Tax Administration Diagnostic Assessment Tool MODULE 11 “POA 9: ACCOUNTABILITY AND TRANSPARENCY”

Tax Administration Diagnostic Assessment Tool

MODULE 11“POA 9: ACCOUNTABILITY AND TRANSPARENCY”

Desired Outcome of POA 9

The tax administration is :transparent in the conduct of its activities, and accountable to the government and the community.

Background

• Accountability and transparency are the two central pillars of good governance. Their institutionalization reflects the principle that tax administration should be answerable for the way they use public resources and exercise authority.

• To enhance public confidence and trust, tax administration should be openly accountable for its actions within a framework of responsibility to the minister, legislature and the general public.

International Good Practice in

Accountability and Transparency POA 9

External oversight of the tax administration’s financial and operational performance by

parliament and supreme audit body

Independent and impartial investigation by an

ombudsman or equivalent

Regular reporting to senior management of actions on

recommendations of ombudsman and anti-

corruption agency

Embracing ethical standards and procedures to prevent

misuse of office Internal controls to

protect the systems from fraud and error

Internal audit ensuring adherence to internal control,

risk management and governance framework

Internal mechanisms to formulate and execute

integrity/ethics policy and investigate misconduct

Engagement of citizens through stakeholder

consultation and client surveys

Performance Indicators: P9 – Accountability and Transparency

Dimensions

High Level Indicators

P9-25: Internal assurance mechanism

M2

The level of assurance

provided by internal

audit

Staff integrity assurance

mechanism

P9-26: External oversight of tax administration

M2

Extent of independent

external oversight of

the tax agency’s

operations and financial

performance

The investigation process for suspected

wrongdoing or mal-

administration

P9-27: Public perception of

integrityM1

The mechanism

for monitoring public

confidence in the tax

administration

P9-28: Publication of activities, results and plans

M2

Extent to which the

financial and operational

performance of the tax

administration is made

public, and the timeliness of publication

Extent to which tax

administration’s future

directions and plans are

made public, and the

timeliness of publication

Scoring P9-25-1: Level of assurance provided by internal audit

A

The tax administration has an independent internal audit

unit reporting directly to the audit committee

There is a central repository of all internal control policies,

processes and procedures

Annual internal audit program comprise of internal control checks, performance audits, IT systems audit

and financial audits for all key operations.

- All individual interactions are traceable to individual users and

internal audit has skills to identify inappropriate actions

- Reports on security incidents are available

There is regular training of internal auditors in audit

methodologies

Systematic and independent review of internal audit operations

and systems at least once every five years


B

The tax administration has an independent internal audit unit reporting directly to the head

or board

There is a central repository of all internal control policies,

processes and procedures

Annual internal audit program comprise of internal control checks, performance audits, IT systems audit

and financial audits for all key operations. - All individual

interactions are traceable to individual users and

internal audit has skills to identify inappropriate

actions - Reports on security

incidents are NOT available

There is regular training of internal auditors in audit

methodologies

Systematic and independent review

of internal audit operations and

systems at least once every seven years


C

The tax administration has an independent internal audit unit reporting BUT does not report directly to the head

or board There is NO central repository of all internal control

policies, processes and procedures

Annual internal audit program comprise of internal control checks,

and financial audits BUT NOT performance audits, IT systems audit

- All individual interactions are NOT traceable to

individual users and internal audit DOES NOT HAVE skills

to identify inappropriate actions

- Reports on security incidents are NOT available

There is ad hoc training of

internal auditors in audit

methodologies

Some systematic and independent review

of internal audit operations and

systems done once in the last ten years

Scoring P9-25-2: Staff integrity assurance mechanisms

A

The tax administration has an independent internal affairs unit reporting directly to the head or

deputy head. The internal affairs unit:* Has appropriate investigative

powers, and exercises these powers with due process.

* Provides leadership to the formulation of integrity and

ethics policy, including codes of conduct.

* Cooperates with relevant enforcement and prosecution

agencies.

Maintains integrity-related statistics for the agency, while

preserving confidentiality.

* The integrity statistics are publicly reported.


B

The tax administration has an independent internal affairs unit

reporting directly to the head or deputy head.

The internal affairs unit:

* Has appropriate investigative powers, and

exercises these powers with due

process.

* Provides leadership to the

formulation of integrity and ethics

policy, including codes of conduct.

* Cooperates with relevant

enforcement and prosecution agencies.

DOES NOT maintain integrity-

related statistics for the agency,

while preserving confidentiality.

* The integrity statistics are NOT publicly reported.


C

The tax administration has

an independent internal affairs unit

BUT DOES NOT report directly to

the head or deputy head.

The internal affairs unit:

* Has appropriate investigative powers, and

exercises these powers with due

process. * DOES NOT

provides leadership to the

formulation of integrity and ethics

policy, including codes of conduct.

* DOES NOT Cooperates with

relevant enforcement and

prosecution agencies.

DOES NOT maintain integrity-

related statistics for the agency,

while preserving confidentiality.

* The integrity statistics are NOT publicly reported.

Scoring P9-26-1: The extent of independent external oversight of operational and financial performance

A

Annual external audit of the tax administration’s

financial statements by an external review

body government auditor or other

independent entity)

Annual program of operational

performance audits by an

external review body (e.g.,

government auditor)

External review findings are

responded to by the tax

administration

External review findings and the response of the

tax administration or ministry of

finance are publically reported


B




independent entity)

Annual program of operational



government auditor)



administration



finance are NOT publically reported


C




independent entity)

NO program of operational



government auditor)



administration



finance are NOT publically reported

Scoring P9-26-2: Investigation process for wrongdoing and maladministration

A

A tax ombudsman investigates unresolved

complaints from taxpayers. Systematic service and

fairness problems are

reported to the minister.An anti-

corruption agency oversees

tax administration anti-corruption

policies and investigates

alleged corrupt conduct

There is regular (i.e., monthly) and systematic monitoring to

senior management

and reporting of actions taken in

response to recommendatio

ns of ombudsman or

anti-corruption

agency.

Scoring P9-26-2: Investigation process for suspected wrongdoing and maladministration

B

A tax ombudsman investigates

complaints from taxpayers. Systematic service and

fairness problems are

not reported to the tax

administration and government

.An anti-corruption

agency oversees tax

administration anti-corruption

policies and investigates

alleged corrupt conduct

There is regular (i.e., monthly) and systematic monitoring and

reporting of actions taken in

response to recommendatio

ns of ombudsman or

anti-corruption.

Scoring P9-26-2: Investigation process for suspected wrongdoing and maladministration

CA tax

ombudsman or equivalent

authority exists BUT on an AD

HOC basis

An anti-corruption

agency exists BUT only

investigates cases of alleged corrupt conduct.

Does NOT oversee the

anti-corruption policies

Limited evidence that findings and

recommendations of

investigative agencies are acted upon

systematically.

A• Independent third

party survey based on statistically valid sample to monitor level of public confidence

• Conducted at least every 2 years

• Results of survey are made public within 6 months of completion

• Tax administration takes the survey results into account for reviewing its integrity framework and public relations

B• Independent third

party survey based on statistically valid sample to monitor level of public confidence




C• A survey - conducted by tax administration itself or independent third party - based on statistically valid sample to monitor level of public confidence




D

• The requirements for a ‘C’ rating or higher are not met.

Scoring P9-27: Mechanism of monitoring public confidence in the tax administration

A• A report to the

government is produced on an annual basis outlining the full financial and operational performance of the tax administration for the immediate past fiscal year.

• The report is made public within 6 months of the end of the fiscal year

B• A report to the



C• A report to the



D


Scoring P9-28-1: Extent to which the financial and operational performance of the tax administration is reported

A

• Strategic and operational plans are made public in advance of the period covered by the plans.

B

• Strategic and operational plans are made public within 3 months of the start of the period covered by the plans.

C

• Elements of the plan are made public within 3 months of the start of the period covered by the plans.

D


Scoring P9-28-2: Extent to which the tax administration’s future directions and plans are published

Tax Administration Diagnostic Assessment Tool MODULE 11 “POA 9: ACCOUNTABILITY AND TRANSPARENCY”

Documents

Transcript of Tax Administration Diagnostic Assessment Tool MODULE 11 “POA 9: ACCOUNTABILITY AND TRANSPARENCY”