• Warehouse Operations
• Business Process Reengineering
CD
• Passenger/Baggage
Processing
• Refund Processing
• Expenditure Accounting
• Revenue Accounting
• E-Transactions/ Payments
Improve Information and Communication
Technology Processes
• ITSTS
• ICT Policy
• Tax Revenue
• Tax Base
• Computerized
Integration of Core
Systems (ICTAS)
Business Process Reengineering
Business Intelligence
System
•ITSTS
•Waiver Information System
•Business Process Re-engineering
Directorate-wide Internal
Electronic Communication
ODG
TAD
ITSTS Internal Technical & Service Tracking System
16
Organization and Management Objective
Tax Administration
Collect the Revenue Due
EFFICIENCY
(Cost of Collecting)
Issues Common to all
Departments
HR Plan
• Right-functioning/role
clarification and
Integration
• Right sizing
Core Activity Training
• Job rotation
•Orientation
• Career development
•Audit
• Performance
•Assessment
management
•Valuation
• Quality review
•Tax Fraud Investigation • Supervision
•Returns Processing
• Strategic and annual
•Audit Services
plans
•Cashiering
• Integrated planning and
control
•Registration
• Job evaluations and
•Risk management
descriptions
• Space Management
Core Activity Training
• Orientation (Tax
Admin, TASD)
Issues Common to all
• “Across Departments”
Departments
• Supervisory
• General Management
• Training Systems
• Training of Trainer
• Taxpayer Registration
(Equitable Collection Systems)
IRD
TAAD
TASD
EFFECTIVENESS
Core Activity Training
• Orientation
• Compliance Officer
• Taxpayer Accounting
• Taxpayer Service
Collections
• Cashiering
• Revenue Accounting
Issues Common to all
Departments
Core Activity Training
• Orientation
• Line Officer
• Cashiering
• Auditing
• Cargo Processing
• Passenger/Traveling
Processing
• Warehouse Operations Issues Common to all
and standards
Departments
• Investigations
• Foreign Languages
CD
Improve Organization and Management
• HRM policy
• HR plan (Tax Admin)
• Staffing control
• Code of Conduct
• Operations oversight
• Performance incentive
scheme
• Executive management
development
• HRM oversight
• Career paths
• Classification equity
• Functional integration
• Branding of Tax Admin
• Space planning policy
Issues Common to all
Departments
ODG
Core Activity Training
•Orientation
•Appeals Officer
Issues Common to all
Departments
TAD
17
• Identify critical areas of success and set
targets
• For consistency track targets over a
period of time
18
Developing the strategic direction
within the Jamaican Tax
Administration
Key terms
• Road Map
• Strategic/Corporate Plan
• Operational Plan
• Performance management system
19
Evaluation of Tax Administration
Performance
•
•
•
•
•
•
The reporting process – monthly and quarterly
Structured format for data capture
Template used throughout departments
Written analysis of data accompany report
Reports signed by respective Commissioners
Quarterly stand-up reviews
20
Evaluation of Tax Administration
Performance
• Weights are applied to outputs
• Need for more than 1 measure of
performance
21
Measuring Staff Performance
22
Some Criteria for an Effective
Staff Appraisal System
• Staff performance must be aligned to the
strategic objectives of the organization
• Must be timely and consistent
• Must be objective and transparent
23
Measuring staff performance
within the Jamaican Tax
Administration
• Each operational plan has a measurable
component
• Individual plans have key results areas
(KRA’s) which are aligned to unit plans
• Additional indicators discussed within
departments
24
Performance Appraisal System
• Starts by identification of deliverables in
departmental plans
• Development of Section/Unit plans and
then individual plans
• KRA’s taken from individual workplans
plans and form the base of the
performance appraisal document
25
Performance Appraisal System
• Performance target are discussed jointly with
Supervisor and desired results identified.
• Performance plan has five parts
–
–
–
–
–
KRA’s
Employee Performance Factors
Supervisory Performance Factors (where necessary)
Performance Consequences
Training and Development
26
Performance Appraisal System
• 2 reviews done annually – interim 6
months and end of year
• Overall score assigned
• Standard set –at least 85% of staff obtain
70% or more on PER
27
Link with Organizational
Performance
• Template developed to align staff
performance with that of the departments
28
29
Strengths of the System
• Incremental improvements in
organizational review process
• Increased communication to staff
members
• Some aspects of data collection is done
• Reliance on data from ICTAS
(development of data warehouse)
30
Strengths of the System
• Willingness to benchmarking to try to
improve on adequacy of measures
• Quality assurance mechanism embedded
in process
31
Weaknesses of the system
• Inconsistent and insufficient data collection
• Inadequate feedback
• Lack of in-depth analysis of trends to
adequately inform the decision making
process
• Lack of soundness/adequacy of measures
32
Weaknesses of the system
• Insufficient Communication
• Timing – completion of strategic direction,
completion of PER’s
• Insufficient documentation of reports
• Inconsistencies – No sanctions for
department failure but sanctions for
incompletion of PER’s
33