Systems of Revenue Collection Management

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Systems of Revenue Collection Management Role of Integrated Tax Administration Systems (ITAS) Presenter: Mike Coppin Mike Coppin & Associates 28 February 2017

Agenda Introduction Increasing Revenue Collection Findings of a Study into IT-based Tax Reform

Biography Former Senior Director and Global Lead for Public Financial Management (PFM) & Tax & Revenue Management (TRM) at Oracle Board Member of the International Consortium for Governmental Financial Management (ICGFM) Washington DC based organization Member of the World Bank FMIS (Financial Management Information Systems) CoP (Community of Practice) > 35 years IT experience > 20 years of Public Sector experience > 10 years of Tax & Revenue Management Systems experience

Increasing Revenue Collection Simplify Legislation Self Assessment Capability Improve Voluntary Compliance Improve Efficiency Improve Effectiveness Simplify Tax Administration Taxpayer Education Improved Business Intelligence & Analytics Enable Single View of the Taxpayer Better Risk Management Improved Audit Efficiency Reduce Compliance Cost Provide Self Service Functionality Automate Processes

Findings of a Study into IT-based Tax Reform in 13 diverse developing countries Source: Information Technology in Tax Administration in Developing Countries ITC & KfW Development Bank July 2015

Integrated Tax Administration Systems (ITAS) Efficient and effective revenue collection is a key driver for financing development and strengthening good governance. Information technology (IT) has the potential to improve revenue collection by automating processes, better servicing taxpayers and increasing compliance. ICT-reform activities are part of comprehensive tax reform programmes focussed on; taxpayer compliance increased revenue improved service delivery creating accountability, transparency and integrity

Observations in relation to available ICT-solutions Processes of tax administrations are basically similar, but in practice each tax administration develops its own processes - consequently there is no single ICT-solution that is capable of meeting the specific requirements of every tax administration. A logical step before procuring an ICT solution, is to redesign the processes that need to be computerised. The available functionality within ICT-solutions varies a lot - it is crucial that the requirements for the section of a product are based on the outcome of a high level business process redesign.

Observations in relation to available ICT-solutions The level of maturity of IT departments varies from very low to very experienced. However, in most of the analysed countries the maturity is far from sufficient. External consultancy services are required before and during the implementation of the ICT-solution. It is a widespread misunderstanding that the functionality of an acquired ICT-solution is the success factor in modernising a tax administration. Starting the reform with a well performed highlevel business process redesign will contribute to success of project.

ICT-solution & its impact on a Tax Administration Focus is often on the choice of the ICT-solution and not on the conditions that should be in place, to improve the chance of a successful implementation. It is important that the ICT-solution fits within the tax administration s strategy and the overall government strategy. Part of the selection of an ICT-solution provider is to agree how the provider s team will be integrated in the project. The budget and structure needed for the maintenance and postimplementation phase is often overlooked.

ICT-solution & its impact on a Tax Administration The time and effort needed for adequate change management is often underestimated. Change management entails more than providing a one-off training on the new application. It also involves creating commitment of internal and external stakeholders, future end-users and management. Change management process should start as soon as reform project is initiated. In the early phase, communication and interaction contribute more to getting the final solution accepted, than providing training in a later phase.

Overall conclusions and recommendations Lack of skilled staff capacity/needs assessments and skills audits should be undertaken Loss of trained resources introduce appropriate incentives to ensure trained staff remain within the tax administration Unrealistic planning detailed planning prior to system implementation Inaccurate information from legacy system the quality of existing data needs to be analysed before it is migrated Lack of funding for support and maintenance sufficient funding should be provided to support the system after implementation

Overall conclusions and recommendations Poor change management managing change correctly is key to the long term success of the ITAS Lack of business process redesign exercise business processes need to be reviewed alongside implementation of the ITAS Lack of established project structures implement the ITAS using a recognised project management methodology.

Get the Best Return on Transformation High Policy, People, Process & Technology Technology + Process Realisation of Business Benefits Technology Alone Technology + Bad Process Time Low

Thank You Mike Coppin Managing Associate Mike Coppin & Associates - IT & Public Financial Management Systems Consulting Phone: (Business) +27 (0) 21 851 0401 (Mobile) +27 (0) 799965578 (Skype) mike.coppin1 117 Oak Bridge Village Oak Bridge Drive Somerset West 7130 South Africa