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  • Handbook for Tax Administrations

  • Handbook for Tax Administrations Organizational structure and management of

    Tax Administrations 2000

    Edited by:

    Matthijs Allink Victor van Kommer

    Inter-American Center of Tax Administrations

  • © 2000 Ministry of Finance, The Netherlands. Cover design: The Knowledge and Training Centre of the Dutch Tax and Customs Administration.

    ISBN 90 5458 893 4 NUGI 969 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Ministry of Finance.

  • CIAT Handbook for Tax Administrations - July 2000

    Foreword This is an unique product. A handbook written for and about Tax Administrations. With as main theme the Organizational Structure and Management of Tax Administrations. What’s so unique about that? After all much has been written about Organization and Management. Theory and practice. Whole libraries. But as far as I know, this book is the first attempt to give a systematic description of the structure and management of Tax Administrations. The first handbook focusing on the special organizations which Tax Administrations are. Pioneer work in this field. But that’s not all. This book is also unique for another reason. Certainly, two Dutch Tax Administration officials wrote the book, but first two international working groups conducted a thorough exploration of the themes. Input was provided by participants from many countries, in particular from the American continent. The result is a product made in a cooperative project with participants from societies that differ widely in tradition, culture, population make-up, economy and taxation. This book has primarily been written for members of CIAT, the Inter-American Center of Tax Administration. That’s why most of the examples in the book are derived from actual practice in South, Central and North American countries. CIAT took the initiative for this project. The Netherlands is still proud that we were asked to lead the project and do the editing of this book. I gladly gave my approval to that. It therefore gives great satisfaction that, following the interim presentation of the first part during the Technical Conference in Amsterdam in the autumn of 1998 – the handbook is now complete. I hope it will contribute to the further development of the world’s Tax Administrations. May it be received favorably and with a critical eye. Joop N. van Lunteren. (Till April 1st 2000 Director General of the Netherlands Tax and Customs Administration

  • CIAT Handbook for Tax Administrations - July 2000

    Foreword - CIAT In the past decade, we, at CIAT, have had the privilege of accompanying all the member countries in their efforts for carrying out significant initiatives in the tax field, such as legislative reforms, reengineering of the main processes, information systems and application of new technologies, among others. Specifically with respect to the Tax Administration, we may mention the implementation of significant reforms that sought, with varying levels of success, to institutionally strengthen and consolidate those Administrations as organizations capable of fully achieving their mission and objectives. On particularly examining the case of Latin American and Caribbean countries, one perceives progress in the rationalization of the normative framework and in the reengineering and computerization of operational processes. Nevertheless, in most of those countries, achievements in such key areas as organizational and managerial development are still incipient and undoubtedly constitute the great challenge of the XXI century. This manual is precisely intended to serve as reference, to facilitate the progress and modernization of the Tax Administrations of all our member countries, in those two areas, by analyzing and describing outstanding experiences in aspects precisely dealing with the organizational and managerial development of those Administrations. The organizations themselves must promote their adaptation to the new circumstances and their foreseeable future evolution, among other aspects, by affording their organizational structures greater flexibility whereby they may more timely respond, or even anticipate, the challenges of a markedly changing environment. Such adaptation should allow for improving the levels of productivity and effectiveness of the Administration. Modern organizational trends are based on more flexible, horizontal organizations, that easily adapt to changes and stimulate creativity and work in multidisciplinary teams.

  • CIAT Handbook for Tax Administration - July 2000

    In particular, there is the need to adapt the organizational structure to the new concepts of modern Administration, that define it as an organization servicing internal and external customers, dealing with such issues as the criteria for customer focused departments, the integrated administration of internal taxes, customs duties and collection of social security contributions, autonomy of the Administration and operational decentralization, among others.

    With respect to management of the Tax Administration, it must be noted that the existence of resources and their availability to be used, as well as sufficient legal powers for the performance of its functions could be considered as necessary tools for the effectiveness of the Tax Administration. However, these by themselves do not guarantee its managerial success. The application of all those elements calls for nothing else but efficient and effective management which, although it may feed from the general techniques on the subject, must be adapted to the particular circumstances of the Tax Administration’s activity.

    Continuous improvisation in the Tax Administration is against the basic requirements for efficient and effective performance. At the same time, even with planning, if the latter is not complemented with effective management control, for evaluating compliance and adapting to the procedures implemented to achieve the proposed objectives and goals, the fundamental instrument to provide feedback to the planning process itself will be missing.

    Strategic planning is a rather widely diffused technique among the Tax Administrations of the CIAT member countries. Nevertheless, the strategic plan adopted does not always fulfill one of its essential functions, which is to serve as reference framework for the elaboration of the general activities plan and, through the latter, to guide the elaboration of the operational plans for the different areas of the Tax Administration.

    There is one aspect, control, which is essential in management to provide feedback on the Tax Administration’s action, and allows for identifying the needs for adjustment to improve the levels of efficiency, ensuring whether the difficulties found in endeavoring to achieve the proposed goals and objectives, result from the lack of severity of the officials in applying such procedures and methods or from the inconsistencies of the latter.

    Finally, one of the fundamental aspects in management involves the development of its human resources, since the quality of the latter is ultimately

  • CIAT Handbook for Tax Administrations - July 2000

    important for the use to advantage of any progress achieved in terms of organization, procedures, technology or greater availability of financial resources.

    To promote the professionalization of the Tax Administration’s human resources, in a technical as well as ethical sense, several actions should be considered, all framed within an explicit and systematized policy that may mainly cover such aspects as administrative career, compensation and training.

    By way of conclusion, we would like to note that the Tax Administration must be understood as an open organization, with a strategy that may respond to the application of a very complex tax system in speedy and continuous change, particularly resulting from globalization and digitalization and whose main objectives are to satisfy society’s increasing demand for high quality services and to provide the financial resources for the State´s action in favor of common welfare. Achievement of these objectives is closely related to the progress that may be attained in the organizational and managerial development of the Tax Administration.

    We would like to express our appreciation to the Tax Administration authorities of the Netherlands, whose generous contribution on sponsoring and coordinating the Working Group for the elaboration of this Manual, has made it possible to count on a valuable support element to promote the improvement of the Tax Administrations of our member countries.

    CIAT Executive Secretariat

  • CIAT Handbook for Tax Administrations - July 2000

    Justification This publication is the result of an intensive collaboration between a number of countries from Latin and North America; the Netherlands was delighted to direct the collaborative process. The intensive contact of managers and policy makers from the various member states of the CIAT organization laid the fertile foundations for this book. The collaboration took place in the form of two working groups; the first focused on the organi