Tax System Integrity in a digital Age 13 th International Tax Administration Conference Sydney Australia. VANUATU in FOCUS
OVERVIEW CATEGORY DETAILS Population Population growth rate 282,814 (July 2017 est.) 1.85% (2017 est.) Major cities - population PORT-VILA (capital) 53,000 (2014) Nationality noun: Ni-Vanuatu (singular and plural) adjective: Ni-Vanuatu Ethnic groups Ni-Vanuatu 97.6%, part Ni-Vanuatu 1.1%, other 1.3% (2009 est.) Languages local languages (more than 100) 63.2%, Bislama (official; creole) 33.7%, English (official) 2%, French (official) 0.6%, Other 0.5% (2009 est.) Literacy Definition: age 15 and over can read and write total population: 85.2% male: 86.6% female: 83.8% (2015 est.) Education expenditures 4.9% of GDP (2014)
The Republic of Vanuatu (English), (French: République de Vanuatu, Bislama: Ripablik blong Vanuatu), VANUATU OVERVIEW Vanuatu is a Pacific island nation located in the South Pacific Ocean. The archipelago, which is of volcanic origin, is 1,750 kilometres (1,090 mi) east of northern Australia, 540 kilometres (340 mi) northeast of New Caledonia, east of New Guinea, southeast of the Solomon Islands, and west of Fiji. Vanuatu was first inhabited by Melanesian people.
Vanuatu Geographical Location
Background Information on Tax Admin and the Digital Era. Like anywhere in the world, the significance and use of Technology in Tax Administration is on the rise. That also bring new opportunities as well as challenges in the work of Tax Administration. Major Sources of Revenue in Vanuatu are: Goods and Services Tax (Value Added Tax) @15% Customs Related Tax Inland Revenue Related taxes Non Tax Revenue (Fees and Charges / Fines / Penalties. Etc..) Vanuatu is yet to implement an Income Tax
Three Major Systems Used in Vanuatu for TAX ADMINISTRATION 1. ASYCUDA WORLD System - Managed and operated by Department of Customs and Inland Revenue 2. Revenue Management System (RMS by DATA TORQUE NZ) - Managed and operated by Department of Inland Revenue 3. FINANCIAL MANAGEMENT INFORMATION SYSTEM SMART STREAM Managed by the Department of Finance and Treasury together with all Ministries. Both 1 and 2 are managed by the Department of Customs and Inland Revenue Located within the Ministry of Finance and Economic management.
ASYCUDA WORLD Developed by UNCTAD (United Nations Conference on Trade and Developments). Used to administer Inland Revenue taxes. Has a financial system in build and also risk management capabilities The System is manned by Customs Officers (internal) and also has the Capability to allow Customs Brokers (External) to go on line. Other Departments such as the National, Statistics office and Trades dept. can also access data from the system. The United Nations Conference on Trade and Development (UNCTAD) goals are to: "maximize the trade, investment and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis."
Vanuatu Revenue Management System (RMS) Mainly used to Administer In Land Revenues namely: IMPORT / EXPORT DUTIES EXCISE TAX VALUE ADDED TAX Business Licenses Road tax Drivers Licenses
Vanuatu Financial Management Information System VFMIS (SMART STREAM) Mainly used to Administer Non Tax Revenue collected by Line Ministries and Departments The system is centrally managed within the Ministry of Finance and is also accessible to all Ministries.
New IT Systems that the Government will need to acquire. Income Tax The Government is most likely to give a go ahead for the implementation of Income Tax in 2019 Need a System for administrating Income Tax Common Transmission Standard (CTS) for OECD Global Forum Undertakings Need a system for this as well. Works are currently underway to secure a possible supply for the CTS system.
Existing policies on implementing Information Technology (IT) in tax Administration. Acceptable Use Policy Confidential Data Policy Email Policy Mobile Device Policy Incident Response Policy Network Security Policy Password Policy Physical Security Policy Wireless Network and Guest Access Policy
Challenges / problem and Strategies
Challenges Problem Effectiveness of digital technology Tax payers and Intermediate Interaction with Revenue Authorities Maintaining a good relationship with Tax Payers is Key for Vanuatu Success. That has resulted to a good revenue collected from existing Revenue initiatives. However a lot of business and individuals are still not lodging their returns on time. Tax Compliance and Compliance Costs Compliance generally has improved a lot but still needs to be strengthened VAT still recorded huge amount of outstanding's revenue due to the lack of Compliance and also funding required to carry out the job..
Challenges Problem Effectiveness of digital technology Information and Big Data management Current systems are able to secure and Manage data but again it will require qualified man power to do the task. Online Filing Can be done but needs a lot of trainings for Tax Payers. System can also be very expensive to purchase, establish and operate. Tax Collection Mostly Manual payments is still practiced. In the Islands it even worse due to remoteness of government centres where payment services could be done, which has resulted to complains lodge by tax Payers.
Challenges Problem Effectiveness of digital technology Others: Hardware upgrade lack the funds for hardware upgrade Software licensing e.g. Microsoft SQL license ( expensive) Human resources (ICT unit is short-staff so management of the RMS is always a challenge) Lack of knowledge on the Database structure for RMS unlike Asycuda World
Conclusion Vanuatu has gone through a lot of challenges and achievements to strengthened its effort in the use of modern IT system on Tax Administration undertakings. Authorities do acknowledged that there is still a lot that needs to be done System provider should be flexible to design systems that can be adjusted to suit local Context. Invest in systems that meets the need and are easy to use.