thematic15

15September 2011

Taxpayer Assistance

Introduction

Taxpayer Assistance

Taxpayer Services

• Thepromotionof taxpayerservices /RicardoEscobarCalderon.-- In: 43th CIAT General Assembly, Santo Domingo, DominicanRepublic,2009.

• The promotion of taxpayer services / Néstor Díaz Saavedra.-- In: 43th CIAT General Assembly, Santo Domingo, DominicanRepublic,2009.

Assistance

• Policies for communicating with society and new methods forrenderingthemmoreefficient/JoséAntoniodeAzevedoPereira.--In:42thCIATGeneralAssembly,AntiguaGuatemala,Guatemala,2008.

• Policies for communicating with society and new methods forrenderingthemmoreefficient/EdwardKieswetter.--In:42thCIATGeneralAssembly,AntiguaGuatemala,Guatemala,2008.

• The dissemination of duties and rights of the taxpayers and theentitiesandproceduresforhandlingtheirclaims/LuisPedrocheyRojo.In:39thCIATGeneralAssembly,BuenosAires,Argentina,2005.

Tax Education

• Strategies to develop a tax culture / Carolina Roca. -- In: 42thCIATGeneralAssembly,AntiguaGuatemala,Guatemala,2008.

• Sociallegitimizationofthetaxpolicyandculture/ClaraRossanaArteaga. -- In:42thCIATGeneralAssembly,AntiguaGuatemala,Guatemala,2008.

Contents

CIAT Tax Thematic Series

Inanefforttoprovideaneverbetterandhighlyqualifiedtaxinformationservice to its member countries, the Inter-American Center of TaxAdministrations hereby presents the fifteenth issue of the CIAT TaxThematicSeries.

The purpose of this series is to disseminate relevant information onspecific taxation issuestosupport theresearchandstudyworkcarriedoutbythetaxadministrationsoftheCIATmembercountries.

Thebibliographicalmaterialofthisfifteenthissueisdevotedto“Taxpayer Assistance”. The material gathered includes studies and papersprepared by technical officials for presentation either at the generalassembliesortechnicalconferences,essays,researchscholarshipsandarticlespublishedinthetaxadministrationreview,amongothers.

Tospeedup thesearchand recoveryof informationageneral tableofcontentsandindexispresentedforeachpaper.ThedocumentsthatarepartofthisissueareavailableintheCIATVirtualLibraryandwebpage:www.ciat.org.

ThroughthisnewdocumentarycontributionCIAT,hopestodisseminatethe bibliographical material existing in the Jorge Eduardo CorradineLibrary,forthebenefitofthetaxadministrations.

Introduction

Taxpayer Assistance

Taxpayer Services

1.Introduction.

2. SII’snewstrategicapproach.

3.ProjectstoenhancetaxpayerservicesprovidedbySII.3.1. Civic-taxeducation.3.2. TaxportalMIPYME.3.3. Assistanceplatforminoffices3.4. Virtualofficewww.sii.clandcreationof“MISII”.

4. Finalcomments.

The Promotion of Taxpayer Services

Ricardo Escobar CalderonChile

1. INTRODUCTION

Thesocialandtechnologicalenvironmentisleadingchangestooccurfasterthaninpreviousyears;therefore,thereisaneedtoenhancetheabilitytorespondtotherequirementsoftheenvironmentwiththeceleritydemandedbythecircumstancessurroundingtheTaxAdministration.

Publicaswellasprivateorganizationsmustadapttothischangingscenarioandundergoadjustmentprocessesinordertofunctionefficientlyandeffectively.TheInternalTaxService(SII),likeothertaxadministrationsintheworld,isimmersedintothisconstantneedofreadjustmentinordertofulfillitsobjectivessuccessfully.

Thewaythingshavebeenperformedsofarmustbereoriented,becausethecountry,thepeopleandthebusinesssectorhavechanged;everythinghasgrownmoresophisticated,complex,interconnectedandfullofparticularities,andtaxpayershavespecialdemandsandneeds.Therearealsonewareasofriskthatwantdetectionandmustbeaddressedtimelyinordertominimizetaxevasionandcrime.Toprovideaqualifiedresponsetoanenvironmentsodifferentfromthatofoneortwodecadesago,wemustmakeorganizationalchanges,dothingswithanotherapproachandalsochangethewaythattheService’sofficersinteractwithtaxpayers.

2. SII’s NEW STRATEGIC APPROACH

SII is launching a new strategic approach formanagement anduser’s satisfaction to address thechallengesfacedbythecountryresultingfromthechangesobservedintaxpayers,i.e.,thedevelopmentofmoresophisticatedandglobalbusinesses,personsdemandinghigherassistancequalityandnewservices,demandsfortheprovisionofpersonalized,specificandhighlyreliableinformation,newrisksoftaxevasionandcrimeandchangesinthelegalenvironment.

Thisnewmanagementstylecontemplates,amongotherobjectives,tocontinueofferingfacilitiesfortaxfulfillmentandqualityassistancebothon-lineandpersonally.Inaddition,thedecisiontoimplementthisnewapproachrequiresaconstantenhancementoftheService’sabilitytoreducetaxevasion.

Asystemforprovidingtimely,true,specializedandreliableinformationtotaxpayers,publicinstitutionsandtheGovernmentisrequired,aswellasprovidingcontinuitywithhighlyspecializedtaxfulfillmentservicesinlinewiththeparticularitiesandneedsofeachtaxpayersegment,andevenpersonalizedservicesinthecaseofindividuals.

Theforegoingscenariodemandsfocustobeplaced,amongmanyotherthings,on:

Educationandtimelyinformation: -Earlyeducationtofutureandcurrenttaxpayers -Integralandtimelyinformation

Facilitationoftaxfulfillmentbyenhancingtaxpayerservices:-Improvedassistancequality-Reductionoftaxfulfillmentcosts-Increaseduseofe-governmentsolutions-IndependentTaxCourts

3. PROJECTS TO ENHANCE TAXPAYER SERVICES PROVIDED BY SII

Within theSII’s new strategic approachwe could highlight the projects concerning education andfacilitationofspontaneoustaxfulfillmentatofficesandon-line,whichimpliesenhancinganddiversifying

TaxThematicSeriesNo. 15 - September 2011

3TAXPAYERSERVICES Ricardo Escobar Calderon

taxpayerservices.

3.1 Civic-Tax Education

TheSIIhasdevelopedaCivic-TaxEducationprojectwiththecooperationoftheMinistryofEducation,whichpromotesthedeliveryofcontentsandinformationtocitizens,specificallyregardingtaxissues.

Thislong-termprojectwillallowcoveringagreatpartoffuturetaxpayers,generatinggreatertaxawarenessamong them inorder toencouragevoluntary fulfillmentof taxobligations, inview thateducation isconsideredaneffectivemeansgivenitsinfluenceonthedevelopmentofvalues,thedevelopmentofattitudesandbehavior,thetransmissionofknowledgeandthepromotionofdesiredbehaviorforimprovedindividualandcollectivelifequality.

Nowadaystheprojectistargetedatelementaryeducationstudents,childrenbetween6and13yearsold,disseminatingcivicvaluestonearly2millionstudents.Theaimistocontributetotheirdevelopmentthroughhands-onexperienceapplicabletoeverydaylife,andthusbuildcommunicationbridgeswiththefuturenewusersofourservices.

Withintheeducationprojectstandsouttheon-linePortalSIIeduca(www.siieduca.cl),targetedatteachers,and thechildren’swebsitePlanetaSII (www.planetasii.cl),bothaimedatpromotingvalues,civic-taxeducationandlearningtheimportanceandthemeaningofbeingagoodcitizen-taxpayer.

SIIeducaisaportalofinterestforteachers,whosecontentssupporttheelementaryeducationsyllabusandprogramssetforthbytheMinistryofEducation.ThematerialthereinisusedbyteacherstoteachtherequiredcivictopicsentertaininglyandencouragestudentstousenewinformationtechnologiesthroughthewebsitePlanetaSII.

PlanetaSIIisawebsitededicatedspeciallytochildrenbetween6and13yearsold,whosecontentsarepresentedthroughgames,videos,contestsandsongsforchildrentolearnwhileplaying.

Bothportalsfeaturenavigationspacesspeciallydesigned,incontentandgraphics,tosatisfytheneedsofinformation,materialsandentertainmentofeachgroupofrecipients.

ImageofPortalSIIeduca,www.siieduca.cl:

TaxThematicSeries No. 15 - September 2011

4 TAXPAYERSERVICESRicardo Escobar Calderon

http://www.siieduca.cl

http://www.planetasii.cl

http://www.siieduca.cl

Imageofchildren’swebsitePlanetaSII,www.planetasii.cl:

3.2 Tax Portal MIPYME

With a view to delivering timely, assistanceand service-related information and facilitate taxpayerfulfillmentaccordingtocategoryandsize,aTaxPortalhasbeendesignedontheInternet,targetedatSmallandMedium-sizedtaxpayers,www.portalmipyme.cl,intendedto:facilitatetheuseofinformationandcommunicationtechnologies(ICT),developmanagerialcapacitiesincompaniesbyenhancingtheirtaxandaccountingmanagement,reducethecostsoftaxfulfillmentbyarticulatingitwiththedevelopmentofbusinesses,andpromotinggreaterinclusionofthistypeofcompaniesinthe“formalmarket”.

AmongitstoolsstandsouttheElectronicBillingSystem,speciallyconceivedanddesignedformicroandsmall-sizedcompanieshavingalowvolumeoftaxdocumentissue;andtheSimplifiedTaxSystem,towhichindividualsandindividuallimitedliabilitycompaniesmayenroll,allowingthemtocarrytheiraccountingrecordssmoothlyandsimply.

TheElectronic Billing System allowsissuingandreceiving:invoices,tax-exemptedinvoices,creditnotes,debitnotesandbillsofladingelectronically,referredtogenericallyaselectronictaxdocuments(DTE, in theSpanishacronym). Issuedand receivedelectronicdocumentsaredirectly recorded inaccountingbooksandnon-electronictaxdocumentsaredigitalizeddirectlyintothesystem.Besides,thesystemallowsgeneratingtheelectronicfilesrequiredtoassignElectronicInvoicesintendedtoobtainfinancingrapidly,safelyandeconomically.

Thesystemisultimatelyintendedtoprovidecompanieswithabasicfunctiontooperatewithelectronictaxdocuments,givingthemanewopportunity toknow, learnaboutandprofit fromthereductionofprintingandstoragecosts,improvedorderofbusinessmanagementandefficiencygainsresultingfromtheincorporationofinformationtechnologiesintotheproductionworld,inthiscasethroughtaxfulfillment.

TheSimplified Tax System allows relieving the relevant taxpayers fromhaving toperformcertaintaxobligations,e.g.:carryafullaccountability,preparebalancesheets,applyingmonetarycorrection,depreciationsandpreparationofinventories;andprovidesthefollowingfacilities:

• DeclarationandpaymentoftheFirstCategoryTaxandtheSupplementaryGlobalTaxbasedontheiraccruednetannualincome(revenueslessexpenses)

• SimplificationofthecalculationofMonthlyProvisionalPayments(fixedat0.25%ofmonthlygrosssales)



http://www.portalmipyme.cl

• Immediatedeductionofexpenses,investmentsandpurchases• Automatic generationof incomeandexpense records requiredby theSystem, and immediate

calculationofthetaxablebasefortheFirstCategoryTax,basedtherefrom• Generationofaproposal for theMonthlyVATReturn(Form29)andfor theAnnual IncomeTax

Return(Form22)• Generation,inaddition,ofproposalsforSalary(1887)andFee(1879)Affidavits• Creationoffinancialreportsontheresultsobtainedbythecompanyforpresentationtothirdparties;

forexample,torequestfinancing

Finally,itshouldbepointedoutthattheuseofoneorbothsystemsprovidesagreatertermfordeliveryoftheVATreturnandpaymentofsuchtax,extendingthetermfromthe12tothe20ofeachmonth.

ImageofTaxPortalMIPYME,www.portalmipyme.cl:

3.3 Assistance Platform in offices Asregardspersonalassistancerelatedtoadministrativediligences,theaimistofacilitatethediligenceitself.Thenewassistancemodel,reinforcedandprovidedbypersonnel trainedinthenewstrategicapproach,withimprovedabilitiesandsupportingtechnicaltools,allowsprofitingfromthefacilitationofdiligencestosmall-sizedtaxpayers,thetrainingofsuchtaxpayersand,overall,ofalltaxpayers,intheuseoftoolsthatcutdownthecostsoftransactionswiththetaxadministration,andthefacilitationofthevoluntaryfulfillmentoftheirobligations.



http://www.portalmipyme.cl

ThisnewstructureiscalledTaxpayerAssistancePlatform,whoseobjectives,structureandbenefitsfortaxpayersandofficersareexplainedbelow.

Objectives • Toprovideataxidentitytotheeconomicagent(taxpayer)

a. Toassurethequalityoftheinformationprovidedbytaxpayerb. Tocategorizetaxpayersandtheirobligations

• Toassisttaxpayerwiththefulfillmentoftheirtaxobligationsa. Toinformtheirobligationsb. Tofacilitatediligenceswithlow-costself-assistancetoolsandtimelyandtransparentinformationc. Toprovidetheserviceoftaxdocumentauthorization(stamping).

Structure

TheAssistancePlatformiscomposedof:

a. AnInformationandAssistanceCenterTheofficersinthisareaareinchargeofreceiving,informingandguidingthetaxpayersarrivingatSII’soffices,promotingon-lineself-assistancethroughthecomputersavailableforself-assistancepurposes.Theyaretheinstitution’svisiblefaceandthefirstcontactofthearrivingpersonwiththeService.

b. AnassistancedeskforGeneralDiligencesItconstitutesthefirst lineofassistance,dealingwithdiligencesrelatedtoRIAC(in theSpanishacronym [RUT1* andOriginationActivities]), BusinessTerminationNotice (TG, in theSpanishacronym),DocumentStampingandAdministrativeRequests.Inthisarea,taxpayerswithnospecialsituationscancompletetheirmandatoryadministrativediligencesexpeditiously.

c. AstaffofexaminersforSpecificDiligenceAssistance.ThissectiondealswithdiligencesderivingfromtheGeneralDiligenceAssistanceArea.ItiscomposedofexaminerslocatedoutsidetheGeneralDiligenceAssistancearea,whoreceivethediligencesderivingfromsuchdesk.Theseofficersareresponsibleforresolvingmorecomplexdiligencesrequiringspecialattentionandgreatertimefortheirresolution,anduponthefollowingsituations:• Ordersbeingobjectedtoorwithinterpretationproblems• Annotationsobstructingthediligence,detecteddirectlybythesystem• Specialrequestsnotcontemplatedintheregulation• Unsatisfiedtaxpayers

Benefits

TheAssistancePlatformfacilitatestheperformanceoftaxpayer’sobligationsbywayofsimple,expediteprocesseshavingcontrolsadaptedtoeachrequest.Thisallowsreducingthecurrentcostofhavingtoundergoadiligencewithcontrolsthroughouttheprocesswhicharethesameforalltaxpayers,whethertheyexhibitgoodorbadtaxbehavior.Inthisarea,taxpayer’sdataareupdatedandqualityinformationisprovidedtotheareasresponsibleforexaminingtaxpayer’sbehavior.Theassistanceandexaminationprocessisthusenhancedasaresultofthespecializationofthediverseareas.

1 *Translator’s note: Single Tax Registration Number.



Itallowsestablishingassistancequalitystandardsinordertoimprovetaxpayer’ssatisfactionwiththedeliveredservice.

Itgivestheopportunitytoprovidebetterinformationandassistancetotaxpayersandthusincreasethenumberofusersofself-assistanceapplicationsavailableontheInternet.

Itmakessurethattaxpayersareknowledgeableoftheirrightsandobligations,andaccessrapidlyandeasilytheinformationontheirfiscalsituationandhavethenecessarysupporttofulfilltheirobligationsproperlyandtimely.

Itcollaboratesactivelywithtaxeducationbymakingpeopleawareontheimportanceoftaxesforthecountry’sdevelopment.

3.4 Virtual office www.sii.cl and creation of “Mi SII”

ThedevelopmentoftheInternet,withintheframeoftheSII’snewstrategicapproach,keepscurrentwiththeupdateofservicesintendedtofacilitatetaxpayerfulfillment.Theinnovationtiedtothissectorisaimedatofferingadequatetoolstoeachtypeoftaxpayers,applyingasegmentationofviewsasperuser’sprofileandthusfacilitatingtheirusebyinexpertuserswhilebeingveryversatiletoexpertusers.Inthissense,theoffermadetotheaveragetaxpayerischangedforonethatprovideseverythingthatisavailableasaresultofthemodalityofdeliveringtoolsadjustedtothelogged-inuser.

Thisallowsachievinguser’sloyaltyofon-lineoffice,establishingawin-winrelationshipbetweentaxpayerandtheTaxAdministration.Thetransactioncostsfortaxpayersarecutdown;the24x7platformavailabilityallowstaxpayertoperformdiligencesfreelyandflexibly.TheTaxAdministrationprofitsfromthepossibilityofeffectivelyexercisingthemissionofsafeguardingthefulfillmentoftaxobligations,reflectedin98%oftaxrevenuesvoluntarilyreportedbytaxpayers.

Theredesignoftheon-lineOfficeisintendedtoprovideservicesinaccordancewithanassistancemodelthatallowstaxpayerstointeractinatransactionalportaladjustedtotheircharacteristics.Thisfacilitatesandpromotesvoluntarytaxfulfillment.

Theon-lineofficehasover4millionregisteredusers;itisoneofthethreemostvisitedwebpagesinthecountry.Thefrequencyofvisitsofsomeusersistiedtotheincometaxreturn,withtheseusersshowingalowlevelofknowledgeandexperiencewiththesite;whereasthehighpercentageoftrafficderivesfromexpertusers,amongwhichstandoutaccountants.

Hence,theanalysisofthedesignedproductfocusedonknowingtheusers’opinionregardingthetool,segmentingthembyindividuals,smallandmicrocompanies,mediumandlargecompanies,accountantsandofficersattheSII itself;aswellasontheinstitutional interestsregardingthepromotionoftoolsavailableontheInternetforeachofthesesegments.

Withaviewtocarryingoutthisprojectassoonaspossibleanddeliveringbenefitstotaxpayers,themainpagewillberedesignedandapersonalanddifferentiatedservicewillbeinplaceforthesegmentsofindividualsandcompanies,sowhenataxpayerenterstheirRUTandpasswordadifferentiatedpageisdisplayedcontainingpersonalinformationandthediligencesthenavailabletothemontheSII’swebsiteaccordingtotheircharacteristics.

TheidealsitewouldbeaVirtualRegionalOfficecoveringthelargestpossiblenumberofdiligencesperformedatthephysicalRegionalOffices,providingdifferentiatedservicestoeachsegmentoftaxpayers:Individuals,MicroandSmallCompanies,MediumandLargeCompanies.



http://WWW.SII.CL

Redesign of the virtual office: www.sii.cl

TheredesignofSII’svirtualofficeanditsflagproduct,thepersonalandcustomizedservicecalled“MiSII”,havebeendevelopedbasedonmodern,user-friendlytoolsthatfacilitatebothtaxfulfillmentandtheexecutionofprojectswithasophisticatedstandardofreliabilityandconfidentiality.Inaddition,itfulfillstherulesoftechnologicalusabilityandmodernizationsetforthbytheChileanGovernmentandtheState.

Thedesignproposal is intendedtobemoreuser-friendly, to facilitateuseby inexpertusers,andtomaintainthesamefunctionsanexpertuserwouldrequire.

Thenewdesignmaintainsthetoolscurrentlyavailable,butchangesthesite’saestheticsforimproveduse.

Themostimportantaspectisitssimplicity,groupingtheinformationatSII’swebsitebysections,facilitatingnavigationoflessexperttaxpayers.SearchisthusfacilitatedandthenavigationroutesofusersoperatingwiththeSII’sVirtualOfficeonapermanentbasisarealsofaster.Besides,itusesthecurrentmenusthattaxpayersknowandusetosubmittheirtaxreturnsormakeelectronicpayments,whicharedisplayedontheupperhorizontalmarginforimprovedaccessandnavigation.

Amongthesectionsstandouttaxnews,taxpayerassistanceinformationsuchas:FrequentlyAskedQuestions,WhatcanIdoto…?,educationaldemos,inadditiontostep-by-stepguidesofSII’smaindiligencesandproductsavailabletousers.

Otherimportantredesignsaimatprovidingeasyaccesstothemainthematicsites:TaxPortalMipyme,InformationPortalforForeignInvestorsandTaxEducationPortal.Ineachofthem,theuserisprovidedwithinformationandservicespreparedbySIIforspecifictypesoftaxpayers.SuchisthecaseoftheTaxPortalMipyme,atechnologicaltoolthatallowsfrominitiatingactivitiestoissuingcost-freeElectronicInvoicestothistypeofcompaniesandenrollingintheSimplifiedTaxSystem;bothbetsintendedforthegrowthofsmallandmedium-sizedentrepreneurs.

Asforthe“News”section,thisconcentratesthewholecurrentinformationdeliveredbytheinstitutiontothecommunityandthemedia,whereastheoption“MoreInformation”compilesdataandinformationrelevantforthecalculationoftaxoperationsandfulfillment,suchas,forexample,theeffectivelegislationandregulation,theaddressesofSII’sofficesinthecountry,otherinstitutions’sitesofinterest,Internetpublicaccesssitesandkeydataforeachtaxpayer’susualoperations.

Image of the main page at www.sii.cl:



http://www.sii.cl

http://www.sii.c

“Mi SII”

TheprimaryinnovationintheredesignoftheVirtualOfficeiscalled“MiSII”,whichconcentratesthewholetaxinformationofeachtaxpayerandputsitattheirdisposal,andallowseasyaccesstoalltheelectronicapplicationsanddiligencesyouneedtoundergotofulfillyourtaxobligations.

“MiSII”istaxpayer’sentrancedoorforaccessingtheirpersonalandcustomizedinformation,byenteringtheirRUTandsecretpassword.Thisnewtoolallowsaccessingsafelyeachtaxbackgroundunderfullconfidentiality.Additionally,thenewservicehasbeenbuilttodeliverinformationandworktoolsaccordingtouser’sprofile,whetheranindividualoracorporate.

a. Mi SII for individuals Inthesectioncalled“MyTaxInformation”,taxpayerscanseeadetailoftheirtaxsituation,lodgedtaxreturns,ownershipofrealproperty,authorizationofdocuments,etc.

Inaddition,inthesection“MyTools”theusercanfindwhattheyneedtocarryouton-lineoperationswithSII.Theseoptionscanbeanoticeofinitiationofactivities,taxreturnsandpayments,inquiriesaboutcurrenttaxsituation,issuanceofelectronicfeebills,amongothertechnologicalapplicationsavailabletoindividuals.

Imageof“MiSII”forindividuals:

b. Mi SII for corporatesAsinthecaseofindividualsinthesectioncalled“MyTaxInformation”,taxpayerscanseeadetailoftheirtaxsituation,lodgedtaxreturns,ownershipofrealproperty,authorizationofdocuments,etc.

Inthesection“OtherOptions”,userscanfindinformationrelativetothelegislationandregulation,dataandvalues,requiredtofulfillacompany’staxobligations.

Becausecompanieshavetousealargernumberoftechnologicalapplicationsandwithaviewtopreservingtheaccessibilitysiteandeasinessofoperationbyexpertusers,thesearedisplayedontheupperbar,unlikeinthecaseofindividuals.



Imageof“MiSII”forcompanies:

4. FINAL COMMENTS

TheSII isaddressing thechallenges facedby thecountry resulting fromthechanges in taxpayers,whichrequiregreaterassistancequalityandmoreservicesprovidedthroughanewstrategicmanagerialapproachaimedat,amongagreatmanyotherthings,educating,timelyinforming,assistingandfacilitatingtaxpayers’taxfulfillment.

Inthissense,theAssistancePlatformplaysakeyrole,inthatitfocusesondeliveringassistancequalityapttoencouragevoluntarytaxfulfillmentwhileassuringthequalityoftaxpayer-associatedinformation.

Toachievethis,oneof its functions is theeducationor trainingof taxpayers, informingthemontaxobligationsandterms,providingthemwithfreetoolsavailableontheInternetorelseapersonalassistancethatfacilitatesdiligences.

Obviously,oneoftheprimaryobjectivesistohelptaxpayersmeettheirobligationson-line,beingthisthereasonthatthepersonalassistanceisaimedatcontinuinglytrainingtaxpayersonthismodality.

Anexampleofthis,whichalsoshowstheimpactpursuedwiththisnewstrategicapproach,isthepromotionoftheuseoftheElectronicInvoiceamongtaxpayers,wherethefree-costtoolsavailableontheportalMYPYMEfeatureanelectronicinvoicemodulewhoseanalogousassistanceintheofficesisstamping.

Thepersonalassistancescenarioposesagreatchallengetoon-lineassistance,mostlyifweconsiderthegreatsuccessofSII’sVirtualOffice,beingoneofthemost-visitedpagesandwhereChilehashitworldrecords,asisthecaseoftheAnnualIncomeTaxReturn,whichrecords97.74%ofInternetlodgment.Additionally, fulfillment-orienteddiligenceshave increased,suchas the issueofElectronic Invoices,whosenumberofissuingcompanieswentupby68.4%in2008andby18.1%inthecaseoftaxpayersissuingElectronicFeeBills.

This istheframefortheVirtualOffice’sredesign,whichintendstobringthetaxpayerexperiencetoalevelbasedontaxpayertype,facilitatingitsuseandenhancingsporadictaxpayer-uservisits,whilekeepingtheservicelevelsusuallyprovidedtofrequentorexpertusers.



The set of thesemeasures and transformations in taxpayer assistance, and the commitment tocontributingtothecivic-taxeducationofnewandfutureusersofourservices,willincreasinglyfacilitatetheenrollment,thevoluntaryfulfillmentoftaxobligationsandtheexaminationoftaxpayers,akeypartofthenewstrategicmanagementapproachbeingimplementedbyChile’sInternalTaxService.

Now,toconcludethispaper,wecouldaffirmwiththecertaintyresultingfromourexperiencewiththeChileanInternalTaxService,thattodaytheenhancementoftaxpayerservicesmustconstitute,withnodoubt,aflagProjectintheMasterPlanofmodernTaxAdministrations.



1. ModernizationofDIAN.

2. Ourmanagementmodel.

3. Achivementsandresultsinserviceenhancement.3.1.Customerservicemanagementarea.3.2.Servicechannels.3.3.Publicationofdiligences.3.4.Training,formationandlearningofincumbentofficers.3.5.Education,formativeandupdateactionstargetedat

customersandthepublicatlargel.3.6.Taxculture.

4. Customerservice’scharacteristics.

5. Servicemeasurements.

6. Servicerecognitions.

Taxpayer Service Enhancement

Néstor Díaz SaavedraColombia

1. MODERNIZATION OF DIAN

ThenewwayofmanagingtaxesandcustomsinColombiaispartofthemodernizationpolicyadoptedbytheColombianState,whichisaimedatachievingbettereffectivenesslevelsintheAdministrationthroughtheincorporationofnewtechnologiesintoprocessesthatfacilitatethevoluntarycomplianceoftaxpayers’obligations;andtheprovisionofservicesthatsimplifytasksandreducecosts.

TheDIANiscommittedtoprovidingfacilitationandcontrolservicestotheeconomicagentsforcompliancewith the rules of the tax, customsandexchange rate system, in conformitywith the constitutionalprinciplesoftheadministrativefunctionandwithaviewtocollectingtherightamountoftaxes,speedingupforeign-tradeoperations,facilitatingtheconditionsforloyalcompetition,providingreliableandtimelyinformationandcontributingtothesocialandeconomicwelfareofColombians.

Infurtheranceofsuchpurposes,clearandaccurateguidelineshavebeenoutlined,whichwillallowtheentitytoaddressfutureproblems.Strategicroutesandactionshavebeendefined;inparticular,theentity’smission,visionandstrategicmaphavebeenredefinedsothattheymatchinformationtechnologychanges.

So,thefollowingobjectivesarepursuedinstartinguptheelectronicinformationservices:

Toachieveexcellenceinoperations

Withtheaimofmaximizingtaxcollectioninaccordancewithcertainregulations,thechallengefacedbytheDIANisoneofthelargestinStatemanagement.

Thischallengemustbeassumedintelligently,processingasmuchinformationaspossiblesoastoallowtheentitytoidentifyalltaxpayersandtheirstatuswithinthepublictreasury.

Tocomplywiththat,taxpayershaveattheirdisposalgoodguidance,easyandtransparenttransactionsallowingthemto fulfill theirobligations.TheDIANmuststrengthentax,customsandexchangeratecontrolinordertoguaranteetheperformanceofsuchobligations.

In providinga quality andefficient service, theentity contributes largely to the country’s economicdevelopment;itsclientsmustperceivethattheAdministration’sactivitiesareinspiredbytheprinciplesofequityandjustice.

Toredirecttheentitytowardsservice

ThetaxAdministrationmustkeepupwithmoderncitizen’ssituation,whichdemandsmoreandbetterproductsandservices“atlowerprices”.Notaddressingthisdemandisagainsttheultimateend:taxcollection.

Onredirectingitsactivitiestowardsservices,theentityfacilitatescompliancewithobligationsbytaxpayersand customsuserswhile strengthening its controlling andexamination capacity, so that all actionsundertakenbyit,technologicalprogramsandinnovationsmayreflectthis.Therefore,ithasundertakenanintegralstrategy,providingservicesthatmakethingseasyforthoseincomplianceandgettingholdoftherighttoolstoreducetaxevasion,smugglingandexchangerateinfringementssignificantly.TheDIANhasreorientedtheorganization,itsprocessesanditspeopletowardsservices;itoptimizedcustomscontroloperations,managedthetaxcollectionnetworkandspeededupandflexibilizedthelogisticsprocessesthatsupporttheentity’smanagement.


14 TAXPAYERSERVICESNéstor Díaz Saavedra

Toconsolidatelegitimacyandautonomy

Theway tax payment is carriedout is key to determine taxpayers’ immediate and future behaviorwithrespecttotax,customsandexchangerateobligations,aswellastheirsocialresponsibilityastotheState.Overeightypercent(80%)oftherevenuescollectedbytheDIANoriginateinvoluntary(orinduced)compliance.TheDIANmustsetanexampleofgoodmanagementandtransparencytothecitizens,notonlyastothemanagementofitsresourcesanditsadministrationatlarge,butalsoastoprovidedservices,facilitatedtransactionsandafairandimpartialapplicationofthelaw.

TheinstitutionalimageisstrengthenedsothatthecitizensandtheStatemaygroweachtimemoreconfidentinit,thusgeneratingafavorableconceptinthepublicopinion.Thisisthereasonthatproceduresaremadepublicandthereisanintentiontoprovideongoingtrainingtoofficers,taxpayersandsystemuserstoallowthemanadequateandintelligentuseofinformationandcommunicationtechnologies.

Webelievethattheapplicationofnewservicesandnewtechnologieshasbeencriticaltosimplifytaxcomplianceandhasincreasedtheeffectivenessandefficiencyofexaminationareas,resultinginamoretransparentactionoftheAdministration,deliveringinformationrapidlytousersandtaxpayersandstateentitiesrequiringit.

Tocontributetothecountry’scompetitiveness

Undoubtedly,theTaxandCustomsAdministrationhasastrongimpactonthecountry’scompetitiveness.Thewayitguaranteesfacilitation,services,complianceandtheconsistencyoftherulesassociatedwiththetax,customsandexchangeratesystemiscriticalforinvestment(nationalorforeign)expectations,foreigntradeoperationcompetitivenessandthereductioninthetimeandcostsrelatedtothefulfillmentofobligations.

Therefore,thebalancebetweenfacilitationandcontrolandlegalsecurityisapriorityfortheDIAN;which,combinedwiththepursuitofasimplificationinthelegislationandaproactiveplanningof legislativechanges,collaboratewithourcountry’scompetitivedevelopment.

2. OUR MANAGEMENT MODEL

MUISCA ismore thanan ITproject; it is amodel of integral and integrated revenueand resourcemanagement that forces the speedingupand simplificationof procedures, and its implementationassumesanorganizationalandprocessreengineeringthat inuretothebenefitof theadministrationinmanyaspectsaffectingfrauddetectionandreduction,andthemodernizationandrationalizationofadministrativeprocedures.

TheimplementationofMUISCAhasbeenkeytotheprogressmadebytheDIANincustomerservice,thecreationoftheassistancemanagementareaatanationalandsectionlevel,thecommissioningofelectronicinformationservicesintendedtofacilitatethefulfillmentoftaxreturnandreportingobligationsandtosimplifydiligences,improvetheinstitutionalimage,developaninfrastructuremasterplanandimprove the informationandcommunicationsystem infrastructure;allaspectsdevelopedwithin theframeofthemanagementmodel.

WithintheMUISCAprocessesthatassuretheachievementofexpectedresultsstandoutCustomerService,which implemented,under thequalitymanagementpolicy, theCodeofGoodGovernance,providingclearguidelinesastotheentity’sservicepolicies.


15TAXPAYERSERVICES Néstor Díaz Saavedra

A. ORGANIZATIONS AND METHODS SUB-SYSTEMS

C. MISSION SUB-SYSTEMS

08. CUSTOMER ASSISTANCE 12. EXAMINATION AND ASSESSMENT

10. CUSTOMS OPERATION

13. PORTFOLIO MANAGEMENT

11. COLLECTION AND ACCOUNTING

B. SUBSISTEMAS DE SOPORTE TÉCNICO04. TECHNICAL ARCHITECTURE

05. INPUT AND OUTPUT MANAGER 06. FILE MANAGER 07. SATISTICS

MANAGER

14. LEGAL MANAGEMENT

01. STANDARDIZATION AND STANDARDS

02. CIRCUITS AND PROCEDURES

03. METHODOLOGY

09. MASS MANAGER

D. SUBSISTEMAS DE APOYO15. CORPORATE INTELLIGENCE

16. HUMAN RESOURCES MANAGEMENT

18. CUSTODY AND MARKETING

17. RESOURCES MANAGEMENT

3. ACHIEVEMENTS AND RESULTS IN SERVICE ENHANCEMENT

3.1 Customer Service Management Area

TheSubOfficeofCustomerServiceManagementoftheDIANwascreatedthroughtheExecutiveOrder4756of2005,anagencythatismaintainedintheentity’snewstructureestablishedthroughtheExecutiveOrder4048of2008asanarea inchargeofconsolidatingDIAN’sservicepolicies, transformingtheinternalcultureintoacustomerserviceculture,facilitatingdirectandpersonalizedassistance,offeringongoingandreliabletelephoneassistanceandunifyingservicepointsandpromotingtheuseofInternetforsimplediligences.

3.2 Service channels

3.2.1 Virtual service channel

Theweb site:www.dian.gov.co,establishesacommunicationchannelbetweentheDIANandclients,providingupdatedinformationandtoolstofacilitatecompliancewithtaxobligationsinanagile,reliable,timelyandsafemanner.

AtDIAN’sportalyoumayfindinformationontheentity,technicalandgeneralregulationsandagreements,figures,managementaspects;statistics,managementandcontrol,accountability,controlentities,budget;electronicinformationservices,diligences,publications,forms,hiring;salesandauctions.

WecancarryoutregistrationdiligencesintheSingleTaxpayerRegistry;onlinelodgmentoftaxreturns,tax,customsandexchangeratereportingviafiles;inconsistencycorrectionservices;financialobligationinquiries;electronicpaymentofobligations;processfor theexitofgoods;processfor importcargo;customstariffs;documentarymanagement;unloadingofaidtools:helpprogramforincomereportingfromnaturalpersonsanddatapre-validators;traininginelectronicinformationservices:manuals,videos,generalinformation,e-courses.



WealsoprovidelinkstootherStateportalsandidentifyourmailboxesforlegalinquiriesdian@dian.gov.coandcustomerserviceissuesasistencia@dian.gov.co.Bywritingthere,customersandofficersareassistedwiththeuseofelectronicinformationservices.Thiswebsiteisdesignedtocommunicateproblemsorconcerns,andthusavoiddiligencesandtransfers,andfacilitatetheinteractionwiththeentity.

AlsoincorporatedintothewebpagearetheComplaintMailbox:[email protected],andtheOfficeofthePublicDefenderofTaxpayersandCustomsUsers:[email protected]

DIAN’schatservicesareintendedtoprovidethenecessaryinformationandtoassistandguidecustomerswithperformingtaxobligations.

3.2.2 Call-center

Withtheaimoftrainingskillfulofficersandprovidingadequateservicetotaxpayersandusers,ourCallCenteroffersassistanceandguidanceontax,customsandexchangeratematters,aswellasongoingassistanceintheuseofelectronicinformationservices,receptionofcomplaintsandclaims.

TheCallCenterhiredbytheDIANismadeupoffiftyfive(55)first-levelagentsandeight(8)second-levelagentswhoareofficersattheDIAN.

Also,theSubOfficeofCustomerServiceManagementhasongoinginternalassistancelinesthatsupporttheworkinthediversebranches.

Resultsinfigures:

CALL CENTER 2007 2008Incomingcallsanswered 406,126 400,539

Outgoingcalls 64,089 88,189

Assistedcustomers 470,215 488,728

3.2.3 Presence channel

Our59PuntosdeConTacto(ContactPoints)aresuchplacesandphysicalspacesallocatedtoprovidepersonalizedassistanceandinformation,guidanceservicesandassistanceinconnectionwiththetaxobligationsofclientsandcitizensatlarge,whicharelocatedinsideandoutsidetheSectionOfficesofNationalTaxesandCustoms.

TheservicesrelatedtoRUT(SingleTaxpayerRegistry),billingrequest,issueofthedigitalmechanism,(external) reporting via filesandbilling, lodgment of accountingbooks, rebates, financial obligationinquiries,notices,legalguidance,collection,examination,foreigntrade,etc.,areprovidedatsuchPoints.

Also,withaviewtodecentralizingguidanceandservicefunctions,theentityhassignedinter-institutionalagreementswiththeChambersofCommerceorterritorialbodies,wherebydifferentregionsfromthoseofDIAN’sofficebranchesarereached,withofficialsapttoprovideassistancewithRUTregistrationservices,specialrequests,billing,accountingbooks,etc.

OurPuntodeConTactoMóvil(MobileContactPoint)allowsthemanagementandassistanceareastosettletemporarilyinstrategicsitesandeventstoprovideclientswithRUTregistrationandupdateservices,billing,specialrequests,guidanceandassistance.



mailto:[email protected]





Self-managedpoints (kiosks):Areassistancesites locatedwithinPuntosdeConTacto.TheseSelf-managedKiosksareequippedwiththenecessaryphysicalandtechnologicalinfrastructuresothatusersmayself-managetheinformationtheywillsendtotheDIAN,suchastax,customsandexchangeratereturns,transferprices,etc.

Thisself-management task isoriented,supervisedandsupportedpermanentlybycustomerserviceadvisorsandhighlyqualifiedofficers.

3.3 Automated and simplified processes, services and procedures

DIANhasimplementedelectronicinformationservicesfortheexecution,facilitationandsimplificationofthefollowingdiligences,processesandprocedures:SingeTaxpayerRegistration(RUT)

Aspartof thedevelopmentof the facilitationpolicyadoptedby theDIAN, thenewSingleTaxpayerRegistration–RUT–hasbeenimplementedandstartedoutasabasicinstrumenttolocate,identifyandclassifytaxpayersandusers.Itcomprisesfourregistries:thetaxpayers’registrycarriedbytheentity,thenationalregistryofsellers,thenationalregistryofexportersofgoodsandservicesandtheregistryofcustomsusersauthorizedbyDIAN.

From2004,theDIANmovedfromadatabasecontainingsuchclientinformationasnameorcorporatename,NIT,address, legal representative, indicationofwhetherhe/she is responsible for incomeorsalestax;toatoolthatconstitutestheonlymechanismtoidentify,locateandclassifybothindividualsandtaxableorexemptcorporates,personssubject–andnotsubject-tolodgingtaxreturns,taxpayersundertheordinaryorsimplifiedsystem,withholdingagents, importers,exportersandothercustomsusersandtaxablepersonsmanagedbytheentity.

TheregistrationandupdateoftheRUTiscarriedoutthroughthiscost-freeservice,andspecialupdaterequestsareaddressed.

Diligenceandonlinelodgmentoftaxreturns

Thisservicehasbeenimplementedforthefollowingforms:

NUMBER NAME

110Incometaxandsupplementaryreturnorincomeandpropertytaxreturnforcorporatesandsimilarcorporations,individualsandsimilarlytreatedindividuals,individualsandsimilarlytreatedindividualsobligedtocarryaccountingbooks

210Incometaxandsupplementaryreturnforindividualsandsimilarlytreatedindividualsnotobligedtocarryaccountingbooks

300 Bimonthlysalestaxreturn(VAT)

350 Monthlydeclarationofwithholdingatsource

420 Propertytaxreturnandpayment

490 Nationaltaxpaymentofficialreceipt

690 Customstaxpaymentofficialreceipt

520 TaxreturnuponterminationofImport–Exportspecialsystems



540 ConsolidatedPaymentreturn(ForPostOfficeTrafficandUrgentShipmentintermediaries)

600 Exportdeclaration

120 Transferpriceindividualinformationreturn

130 Transferpriceconsolidatedinformationreturn

TheonlinedocumentlodgmentserviceallowstaxpayerstofulfillthelegaldutytodeclareonlinefromtheDIAN’sportalinanagile,easyandsafemanner,usingthedigitallycertifiedsignaturemechanismandfullycompletingtheformdiligence,signingitdigitallyandsubmittingitelectronicallytotheDIAN.

Thisserviceeliminatesthepresentationoftaxreturnsatbanksandfinancialentities.Reliabilityandtruthfulnessofinformationareguaranteed.Itfacilitatesthefulfillmentoftax,customsandexchangerateobligationsthroughtheelectronicsystem.

Reportingviafiles

Servicedevelopedandimplementedtosubmitmassinformationbymeansoffiles.

TheDIAN receives informationonconductedbusinessoperationsand transactions, informationonoperationsconductedbyinternationaltradersandimport-exportspecialsystemusers,documentsforthediligenceofexportsand thecargoentering thecountry fromfinancialsectorentities,chambersofcommerce,stockexchanges,stockbrokers, theNationalRegistryofCivilStatus,notarypublics,typesetters,economicandenterprisegroups,corporatesandotherentitiesobligedtowithholdatsource,entitiescelebratingcooperationagreements,authorizedexchangemarketbrokersandpostofficefinancialserviceconcessionaires,holdersofcompensationcurrentaccountsandauthorizedprofessionalsofcashandtraveler’scheckstrading.

ThereportingviafilesserviceallowsusertopresenttheinformationelectronicallytotheDIANinXMLfilesthatcanbegeneratedfromthecompany’sinternalsystemsortheuseoftoolsthatareavailablecost-freeinDIAN’sportal.

Thisprocedureassuresthattheinformationreportedtotheentityis100%processableandusefulfortaxpayerandcustomsusercontrolandfollow-upprocessesregardingomission,evasionandothertaxfraudmodalities.

Digitallycertifiedsignaturemechanism

Thedigitallycertifiedsignaturemechanismusedbyclientswhooptfortheelectronicinformationservicesguaranteesauthenticity:thatis,thereisnodoubtaboutthemessageissuer’sidentity;integrity:thatis,themessageisnotalteredbetweenthetimeofdispatchandthereception;noobjectiontotheinformation,whichmeansthatwhoeverreceivesorsendsamessagesigneddigitallyandsupportedbyadigitalcertificatecannotdenythecontentofsuchmessage.

WiththeuseofthismechanismboththeusersandtheDIANgainsecurityandreliability.

TheDIANobtainedtherecognitionasaPrivately-heldCertificationEntitybytheSuperintendencyofIndustryandCommercethroughtheResolution36119ofDecember30of2005.ThisallowsmassspreadofthissecurityinstrumentforthebenefitofDIAN’smanagementprocesses,rulingoutintermediaries.

Processforcorrectinginconsistencies



AprocessthatallowsthetimelyidentificationandcorrectionofinconsistenciesintheinformationsubmittedtotheDIANintaxreturns,customsdeclarationsandofficialpaymentreceipts,asabasicprincipleofthemanagementmodelMUISCAforthepurposesofguaranteeingsourceinformationforaccounting,financialobligation,examinationanddecision-makingprocesses.

ThemasscorrectionofinconsistenciesdetectedintaxreturnsandreceiptsofpaymentofobligationsandservicesmanagedbytheDIANisprimarilyintendedto:firstly,facilitatethediligenceinherentincorrectinginconsistenciestiedtoanyoneofthedocumentsspecifiedhere;andsecondly,havequalityinformation that facilitates control anddeterminationof the taxesadministeredbyand theservicesrenderedbytheDIAN.

Withthepurposeofturningthisprocessmoreoperational,theserviceallowstaxpayerstoexaminethedocumentscontaininginconsistenciesthroughthecorporateportal,onlybyincludingtheirNITnumber.Theyarealsoinvitedviae-mailortelephonetoapproachtheContactPointstoperformthecorrectionsdetectedthroughthesystem.

Processfortheexitofgoods

Aprocessforcarryingouttheproceduresdemandedbythecustomsregulations,asrequiredfortheexitofgoodsfromthenationalterritorywithdestinationtoanothercountryorfreetradezone.Althoughthisprocesswasautomated,a100%-servicecoveragewasachievedatthe levelofoperationsandterritoriality.Additionally,newtollswereofferedwhichallowsystem-to-systemelectronictransmissionandhelpreducetimesandcostsinforeigntradeoperations.

Thewebservice implemented togetherwith theForeignTradeMinistry for theexport process, theinformationonratificationsandauthorizationsobtainedthroughtheSingleForeignTradeCounterisvalidated.

Characteristics such as traceability, agility, interoperability, internationalization, facilitation, greatercoverageofdiligencesandoperations, informationqualityare inherent in thisprocess.ThisservicewasimplementedinSeptemberof2008andnearly1,000,000operationshavebeenreportedtodate.

Processforimportcargo

Carryoutproceduresrequiredbycustoms’regulationstointroducemerchandiseintothenationalcustoms’territory.Thisprocessunderwentsignificantchangesthatguaranteethecompliancewithinternationalstandardsonimportcargo,intendedtostrikeabalancebetweenthefacilitationandcontrolrequiredbythistypeofforeigntradeoperations.ItwillbeimplementedfromMay1of2009.

Characteristicssuchastraceability,agility,internationalization,facilitation,greatercoverageofdiligencesandoperationsandinformationqualityareinherentinthisprocess.

Paymentthroughelectronicchannels

Theelectronicpaymentwasimplementedforpaymentofcustomsandexchangeratetaxobligationsthrough theentitiesauthorized forcollection.Collectingentitieswillput this formofpaymentat thedisposalofthepublicasfromtheFebruary2009.

Processmanagement

All customersmay followup through theDIANportal theactivities carriedout using theelectronicinformationservicessuchasinquiringprocedurestatus,verifyingusersorpersonswhoparticipated,



reviewingexecutiontimesoftasks,inquiringaboutgenerateddocumentsfortransactionsandguidingusersonpendingtasks.

Thisaddstransparencytotheoperationandminimizestherisksofdiscretionarybehaviorofusersandofficers.

Tariffadministration

Thewebpageprovidesforeigntradeusersandcitizensatlargewithacost-freeserviceforinquiringCustomsTariffs,aone-stoppointwheretheycanfindalltheinformationassociatedwithassessments,requirements, international agreements, supporting documents, ratifications and in general all theinformationrequiredtoimportorexportgoods,basedonatariffsub-item.

Financialobligation

Thistoolprovidesonlinebalancesoftax,customs,exchangerates,administrativeandjudicialobligationsoftaxpayersandcustomsusers.Thisserviceallowsusertofollowupatanytimethestatusoftheirobligationsandtheirevolution.

Thisserviceguaranteesthatthefinancialobligationisdulydocumentedatalltimes,includinganintegralidentificationoftaxpayers’financialobligations(tax,customsandexchangerateobligations),andallowsinquiringaboutfinancialobligations,thehistoricalidentificationofgeneratedbalances,theirdeterminationandtheliquidationofinterestforpastdueobligations.

Resultsandfigures

CONCEPT 2006 2007 2008Taxreturnslodgedonline 260,161 1,070,298 1,271,035

Requests-SubmittalofMassInformationviafiles 444,380 536,822 546,468

RecordsofSubmittalofMassInformationviafiles 135,308,765 109,406,857 100,758,872

Inquiriesabout2008’sCustomsTariff 52,713

RUTRegistrations 1,212,654 1,131,109 1,290,195

Updates 586,233 549,706 669,323

Specialrequests 46,103 33,399

DIGITAL MECHANISMIssues 47,523 37,377 14,459

Renewals 3,610 2,741

SERVICECustomersassistedpersonally 1,984.083 2,527,144 3,242,555

QRSPreceivedandlodgedandCongratulations 12,020 2,030 6,967

Congratulations 8,176 972



3.3 Publication of diligences

Through its technologicalplatform,printing,electronic, telephonemeansormail, theDIANputs thesimplificationofitsdiligencesandproceduresatthedisposalofclientsandcitizensatlarge.

Thisspreadingstrategyisleveragedbytellingclientsthelocationoftheiroffices,thefilingofclaimsorcomplaints,workinghours,regulations,functionsandotherindicationsnecessarytocomplywiththeirobligationsortoexercisetheirrights.

3.4 Training, formation and learning of incumbent officers

Theseprocesses imply thedevelopmentofactions for theawarenessandpreparationofall publicofficersattheDIANregardingtheinstitutionalizationoftheservicepolicyandattributes,theratificationofthepracticeofanadequatecommunicationandtheinstitutionvaluesthatallowofficerstodevelopaserviceculture.

Supplementary,thetechnicalskillsofpublicofficersintax,customsandexchangeratemattersispursued,whichmayadddynamismtotheinstitutionintheperformanceofitsmission.

Tospeeduptheaboveexplainedprocess,theInstitutionalServiceNetworkhasbeensetup,composedofentityleaderswhowillactasagentsfortheperformanceofactionstargetedatpromotingtheconstruction,reinforcementandimprovementofaServiceCultureattheDIAN.Hence,thespacesfor interactionofferedbytheentityaretakenadvantageofforknowledgedevelopment,bonding,consolidationofaculturebasedontheexchangeofknowledgeandexperiences,andratificationofthesenseofbelongingandcollectivecommitmentinservicematters.

3.5 Education, formative and update actions targeted at customers and the public at large

TheDIANperformsinformation,persuasionandremindercampaignsonapermanentbasis,aswellasupdatesymposiumsontax,customsandexchangeratemattersintendedtoguideandcommunicatetotheclientsandthepublicatlargethecurrentandnewprovisionsrelatedtoitscompetence.Also,online-testingenvironmentsarescheduledintendedtodevelopskillsintheuseofelectronicinformationservices.

3.6 Tax culture

Withintheframeofthereinforcementofataxculture,theDIANworksondiversefrontsidentifieduponadiagnosisoftheneedsandvariablesonwhichthetaxcultureworkshouldfocus.

Internalactions:Internalcampaignonvalues;issueoftheCodeofGoodGovernance;ethicalguidelines,socialresponsibilitypolicies,policiesforsuppliersandcontractors,servicepolicies.Externalactions:Communicationsstrategy:radio,TVandstreetadvertising.Institutionalpresenceinshoppingmalls,fairsandevents;Christmascampaign;ConTactoMóvilpointsinstrategicsectors(SanAndresito;CentrodeAltaTecnología).

4. CUSTOMER SERVICE’S CHARACTERISTICS

AttheDIAN,customerserviceisdefinedasthe“set of everyday actions intended to satisfy clients’ needs and facilitate the fulfillment of their obligations, guaranteeing their rights”.

Hence,thisservicedefinitionisaimedatachieving,maintainingandrespondingtocitizens’trustbaseduponatransparentbehaviorsubjecttothecontrolestablishedbythepublicentities.



Therenderingofthisservicerequirescoherenceamongstrategicplanning,organizationalstructure,processes,technology,thepeople,thecultureandorganizationallearning.Allwithaviewtoallowingserviceeffectivenessandpositioningtheentityasaleaderinmanagementmodernizationintheworldcontextundertheconditionsofglobalizationandinternationalizationoftheeconomy.

Toachievesuchaims,theentityfocusesonthedevelopmentofataxculture,adoptingeducation,guiding,informationactionsandassistancetargetedatsociety,taxpayers,beneficiariesandusersinordertofacilitatecompliancewiththeirtaxobligations.

Inthisway,theserviceprovidedbytheentityinvolvesinformationandcommunicationprocessesthatallowknowingtheneedsandexpectationsoftheentity’sinternalandexternalclientsandbringingtheTaxandCustomsAdministrationclosertothecitizens.

Inordertodevelop,theentityneedstoframedevelopmentwithinqualitystandards.Thisrequiresthattheentityshouldidentifyitscommitmenttoclientsandusersandknowtheirneedsinordertodoeverythingwithinreachtomeetthem.Inthisway,boththeserviceproviderandtheservicerecipientarerewarded.

Theentityworksontheimplementationandmodernizationofservicechannelstomakethemeffective,convenientandsecureforclients.Tothisend,itpermanentlymeasureandassesitsimpactonclientsatisfaction,theinstitutionalmanagementandtheimprovementintheentity’simage.Itmustsetfollow-up,evaluationandcontrolprocedures.

BelowareDIAN’scustomerservice’sattributes.

Kind treatment:Willingnesstotreatclientsrespectfully,fairly,withoutcriticismorjudgments,consideringspeciallytheirhumancondition.

Modern:The service is provided in convenient, comfortable and safe premises fittedwithmodernequipment,state-of-thearttechnology,goodpresencestaff,attractive,didacticalandplain-languagematerial.

Personalized:Eachclientisunique,sotheyareassistedduringconvenientworkhoursandinformedonalltheconditionsthatallowthemtoknowhow,when,whereandwhytheymustfulfilltheirobligations.

Reliable:Capacitytoguaranteeclienttheuniformityofcriteriaintheguidance,assistanceandinformationdelivered,showinginterestinsolvingclient’sproblems.Theserviceisprovidedwithinthestipulatedtime.

Safe: It guarantees confidentiality, an adequatemanagement and safeguarding of the informationreceived fromclient, facilitateshassle-freeaccessandmanagement thereof for theperformanceofclient’staxobligations.

Effective: It renders a quality, precise, timely and truthful service thatmeets client’s needs andexpectationsusingtheentity’sresourcesinatimelyfashion.

5. SERVICE MEASUREMENTS

ServiceatDIANissubjecttopermanentevaluationbyclientsandusers.Thisimpliestheobligationoftheentitytodefineandapplythenecessarymechanismstoallowknowingtheclient’sopinionoftheattributesoftheprovidedservice.

Theresultsderivingfromthemeasurementactivitieswill indicatewhetherit isnecessarytoconductcorrectiveandcontrolactions,implementations,changes,eliminations,amongothers,withaviewto



consolidatingandmaintainingbothclient’ssatisfaction levelsand theentity’sofficers’willingness toprovideservice.

During2008,thefirsttwoserviceperceptionsurveyswereconducted.Thespecificobjectivesofthismeasurementwere to assess clients’ perception of eachof the attributes or characteristics of therenderedserviceandtoestablishanumberofsatisfiedclientsaftertheyapproachedDIAN’spremisestorequestaservice.

RESULTS FROM 2008’s SERVICE PERCEPTION SURVEY

0

0,5

1

1,5

2

2,5

3

3,5

4

Knowledge

Respectandkindness

Interestinthediligence

Agilityandtimeliness

Easiness

Convenience

Accessibility

Inform

ationinfolders

Servicehours

Staffintroduction

Evaluated factors

Gra

de

Firstsemester2008 Secondsemester2008

80.8276.87

17.822.35

1.08 0.78% 0.24 0.00%0

10

20

30

40

50

60

70

80

90

PERCENTAGE OF SURVEYED

CLIENTS

12 34 5

SATISFACTION RANGES

RESULTS BY TOTAL NATIONAL SATISFACTION RANGES 2008

Fistsemester2008

Secondsemester2008

6. SERVICE RECOGNITIONS

Nationalleadershipofthepolicycalled“GobiernoenLínea”carriedoutbytheNationalGovernment.

WithintheframeoftheimplementationstrategyofGobiernoenLínea,theDIANhasbeenundergoingatransformationphasesince2007,becomingoneofthenation’sleadingentities.



Strategy Phases

2007

2000

2001

2003

2005

Decree 1151, 2008

DDeemmooccrraaccyy PPhhaasseeCCoolllleeccttiivvee ccoonnssttrruuccttiioonn ooff ppoolliicciieess aanndd ddeecciissiioonn--mmaakkiinngg

TTrraannssffoorrmmaattiioonn PPhhaasseeOOrrggaanniizzeedd SSeerrvviicceess aass ffrroomm nneeeeddss

Transaction PhasesDDeelliivveerryy ooff PPrroodduuccttss aanndd SSeerrvviicceess

Interaction PhaseMMeecchhaanniissmm ttoo bbrriinngg cciittiizzeennss cclloosseerr

Information PhaseOOnnlliinnee IInnffoorrmmaattiioonn PPuubblliisshhiinngg

TheAdministrativeDepartmentofPublicFunctionsandtheMinistryofCommunicationshavementionedtheDIANasanentity providing sector servicesofGobiernoenLíneaand takingadvantageof itstechnologicalplatformintheinter-operabilitywithotherplatformsonagovernmentlevel,asisthecaseoftheSingleForeignTradeCounterandtheAssetLaunderingUnit.



Assistance

I. Introduction.

II. Coreaxesofanefficientcommunicationpolicy.1. Informingtaxpayersoftheirrightsandobligationsand

supportingtheminthecompliancethereof.2. Developingincitizens(taxpayers)agreaterperceptionof

equityandjusticeinthetaxsystem.3. Collaboratingtodetertaxevasionandtaxfraud.4. Contributingtoagreater“taxeducation”anddeveloping

a“complianceculture”incitizens.

III.PortugueseTaxAdministrationcommunicationpolicy.1. Taxpayers’accesstotaxstatusinformationand

assistanceinthecompliancewithtaxobligations.2. Developingincitizens(taxpayers)agreaterperceptionof

equityandjusticeinthetaxsystem.3. Detertaxevasionandtaxfraud.4. Contributingtoagreater“taxeducation”anddeveloping

a“complianceculture”incitizens.5. CertainindicesontheperformanceofthePortuguesetax

administrationinthelastfewyears.

Policies for Communicating with Society and New Methods for Rendering them More Efficient

José Antonio de Azevedo PereiraPortugal

I. INTRODUCTION

ThecommunicationpolicyadoptedbytheTaxAdministrationsisincreasinglydeemedatopicofgreatrelevanceinanystrategyaimedatimprovingtaxpayer’svoluntarycompliance.

Asweknow,taxcollectionisnotapopulartask,especiallyamongcitizens,therefore,theadoptionofaneffectivecommunicationpolicyisvitalfortaxpayers’betteracceptanceandunderstandingoftheTaxAdministration’smission,andconsequently,agreaterpredispositiontowardscompliancewithtaxobligations.

TheforminwhichtheAdministrationrelatestoitssubjects,taxpayers,isvitalfortheirperceptionofthetaxsystemandtherespectivebehavior,andthecommunicationpolicyis,naturally,anessentialfactorinthisrelation.

Maximizingvoluntarycompliancelevelsisonlypossibleiftaxpayersreceiveadequateinformationontheirobligationsandrightsandontheformofcomplyingandexertingthem.Ontheotherhand,knowingtheTaxAdministrationsactivityandtheresultsthereofisalsoarelevantfactortoinducecomplianceand,inversely,detertaxevasionandtaxfraud.

Anefficientcommunicationpolicyplaysavitalroleintaxpayers’behavior.Inthecurrent“informationsociety”,thechallengesfacingtheTaxAdministrationsistoeffectivelyusethenewpotentialcreatedby such society, favoring a greater approach to taxpayers and inducinghigher levels of voluntarycompliancewithtaxobligations.

II. CORE AXES OF AN EFFICIENT COMMUNICATION POLICY.

Inmyview,anefficientcommunicationpolicyshallfundamentallyconsiderfouraspects:

Informingtaxpayersoftheirrightsandobligationsandsupportingtheminthecompliancethereof; Developingincitizens(taxpayers)agreaterperceptionofequityandjusticeinthetaxsystem; Collaboratingtodetertaxevasionandtaxfraud; Contributingtoagreater“taxeducation”anddevelopinga“complianceculture”incitizens.

FollowingIshallbrieflyrefertohoweachofthesefouraxestranslates.

1. Informing taxpayers of their rights and obligations and supporting them in the compliance thereof.

Thefirstaxis–taxpayerinformationandsupport-is,naturally,fundamentalforthevoluntarycomplianceindices.

Iftaxpayersdonotknoworunderstandtherulesthatgovernthem,theyshallfacegreaterdifficultiestomeettheirtaxobligations,evenifinitiallythereisapredispositiontowardscompliance.

Therefore,it istheroleoftheTaxAdministrationtoensuretaxpayersthefastandsimpleaccesstoinformationontheirtaxstatusandassistthemincomplyingwiththeirtaxobligations.

Inthisaxisofcommunication,theTaxAdministrationshallmakeavailabletotaxpayersmultipleaccesschannels-Internet,e-mail,personalassistance,telephoneassistance,faxormail–consideringthedifferentneedsanddiversetaxpayerprofiles.


28 ASSISTANCEJosé Antonio de Azevedo Pereira

RegardlessofthediversityofchannelsthroughwhichinteractionwiththeTaxAdministrationispossible,Internetshallbethepriorityfortaxpayerstoaccessinformation,whetherofageneralorspecificnature;thatistosay,theonereferredtothespecifictaxpayerstatus.ThegrowingrelianceontheInternetisfullywarrantedbythefactthatitistheinteractionchannelthatguaranteeslowercosts,fortheadministrationaswellastaxpayers(mostlyintermsofconvenience,availabilityandexpeditiousness).

On the other hand, theTaxAdministration shall increasingly adopt a proactive attitude, informingtaxpayersonthedeadlinesoftheirtaxobligations,disseminatingthenewservicesavailable(forexample,newonlineservices)orinformingthemofthelegislativeamendmentsandtheirrespectiveconsequences.Therefore,theE-mailandSMStoolsappearasthemostappropriatemeansofcommunication,giventheiradvantagesintermsoffastcommunicationandtaxpayers’perceptionthattheyareeasilyaccessible.

CorporateTV is also anothermedium that theTaxAdministrationsmayemploy to carry relevantinformationtotaxpayers,whetherintheaxisunderconsiderationortheaxesIshallrefertolater.TheavailabilityofthiscommunicationchannelinthepersonalizedassistanceofficestodisseminatetheusefulcontentsfortaxpayersandfortheTaxAdministrationproperconstitutesanothermeanstoincreasetheefficiencyinthecommunicationwithcitizens.

Lastly,theTaxAdministrationshallalsorelyondiagnosisinstrumentsthatenabletoassessthequalityofassistanceandtheservicesitrenderstaxpayersbyregularlyconductingsurveys/questionnairesthatallowtomeasurethelevelsoftaxpayersatisfactionandidentifyimprovementandservices’expansionopportunities.

2. Developing in citizens (taxpayers) a greater perception of equity and justice in the tax system;

ThedisseminationofeasilyaccessibleinformationforcitizensrelativetotheresourcesallocatedtotheTaxAdministration,theactivitiesandactionsdevelopedandtheresultsachieved,apartfromcontributingtoagreatertransparencyoftheTaxAdministrationandenablingtoevaluatetherespectiveperformance,isalsoakeyfactorforcitizenstodevelopagreaterperceptionofequityandjusticeinthetaxsystem.

Forexample, in this context, I understand thegreat relevanceofdisseminatingdata regarding thetaxpayers’controlandselectionmechanismsandtherespectiveresultsandaveragecollectionterms,specifically,coercivecollection

AsregardsthecommunicationmediatobeemployedindisseminatingtheTaxAdministrationactivity,actionsandresults,theInternetandCorporateTVappearasthemostappropriateinternalchannels.

On theotherhand, it isanaxisofgreat importancewith respect to themassmedia (forexample,newspapers,magazines,radioandtelevision),giventhebroadcoveragetheyensure.

3. Collaborating to deter tax evasion and tax fraud.

Theperceptionthattaxnoncomplianceentailsrisksandhighcostsisakeyfactortodetertaxfraudandtaxevasion,andthus,itisvitalthattheTaxAdministration’scommunicationpolicycontributesinthedevelopmentofsuchperception.

Inthisregard,theTaxAdministrationshallinformcitizensthemeasuresandactionsimplementedwiththepurposeofdetectingandcombatingtaxevasionandtaxfraudanddisclosingtheachievements.

Inthiscase,resortingtothemassmedia,inadditiontotheInternetandCorporateTVchannelconstitutesakeyfactorforthisaxisofcommunication,sincetheyenablereachingthemajorityofcitizens/taxpayers.


29ASSISTANCE José Antonio de Azevedo Pereira

4. Contributing to a greater “tax education” and developing a “compliance culture” in citizens.

Last,butnot least, it isworthnoting theAdministration’scommunicationpolicycontribution to “taxeducation”-forthedevelopmentofa“complianceculture”.

Weknowthatcitizensdonotappreciatepaying taxes, ingeneral terms.Therefore, Ibelieve thatagreaterawarenessas regards the relevanceof taxes in theRuleofLawand theSocialStateandmoreinformationontheforminwhichthetaxeswepayareemployed,arekeyfactorstodevelopincitizensagreaterpredispositiontowardsthepaymentoftaxes;thatistosay,togenerateincitizensthe“complianceculture”.

Likewise,inthisarea,theTaxAdministrationsmayandshallplayarelevantrole,sinceinthiscase,andinspiteofthewishthattheactionsundertakenreachthelargestnumberofcitizens,childrenandyouthsarethemostrelevantbeneficiaries,sincetheyarethetaxpayersofthefuture.

Asregardstheeducationaxisinthecommunicationpolicy,themeansthattheTaxAdministrationsmayemployarequitedifferent.Forexample,theparticipationinthecreationofschoolcurriculathatincorporatestaxeducationsubjects,thedevelopmentofeducationalpublicationsandgames,inclusionofataxeducationareaonWebsites,implementingandparticipatinginforaonthetopic,etc.

III. Portuguese Tax Administration communication policy.

Following,IshallfocusoncertainaspectsofthePortugueseTaxAdministrationcommunicationpolicy–oftheGeneralTaxDirectorate(DGCI,asperthePortugueseacronym)–inthedifferentaxesmentioned.

1. Taxpayers’ access to tax status information and assistance in the compliance with tax obligations.

Taxpayers’righttobeinformedontheappropriateconstrualoftaxregulations,ingeneral,andtheirtaxstatus,inparticular,isembodiedinthePortuguesetaxlegislation.TheDGCImakesavailablemultiplechannelsaimedatensuringtaxpayers’accesstotherelevantinformationfortheappropriatecompliance,induetimeandmanner,oftheirtaxobligations.

Inspiteof thediversityofexistingchannels (personal, telephone,e-mailand fax/mail), the Internetincreasinglystandsasthestrategicchannel for thePortugueseTaxAdministration,whetherfor thepurposeofdisseminatinggeneralorspecificinformation.

AsregardsthegeneralinformationavailableontheWebsite,wemayhighlightallthetaxlegislationineffect;asectionforFAQs(FrequentlyAskedQuestions)relativetothedifferenttaxesandothertaxissues;publicationoftheAdministration’sopinionasregardsrelevantinformationrequestedbytaxpayers;theadministrativeinstructionspublishedbytheservices(suchas,circulars,communications);thetaxcalendar,withthedeadlinesfortaxpayers’taxobligations;andprogramswithsampletaxassessments.

Asregardsthespecificinformation,theInternetfeaturesasetofrelevantdataontaxpayers’taxstatus.Forexample,taxpayersmayaccess(i)registryinformationanddirectlymodifyit;(ii)queriesonthestatusoftheirtaxstatements;(iii)queriesontaxdebtsand,simultaneously,requestinformationandclarificationinsuchrespectorevenproceedtotheirpayment;(iv)queriesoninfringementproceedings.

Currently, taxpayersmay file almost all the tax statements via the Internet. Internet-based filing ismandatory for corporations and individuals that perform professional or business activities. ThePortugueseTaxAdministrationreliesontheInternetandthishasspurredinthelastfewyearsasignificant



growthintheadhesionbytaxpayerstothischannelforthecompliancewiththeirtaxobligations,includingthosewhoarenotmandatedtofileviatheInternet.

ThefollowingchartillustratestheevolutionofInternet-basedtaxstatementsbyindividualsandshowsthesignificantgrowthoftaxstatementsfiledaccordingtothismodalityinthelastfewyears.

In2007,theIIT(IndividualIncomeTax)statementsfiledviatheInternetforthefirsttimeexceededthenumberofstatementsfiledonpaper,with60%oftaxpayersfilingtheirstatementselectronically(52%inPhase1–comprisingtaxpayerswhoonlyearnincomefromemploymentandpensions,whoarenotmandatedtofiletheirtaxstatementselectronically;and72%inPhase2,comprisingtaxpayerswhoearnadifferenttypeofincome).

OneofthekeyfactorsthatspurredthesignificantgrowthoftheindividualtaxstatementsfiledviatheInternetrecordedin2007wastheimplementationofthepre-completionsystemfortaxstatements.

This system is only available for the statements filed via the Internet. In the year 2007 (when theimplementationwaslaunched),thepre-completionsystemcoveredtheincomefromemploymentandpensions,andthewithholdingsonsuchincome.

In2008,thepre-completioninitiativewassignificantlyexpandedtoincludethefollowingamounts: Mandatorysocialsecuritycontributions; Unioncontributions; Withholdingsonprofessionalandbusinessincomeandidentificationofthewithholdingagencies; Advancepaymentsmadeintheareaoftheprofessionalandbusinessactivities; Capitalgainssubjecttomandatorytaxesandwithholdings; Withholdingsonequityincreases; Exemptedincomesubjecttotaxationandwithholdings;

InadditiontorelyingontheInternetchannel,thePortugueseTaxAdministrationhasprioritizede-mail,tonotonlyanswertherequestsforclarificationfiledbytaxpayers,butalsoasthepreferredtooltoforwardcommunications,messagesandannouncements.

Infact,thee-mailchannelisincreasinglyemployedtoforwardinformativemessagesonthenewInternetservicesavailableandtheformofaccessingthem,aswellastosendannouncementstotaxpayers,withrelationtothedeadlinestomeettaxobligations,alongwiththeinformationonhowtomeetsuchobligations.

By issuing suchannouncements/alerts,we intend to assist taxpayers in the compliancewith theirtaxobligationsinduetimeandmanner,whilewecomeclosertothemandreducethecoststiedtocompliancewithsuchobligations.



Intheshortterm,wealsointendtoemploySMSMessagesinordertoissuealertsandannouncementstotaxpayerswhenpossible.

In the futureand in the frameworkof the implementation in theFinanceServicesofanAssistanceManagementSysteminanITapplicationthatenablesthedisseminationofcontentviaaCorporateTVsystem,theDGCIintendstodevelopandmakesuchpotentialmoredynamicbytheproductionofinformativecontentofinterestfortaxpayers.

Alongwiththeavailabilityofmultipleaccesschannels,theDGCIannuallyperformsdiagnosiswiththepurposeofevaluatingservicesandlevelsofcustomersatisfaction(taxpayers).

Themethodology employed consists in, fundamentally, conducting questionnaires and personalinterviewsforthedifferenttypesofusersandseekstoevaluate:

The functionalities, servicesandaccess channelsmostwidelyusedwith regards to theTaxAdministration;

ThelevelsofsatisfactionofdifferenttypesofusersintheirrelationwiththeTaxAdministration; Thekeydifficultiesperceivedinsuchrelation; Improvementsuggestions.

TheresultsofthequestionnairesarepostedontheInternetandthemassmedia,specificallynewspapers.

2. Developing in citizens (taxpayers) a greater perception of equity and justice in the tax system.

Intheaxisoftaxpayers’greaterperceptionofthetaxsystemequityandjustice,itisvitalfortaxpayerstoenjoysimpleandeasyaccesstotheinformationontheactivitiesconductedbytheTaxAdministrationandtheperformanceresults.

InthecaseofthePortugueseTaxAdministration,traditionally,theavailabilityofsuchinformationhasbeenbasedonthepublicdisseminationoftheAnnualPlansandActivities’Reports.

Inthelastfewyears,thePortugueseTaxAdministrationhasbecomeincreasinglyawarethatcitizens’knowledgeofitsactivityandresultsbearsapositiveimpact.Consequently,ithasdecidednotonlytomaketheinformationrenderedatthislevelbroader,butalsothediversificationofthemeansemployedforsuchpurpose,especiallytakingadvantageofthepotentialinthenewtechnologiesintroducedasregardscommunication.

Therefore,inadditiontopostingontheInternettheforegoingdocuments(plansandactivities’reports),weregularlymakeavailablestatisticaldatarelativetotherevenuecollectedfromthedifferenttaxes,whethertheonearisingfromtheamountsfiledvoluntarilybytaxpayersorfromtaxinspections(adjustmentsontheamountsfiledbytaxpayers).

Theimplementationofnewautomatedcontrolandinformationcrossingmechanismsandtherespectiveoutcomesarealsodisseminated,and thesameapplies to theactionsperformedby the inspectionservices.Theresultsaredisclosedasaggregatefigures,whichprotectstheconfidentialitythereof.

Inthisaxis,themostbroadlyusedcommunicationtoolsaretheTaxAdministrationWebsite(aprioritychannel for this purpose aswell), presentations to specialized entities,massmedia (especially,newspapers)andtheDGCIquarterlypublication.



3. Deter tax evasion and tax fraud.

Anotheraxisoftheefficientcommunicationpolicyshallbe,asmentionedabove,effectsthatdetertaxevasionandtaxfraud,arisingfromanincreasedriskperceptionandthecoststiedtononcompliance.

Inthisregards,andinlinewiththeforegoingaxis,itisvitalthattaxpayersaccesstheinformationthatenablesthemtoevaluatetheefficacyoftheactionsundertakenbytheTaxAdministrationincombatingtaxnoncompliance.Taxpayersshallperceivethatthereisaneffectiveactionagainstnoncomplianceand that theTaxAdministrationdemandsnoncompliant taxpayers to amend their situation,with asignificantcostincrease.

Inordertoreachthispurpose,thePortugueseTaxAdministrationhasdisseminated,systematicallyandrecurrently,thecontrolactions,automatedandinspections,andtherespectiveresults,suchasthenumberofdebtorsandirregularsituationsdetected,thetaxandinterestamountassessed,thepunitiveinterestapplied,thenumberofcasesundercriminalprosecution,etc.

Thetoolsemployedinthedisseminationofthistypeofresultsare,fundamentally,theTaxAdministrationWebsiteandthemassmedia.

Eveninthisaxis,since2006,theTaxAdministrationhasbeendisseminatingviatheInternetalistofthedelinquenttaxpayers,whichmaybeaccessedbythepublic.

Disclosingthislistischieflyaimedatinducingtaxpayerswhoholdtaxdebtstoamendtheirsituationvoluntarilyandthusavoidbeingincludedonsuchlist.

Thismeasurehasproducedapositiveeffect,sinceaverylargenumberoftaxpayerspaidtheirtaxdebts.

4. Contributing to a greater “tax education” and developing a “compliance culture” in citizens.

Intheareaoftaxeducation,IshallfocusontworecentexperiencesofthePortugueseTaxAdministration.

TaxEducationProject.

Traditionally-exceptforcertaininitiativesintheimplementationoftaxreforms-thetaxeducationaxishasbeenlargelyabsentfromthePortugueseTaxAdministration’scommunicationpolicy.

Thissituationhasbeenrecentlymodified,whenwelaunchedinJuneof2006,ataxeducationproject,whosemainpurposewasandstillis,thepromotionofgreatercivic-taxawarenessincitizens,ingeneral,andyouths,inparticular.

Thegreaterfocusontheyoungersegmentsofthepopulationisjustifiedinthefaceofthesignificantroletheyplayineconomicallydevelopedsocieties,whetherintermsofincome(consumptionofgoodsandservices)orintermsofgovernmentspending(educationandhealth).Thus,itisdeemedrelevantthattheydevelopandinternalizeacivic-taxawarenessthatwillprevailintheiradulthoodandmakesthemcooperativecitizens,compliantwithtaxobligations.

Theinitiativesalreadyundertakeninthesphereofthisprojectshallbefundamentallymaterializedby:

ThedevelopmentandexecutionofatravelingExhibition; Thedesignandexecutionofagameandthreebooksthatshallbedistributedmostlyduring

theExhibition.



Thirtypanelsdivided,chiefly,intofivechaptersmakeuptheExhibition:

I) Historyandlifeoftaxes,withabriefoverviewoftheHistoryofTaxesinPortugal(When?);II) Whymeettaxobligations,basedonethicalandcivicvaluesand,ultimately,personaland

socialhonesty.(Why?);III) A brief overviewof thePortuguese tax system, highlighting themain taxes under the

administrationoftheGeneralTaxDirectorate(Whichones?);IV) Formsofobtainingrevenue,theStateBudget,therelevanceoftaxestocounterdeficit,the

TaxAdministration(How?);V) Allocationofgovernmentfunds,thatistosay,whytaxmoneyisvitalandhowitisemployed.

(Whatfor?).

TheexhibitionopenedonthepremisesoftheMinistryofFinanceinLisbonandvisitedotherlocationsthereafter,suchastheUniversityofLawofLisbonandtheUniversityofEconomyofCoimbra.Currently,itisvisitingthecityofPorto,intheOfficeofthePresidentoftheUniversityofPortoandshallmoveontoothercitiessinceitspurposeistotourthewholecountry.

Todate,averylargenumberofcitizenshaveattendedtheExhibition,inparticularhighschoolstudents.

Asmentionedbefore,andinadditiontothetravelingexhibition,wecreatedadidacticgameandtwocomicbooksandamoretechnicalbookwithabriefdescriptionofthePortugueseTaxSystem.

TheDGCIplanstocontinuewiththetaxeducationproject,promotingotherinitiativesinthearea,suchas,theincorporationonitsWebsiteofaspecificareaontaxeducationaimedatstudents,parentsandprofessors.

“RequestyourInvoice”Campaign.

Althoughithasnotbeenincludedinthesphereofthetaxeducationproject,theGeneralTaxDirectoratelaunchedanadvertisingcampaignbythenameof“RequestyourInvoice”,aimedatcreatingawarenessincitizenswithrespect to the importanceof theactofdemandingthe invoiceasregardsvoluntarycompliancewithtaxobligations.

Thiscampaignwasgearedat informingcitizenswithabouttheroletheymayplay inpromotingtaxequityandjustice,iftheyadoptbehaviorsthatleadtotheeconomicagents’greatercomplianceoverall,inthiscase,byalwaysdemandinganinvoicewhentheypurchasegoodsandservices.Inthisregard,the“RequestyourInvoice”campaignisalsoinlinewithtaxeducationinitiative.

The campaignwas launched inMarchof 2007andcovered thedifferentmassmedia, specificallytelevision,fora2-monthterm.

Atthesametime,wedesignedsignsandpostersplacedindifferentDGCIbuildingsandservices.

5. Certain indices on the performance of the Portuguese Tax Administration in the last few years.

Inthelastfewyears,wehaveexperiencedasignificantgrowthinthelevelsofvoluntarycompliance,fundamentallybasedonafasterandmoreeffectiveactionagainsttaxevasionandtaxfraud.Thishasbeenbasedeitherontheintroductionofautomatedmechanismsthatenabledtoconductmasscontrolsvia information crossingactions, or by theeffort of the tax inspection, granting itmoreandbettermeanstocombattaxfraudandtaxevasion,oreven,bymakingthecooperationwithotherentitieswithinspectionpowersmoredynamic.



Infact,thegreaterfocusofthePortugueseTaxAdministrationoncommunicationhasalsocontributedtotheincreaseinthelevelsofvoluntarycompliance,specifically,asreferstothedisseminationoftheresultsoftheiractions,asaformofinducingagreaterriskperception,andconsequently,agreaterpredispositiontocompliance(alwaystiedtotheconcernforfacilitatingcompliance,bysimplifyingtaxobligationsanddisseminatingtheinformationandassistingtaxpayerswithregardstotaxobligations’compliance).

Forillustrationpurposes,wepresentanumberofefficiencyindicesofthePortugueseTaxAdministrationperformance.

ThefollowingchartshowstheevolutionoftherevenuecollectedbytheDGCIandtheGrossDomesticProduct(GDP)atnominalvaluesintheperiodbetween2004and2007.

WemayobservethattheweightofrevenueonthenominalGDPhassuccessivelyincreasedandthat,inaccruedterms,therevenuecollectedbytheDGCIincreasedby24.5%intheperiodunderstudy,whilethenominalGDPgrowthwascloseto12.8%.

Thedifferencebetweenbothgrowthratesischieflybasedontheimprovedtaxefficiencyintheperiodunderstudy,aswemayobserveinthefollowingchart,whichpresentsthetaxefficiencyvaluesfortheyearsunderstudy,determinedbythedifferenceofthenominalGDPgrowthrateandtherevenuegrowthratenetofrefundsandcorrectedforextraordinaryeffects.

An identicalconclusionmaybedrawnfromtheanalysisof theevolutionof theState’snet revenuecollectedbytheDGCI(includingincomefrommunicipaltaxes),asillustratedonthefollowingchart.



2004 2005 ?% 2006? % 2007** ?%

11,307.9 11,519.2 1.9% 12,617.2 9.5% 14,778,2 17.1%

10,756.8 12,206.7 13.5% 12,954.0 6.1% 13,654.9 5.4%

569.95 08.2 -10.8% 540.1 6.3% 621.7 15.1%

22,634.6 24,234.1 7.1% 26,111.3 7.7% 29,054.8 11.3%

**Preliminary* Net Revenue = Gross Revenue - Refunds -T ransfers

Total

(Million Euros)

NetRevenue*oftheStateadministratedbytheDGCI

DirectTaxes

IndirectTaxes

Other

IV. Conclusions

Thelowpopularityofthetaxcollectiontaskmakestheadoptionofefficientcommunicationpoliciesoneofthekeyfactorstoincreasetaxpayers’levelsofcompliancewithtaxobligations.Iftaxpayersareappropriatelyinformedoftheirrightsandobligations,andeventheTaxAdministration’sactivityandtherespectiveoutcomes,agreatertrendtowardscomplianceshallbeachieved.

Anefficientcommunicationpolicyshallfundamentallyspanfouraxes:(i) informingtaxpayers,onasimpleandexpeditiousbasis,abouttheirrightsandobligationsandassistingtheminthecompliancethereof;(ii)creatingincitizens(taxpayers)agreaterperceptionofequityandjusticeofthetaxsystem;(iii)contributingtodetertaxevasionandtaxfraud;(iv)contributingtoagreater“taxeducation”andthedevelopmentofa“complianceculture”.

ThechallengefacedbytheTaxAdministrationsistouseeffectivelytheavailablecommunicationmedia,specificallythosearisingfromthenewtechnologies,inordertoachievesuccessinthefouraxesofthecommunicationpolicy,adoptingsolutionsthatbringthemclosertotaxpayers,facilitatingandimprovingtheirrelationwiththeAdministration.



1. Introduction.

2. Definitionofscopeandcontent.

3. Discussion.a) Thevalueofcommunication,engagementand

dialogueaspartofacompliancestrategy.b) Integratinganapproachofeducation&outreach,

serviceandenforcement.c) Educationandoutreach.d) Service.e) Enforcement.f) Usingthemediatoyouradvantage.g) Thebenefitsofenhancedcommunication.

4) Conclusions

Policies for Communicating with Society and New Methods for Rendering them More Efficient

Edward KieswetterSouthAfrica

1) INTRODUCTION

Ensuringthattaxpayersknowwhattheirobligationsare,andhowtomeetthem,arecriticalelementsinanycompliancestrategy.

Theuseoftraditionalcommunicationsmediahasproventobeeffective,yetthereareanumberofmoreinnovativemechanismsthatcouldaugmenttheothermoreconventionalapproaches.

2) DEFINITION OF SCOPE AND CONTENT

Thispaperseekstobrieflyexplorethebenefitsofanenhancedcommunicationstrategywithsociety,and reflects on relevant considerationsand challenges that informor influencea communicationsstrategywithsociety.

3) DISCUSSION

a) The value of communication, engagement and dialogue as part of a compliance strategy

Whenpunishmentratherthandialogueisintheforegroundofregulatoryencounters,itisbasictohumanpsychologytoexperiencethisasconfrontational,whichwillresultinresentmentandresistanceonthepartoftaxpayers.

Substantivedialoguebetweenrevenueadministratorsandtaxpayerscontributestoawin-winstrategy.Theroleofcommunication,dialogueandengagementinshapingcomplianceinaregulatoryenvironmenthasformedthebasisforanumberofrecentpiecesofresearch.Someofthemorerelevantfindingsincludethefollowingobservations1:

• Regulationscanbeeasier toapply,monitor,andenforce if theyhavebeendeveloped inaprocess of dialogue and consultationbetweentherevenueadministratorandtaxpayers.

• Althoughco-operative and persuasive strategiesarenotalwaysappropriate,whentheyaresuccessfultheyare superior to punitive sanctionsineffectivelyandefficientlyaccomplishinglongertermcompliance.

• A largebodyof researchconfirmsthatnon-coercive and informal alternativesare likelytobe more effective than coercive lawinachievinglongtermcompliancewithnorms,andcoercivelawismosteffectivewhenitisreservedasalastresort.

• Thereissignificantpsychologicalevidencefora“minimalsufficiencyprinciple”thatthelesspowerfulthetechniqueusedtosecurecompliance,themorelikelyislongterminternalizationofadesiretocomply.Compliancecanbesecureddespiteweaksanctionsthroughdiscoursepersuasionandco-operation.

• Co-operativestrategies of trust, restorative shaming, and praise aremoreeffectiveatincreasingbusinesscompliancewithregulationthantheapplicationofformalsanctions.

InaSouthAfricancontextwehavecertainlyfoundtheresearchfindingstoreflectourownexperience.

b) Integrating an approach of education & outreach, service and enforcement

Whilstcommunicationtotaxpayersiscritical,itisequallycrucialthatthecommunicationnotbeone-way.Withouttruetwo-wayengagement,aimedatgainingasharedunderstandingoftherealitiesthatfaceboththerevenueadministrationandthetaxpayer,nocommunicationsstrategycanbesuccessful.

1 For a detailed analysis see for example the paper on “Reducing the risk of policy failure: Challenges for regulatory compliance” published by the OECD.


38 ASSISTANCE Edward Kieswetter

Foranycompliancestrategytosucceed,arevenueadministrationneedstounderstanditstaxpayers:Whatwillmakecompliancedifficultforthem?Whatwillmotivatethemtowanttocomply?Whattechnicalchangeswillcompliancemeanfortheirbusinessormanufacturingprocesses?Whatfinancialimpactswillcompliancehave?

Anadequatelevelofunderstandingofatargetpopulationisunlikelytobeachievedwithoutsignificantcommunication,dialogueandengagementwithtaxpayersandtheirrepresentatives,whichmakestheseactivitiescriticalelementsinacompliancestrategy.

Thiscouldmeanthatpolicymakingprocessesinthefuturewouldconsistmainlyofinteractiveworkingmethodsbetweentheregulatorsandtheregulated.

Ourbroadercommunicationsstrategyandpolicyusesmassmediachannels(suchastelevisionandmostwidelyreadpublications)tocommunicatearangeofmessages,whicharecomplementary.Itisalsooursubmissionthatanymasscommunicationsapproachshouldincludethefollowingfacets:• SARSwillcontinuallymakeiteasierandsimplerforhonesttaxpayerstocomply• SARSwillnothesitatetoactagainstblatantnon-compliance• Detailsofeducationchannels• Detailsofsubmissionchannels• Detailsofotherinteractiveoutreachandcomplianceactivities

Inthisregard,ourrecent2007mediacampaignsoughttobalancethefriendlyfaceofSARSwithSARSasaregulator.

c) Education and outreach

In a SouthAfrican contextwe have committed ourselves to engagingwith taxpayers and theirrepresentativesproactivelyandconstructively.Onapracticallevelwegiveeffecttothiscommitmentthrough(forexample)thefollowinginitiatives:

• Continuousengagementwithtaxpractitioners/intermediariesandtheirprofessionalbodies,rangingfromfrequentsurveysandpolls,toopportunitiestocommentonnewbusinessprocesses,formsandlegislationbeforeimplementation.

• Walk-abouts,wherewemakeunannouncedvisitstobusinesses,andwhichallowustoassesscomplianceattitudesandbarrierstocompliancefirst-hand.

Taxpayers’compliancebehaviouristypicallydictatedbyoneofthreevariables:

• Theirknowledgeoftheirobligationsandhowtomeetthem,• Theirwillingnesstocomply,and• Theiractualabilitytocomplywiththesetobligations.

Forarevenueadministration’scommunicationsstrategyandpolicytobeeffective,itneedstoaddresstheentirecontinuumofthesethreevariables.

In the South African context we have sought to achieve this through the following:

• Knowledge of obligations and how to meet them,whichwefocusonthrough:

o Makingourtaxformsandguidesavailableinall11ofourofficiallanguages(witheffectfrom2008);

o Dedicatededucationalcoordinatorsinregions;


39ASSISTANCE Edward Kieswetter

o Specific focus initiatives toensure that focusgroupsare kept informedabout theirobligations;

o Analysisoffrequenterrorsmadeinrespectofsubmissionsanddeclarations,whichinformstheeducationplatformfortaxpayers,andwhicharecommunicatedtotargetaudiencessuchastaxpractitioners/intermediaries;

• Willingness to comply,whichwefocusonthroughthefollowing:o Weknowthatlackofadequateconsultationmayfailtosecuretargetgroupsupportfor

theproposedregulation.o Wearekeenlyawareof the impact thathighcompliancecostshaveon taxpayers’

willingnesstocomply.Increasinglyweareseekingtoimplementanapproachtoensurethataregulatoryimpactassessmentisdonebeforeimplementationofnewregulations,specificallythroughproactiveandconstructiveengagementwithaffectedtaxpayers.

o Taxpayersloseconfidenceintaxadministrationsiftheyarerequiredtocomplywithtechnical rules that do not appear to relate to any substantive purposed – in ourengagementswithtaxpayersandtheirrepresentativeswearethereforealsoincreasinglyseekingtobemoreopenandtransparentaboutourownrealitiesandthereasonsandmotivationsthatdriveourbusiness.

• Actual ability to comply with the set obligations,whichwespecificallyfocusonthroughupfrontengagementwithtaxpayersandtheirrepresentatives,toensurethatwefullyunderstandtheirabilitytocomplywithobligations.Theengagementstypicallyconsistofanopportunitytoreviewcurrentdevelopments,tomakesubmissionsorproposealternativemodels,andtoprovideinputaimedatensuringthatthetargetaudiencewouldbeabletocomplywiththeobligationsset.

d) Service

Fromaserviceperspective,weknowthattaxpayers’compliancebehaviourissimilarlytypicallydictatedbyoneofthreevariables:

o Theirknowledgeoftheirobligationsandhowtomeetthem,o Theirwillingnesstocomply,ando Theiractualabilitytocomplywiththesetobligations.

Researchershavefoundthatiftaxpayersfeeltheyaretreatedunfairlybyataxadministration,thentheywilloftenrespondbyrefusingtocomplywithregulatoryrequirements.Wearethereforealsoincreasinglyseekingtoensurethatourcommunicationsstrategygivestaxpayerstheassurancethattheyarebeingtreatedinaccordancewithasetofpre-definedguidelinesorrules,andthattheyknowthattheyhavearecoursetoanindependentcomplaintsbodyshouldtheyfeelthattheyhavebeentreatedunfairly.

Ourmediacampaignsthereforealsofocusspecificallyonthefactthatourserviceofferingsareverymuchdrivenbythedesiretobuildbrandloyalty,aimedatensuringtaxpayers’willingnesstocomply,andbythedesiretoensurethattaxpayersareinfactempoweredtocomplywiththeirobligations,bymakingiteasytocomply,increasingouraccessibility,andbyreducingboththeburdenandcostofcompliance.

However,we are also keenly aware of the fact that different factorsmotivate different taxpayersdifferently,andthattherealitiesthatimpactontheirabilityandwillingnesstocomplydifferbetweensectors,segmentsandtaxpayertypes.Amassmediaapproachisnotsufficientinandofitself,andwethereforeseektocommunicatewithtaxpayersandengagewiththemonarangeofdifferentplatformsandonthebasisofatailoredapproachwhichincludes:

• ALargeBusinessCentre(focusingonlargelistedcorporates)



• ASmallBusinessUnit(focusingonsmallbusinesses)• APractitionersUnit(focusingonengagementwithtaxpractitioners/intermediaries)• ATaxpayerOutreach&EducationUnit• ThecreationofadedicatedEmployersUnit,focusingonengagementwithEmployerswhoactas

ourAgents.

The intentionwiththededicatedunits isalignedwithourSegmentationstrategyandtoensurethatappropriate two-waydialogueandengagement informsour decisions, and that affected taxpayersunderstandtherationalebehindbusinessdecisions,thattheyfeeltheyhavehadanopportunitytoshapetheprocess,andthattheyarebothwillingandabletocomplywiththeirobligations.

Purelyfromamorepracticalperspective,ourassessmentshowsthatwhenevernoticesorupdatesaresenttoourtaxpractitioners/intermediaries,callvolumestotheCallCentretendtodropsubstantiallysoonafter–thisalonegivesussomesenseofcomfortthatourtailoredcommunicationsprovidecertaintyin themarketplace. In thisway,externalcommunicationnotonlyserves tokeepourstakeholdersinformed,italsoalleviatespressuresonoperations.

e) Enforcement

Thethirdelementofourcompliancestrategy,andafactorthatimpactsonataxpayers’willingnesstocomply,relatestoataxpayer’sperceptionoftheprobabilitiesofdetectionoftheirnon-compliance,andtheconsequencesifdetected.

InourcommunicationsstrategywefocusonthemessagethatSARSwillcontinuallymakeiteasierandsimplerforhonesttaxpayerstocomply,butwillnothesitatetoactagainstblatantnon-compliance.

Wearethereforealsoincreasinglyseekingtocommunicatetheconsequencesofnon-compliance,aswellasoursuccessesindetectingandaddressingnon-compliance,throughforexamplethepublicationofthenamesofoffenders(albeitonlyonceconvicted).

f) Using the media to your advantage

In2007SARSlaunchedextensivechangestoitsassessmentprocess(includingtheuseofAdobesmartreturns, theuseofscanningtechnologytoprocessreturns, theability tocapturetaxpayers’returnselectronicallywhilstservingthemoveracounteratabranch,andasubstantialincreaseintheuseofelectronicchannels.)Anyprogrammeasambitiousasthisonewasboundtoencounterchallenges.

OneofthekeyelementstooursuccessfulimplementationwastheinvolvementofthemediaandensuringthattheywerekeptinformedaboutdevelopmentsatSARS.

Whilst themedia should certainly retain its independence, their support for our initiatives remainsinvaluable.Inthisregardweareincreasinglymakinguseofbriefingopportunitiesforthemedia,wherewespecificallyseektosketchthecontextwithinwhichcertaindevelopmentshappen.

Giventhecorrectcontext,webelievethemediashouldtheninapositiontocommentonthechallengeswefacemoreobjectively.

g) The benefits of enhanced communication

Whilst thebenefitsofanenhancedcommunicationsstrategyandpolicywithsocietyaresomewhatself-evident,theydoperhapswarrantaspecificmention.



• Aclearcommunicationspolicyandapproachallowsarevenueadministrationtogiveeffecttoitscompliance strategy, and to truly influence taxpayers’ compliancebehaviour, throughensuringtaxpayers’buy-inandtaxpayersbeingbothwillingandabletocomplywiththeirobligations.

• Itresultsinfewererrorsmadebytaxpayersandtheirtaxpractitioners/intermediaries,whichinturnmeanslessadministrativeinterventionrequiredonthepartofthetaxadministration.

• Italsomeansthatmorecostlyandconfrontationalenforcementactivitiescanbeheldoverforthemoreseverecasesofintentionalnon-compliance.

• Furthermore, upfront engagement and dialogue ensures that business processes that areimplementedareperhapsmorepragmaticandsensible,withtaxpayersbeingabletocomply,whichultimatelyresultsinlessfrictionandlessreworklaterintheprocess.

• External communication not only serves to keep our stakeholders informed, it also alleviatespressuresonoperationsthroughthereductionofunnecessaryqueriesfromtaxpayersandtheirtaxpractitioners/intermediaries.

• Effectivecommunicationiskeytobringingalevelcertaintytotaxpayers,andhasapositiveeffectonthecomplianceculture,andconsequentlevelofcompliance.

4) CONCLUSIONS

Awide-rangingcommunicationsapproachnotonlyservestokeepourstakeholdersinformed,italsoalleviatespressuresonoperationsthroughthereductionofunnecessaryqueriesfromtaxpayersandtheirtaxpractitioners/intermediaries.Ultimately,itallowsataxadministrationtotrulyinfluencetaxpayers’compliancebehaviour,throughensuringtaxpayers’buy-inandtaxpayersbeingbothwillingandabletocomplywiththeirobligations.



I. Diffusionoftaxpayerrightsandobligations.I.1.Impersonalizedinformationandassistance.I.2.Personalizedinformationandassistance.

II. Electronicadministration.

III.Specificattentiontoselectedgroup.III.1.Taxeducation.III.2.Informationandassistancetothedisabled.

IV.Departmentsandprocedurestodealwithtaxpayers’claims.IV.1.Taxprocedures.IV.2.Remediesandclaimsregardingadministrativeactsand

actions.IV.3.Complaintsandsuggestionsfiledbeforethetaxpayer

advocatecouncil.IV.4.Complaintsfiledbeforetheombudsman.

V. Transparencyandothercitizenparticipationmeans.V.1.Transparency.V.2.Citizenparticipationinsurveys,studiesandanalysis.

VI. Conclusions.

The Dissemination of Duties and Rights of the Taxpayers and the Entities and Procedures forHandling their Claims

Luis Pedroche y RojoSpain

I. DIFFUSION OF TAXPAYER RIGHTS AND OBLIGATIONS

ThedisseminationoftaxpayerrightsandobligationsisarequirementthatcharacterizestheactionsofmodernTaxAdministrations,anditcomesfromtheneedtoreachabalancebetweenthetaxpayers’legalposition,andtheTaxAdministrations.

Thisneedhasbeencontinuouslypresentduring the tax reformprocessofour legal systemsincetheenactmentofourSpanishConstitution in1978andwhereLaw1/1998,ofFebruary26

thstands

out in importance regardingTaxpayerRightsandGuarantees,whichmainobjective is to reinforcethe substantive rights of taxpayers and to improve their constitutional rights among the differenttaxationprocedures,by reinforcing thecorrelatedobligationsof theTaxAdministration.Today, therightscontainedintheabovementionedLaw1/1998,ofTaxpayerRightsandGuarantees,hasbeenincorporated into the regulation of the new Law 58/2003, of December 17, the General Tax Law(hereinafterreferredtoasLGT).

ThenewLGT recognizes,amongothers, taxpayer’s rights tobe informedandassistedby theTaxAdministration,ontheirdutytoexercisetheirrightsandtheircompliancewiththeirtaxobligations[article34.1.a)].Inthesamemanner,andtocompletethisrecognition,itestablishesthattheAdministrationisobligedtoprovidetaxpayerswiththenecessaryinformationandassistanceregardingtheirrightsandobligations.(Article85.1)

Thesegenericinformationandassistancedutiesaregatheredupinaseriesofinstruments,collectedbytheLGT,whichcanbestructuredintotwolargegroups:

I.1. Impersonalized information and assistance

1 Publicationofupdatedbookscontainingtaxlawsandadministrativedoctrine,and,2 Communicationsandinformationactionsperformedbytheservicesdirectedtosucheffects,within

thedepartmentsoftaxadministration.

I.2. Personalized information and assistance

1 Communications and actions performed by services intended to such effects, within thedepartmentsofthetaxadministration.

2 Repliestowritteninquiries.3 Previousassessmentactions.4 Taxpayerassistancewhenfilingareturn,self-assessmentsandtaxinformation.

A particular aspect of Spain’s judiciary system, regarding information and assistance, is that theperformanceof theTaxAdministrationhasto take intoaccount thedifferent languagesused intheStateofSpain.Inthismanner,theTaxAgency,hasbeenpromotingthedifferentSpanishlanguagesusedfordocumentationandcommunicationthatareaimedtoitscitizens,suchasamethodtoimprovetheknowledge that taxpayershaveregarding their rightsanddutiesand to facilitate thesecitizens’exerciseoftheirobligationsusingdifferentjointofficiallanguages.

I.1. Impersonalized information and assistance: Provided to all citizens in general,without anyspecialrequestsreceivedfromthem.Thefollowingadministrativeactionsare instructedasgeneraldispositions:

I.1.1.-OnthesubjectofPublicationofupdatedtaxnormsandadministrativedoctrine:



a.DistributedbytheDepartmentofTreasury,duringthefirsttrimesteroftheyear,containsupdatedmaterialconcerningthestate’sregulations,regardingthemostimportanttaxlawsandRoyaldecreesthathascreatedvariationsinrespecttoactualmaterialsfromthepreviousyear,aswellasanyrelationofanytaxdispositionthathasbeenapprovedduringthesaidyear(article86.1LGT).

b.InformationthattheTaxAdministrationprovidestothetaxpayerinrelationtoadministrativeregulation(article87LGT)mainlyreferstoas:

• -Establishedadministrativecriteriathatenforcestaxlaws,• -Consultationofinformalbaseswheresaidcriteriaiscontained,and,• -Remissionofcommunicationdestinedtoinformaboutsomeinstitution’staxpractice,activitiesor

incomeorigin.

Bypublicizingupdatedtaxlawsandadministrativeregulationmaterials,issignificanttomentiontheeffortmadebytheMinistryofTreasury’swebpage,www.portal.minhac.es,wherearelatedlink“LawsandRegulations”describesthelawswhenenforcingaspecificissue,andregulationsdependingonthedepartmentwhereitcomesfrom(GeneralTaxManagement,Economic-AdministrativeCourt,etc.).Inthesamemanner,it isusefulthatinthisfield,theTaxAgencyhasdevelopedawebpage,www.agenciatributaria.es,whereyoucanaccessupdatedtaxlawsandinstitutionresolutionssuchastheGeneralTaxManagement,CentralEconomic-AdministrativeCourt,etc.

I.1.2.-InreferencetotheCommunicationandimpersonalizedperformance,themostrelevantactionsare:

a.Letter of Services1,hasbyobjectivetonotifycitizens,thattheTaxAgencymakesavailabletotheirusage,qualitycommitmentsassumedbytheir taxpayment,andknownrights inrelationtotheTaxAdministration.

b.Theinformationtransmittedthroughpubliccampaigns,suchasinstitutionalcharacter,aswellasspecificproductsorTaxAgencycampaignsthatarecreatedthroughdifferentcommunicationmedia,newspaperandtelevision.

c.Informative publicationeditionswhichobjectiveistooffertaxpayers,specificinformationregardingtaxpaymentthatcouldaffectthem.

d.Sendinginformative letters–in2004reachedtheamountof17,434,177lettersandthepracticaleditionsofguides and manuals, for thecreationofdiverse taxreturn(basically Individual IncomeTax-IIT,CorporateTax,ValueAddedTaxandfulfillmentofanyotherformalobligations).Infact,thenumberofmanualseditedin2004ascendedto504,900.2

I.2. Personalized information and assistance. Includes all information services that the TaxAdministrationprovidesitscitizensandcomprisesaseriesofadministrativeperformancesthatshallbegroupedasfollows:

I.2.1.-InthematterofCommunicationandpersonalizedinformationperformance:

a.Provides,attherequestofthoseinterested,the integration of counsel or specific resolutions book,comprisingallreferencesanddatathatcanidentifythosepeopleaffected.

1 Approved by the General Manager of the Tax Administration State Agency on July 26th, 2001 and it will be updated during the first quarter of 2005.

2 Data related to the Year 2004 contained in this document is temporary.



b.General telephone information centralizedunderonetelephonenumberforthenationalterritoryand independent from theBranchofAdministration and InformationServices thatmakespossiblegeneraltaxinformation.

c.Voice recognition units (901121224).Areautomated telephoneunits,whichschedulecouldreach24hoursofconsecutiveassistanceandoffermainlythefollowingservices:

• Identificationcardrequest,taxcertificatesorfiscaldatafortaxreturns• Automaticinformationregardingtaxrefunds,VATandCorporations.

ThenumberofcallsprocessedbytheseUnitsin2004was3.180.339.

d.Post Office Box 993carriesoutamongothers,thefollowingfunctions:

• Resolutionoftaxconcerns;• ComplaintsfiledagainstdifferentTaxAdministrations;• Informationregardingthestatusofanyadministrativefilethattheinterestedpartyrequests;• Timelyacceptanceandprocessofanyrelateddocumentation,suggestionorproblemregarding

theapplicationandinterpretationoftaxlaws;• DistributionofcertainpublicationsoftheTaxAgency.

e.Sending fiscal data. This is a service specialized by its objective, to provide information andpreventiveassistance that isoffered tocitizens thathavefileda tax return,or it isoffered throughspecificpubliccampaigns.Thoseinterested,filetheirrequeststhroughautomatedvoiceunits,internetordirectlytotheTaxAgencyoffice,andinreturn,theinformationissenttotheinterestedpartyfiscaladdress3,bymail,attachinganexplanatoryletterforpossiblecorrectionsandrectifications,thatcouldhavebeenincludedinthetaxreturnenvelopeorcouldhavebeensentthroughtheInternettothosethatfiledtheirreturninsuchmanner,sothatinthefuturecanbeusedasproofoffiling.Thenumberoffiscaldatarequestsin2004was7,368,121.

f.TheINFORMAsoftwarethatassiststhetaxpayer,consistinagroupofinformation,madeofquestionsandanswerstothetaxpayer,andistheprincipalreasontoobtainfromtheTaxAdministration,writteninformationregardingtaxinformation,italsoworksasanessentialtechnicalinstrumentthatsupportsinformation services. The number of consultation to INFORMATION in 2004 was 2,984,408, incomparisonto1,377,618thatweremadethroughtheInternet.

I.2.2.-ImpersonalizedinformationandassistanceisalsogivenbytheResponsetowrittenconsultations.(Article88LGT).

ObligedTaxpayers,aswellasspecificcollectiveentities,cancreatewrittenconsultationstotheTaxAdministration.TheseconsultationscouldbedefinedasrequestsmadetotheAdministrationsothatatopiccanbecreatedforthoseaffected,andcouldbereferredtointerpretationuncertaintiesrelatedtothecompletionofmaterialobligation,totheexecutionofrightsortheexecutionofformalmaterialobligationsor tomanagement,classificationor taxqualificationand that ineachcasebelongstothetaxpayer.

3 Never to the petitioner, to ensure confidentiality.



The response from written tax consultation, formulated by legal terms before mentioned4, ischaracterizedbycontaining:

- Bindingnature5, insuchmanner that thedepartment inchargeof taxenforcementshallbeadjustedtowhathasbeenanswereddependingontheconsultationmade.Inconsequence,ifthetaxpayerfollowsthecriteriacontainedintheconsultation’sresponse,then theAdministration shall limit their efforts to verify the coincidence between the issueinquiredandtherealityofthetaxpayersituationandtheapplicationofthecriteriacontainedintheresponse.

- Toextendbindingeffectstoathirdparty,insuchmannerthattheTaxAdministrationdepartment,thatoverseestheapplicationof taxes,shallapply thecriteriacontainedthroughwrittentaxconsultationtoanytaxpayer,providedtheidentitybetweenthefactsandcircumstancesofsaidtaxpayerandthosewhoareincludedintheresponse.

I.2.3.-Anotherinstrumentforinformationandassistanceismadebypriorassessmentactions.ThistypeofperformancehastwoconcretemanifestationsintheSpanishjudiciallaw:

a.Previousinformationtotheacquisitionortransferofrealestateproperty(article90LGT)and,b.Previousvaluationagreements(article91LGT).

a.Information prior to the purchase or transfer of real estatereferstoasthevalueofrealestate,whichshallbetheobjectofpurchaseortransferandhasbindingeffectswiththeAdministrationduringthenextthreemonthsfollowingthenoticebytheinterestedparty6.

b.Before made value agreementstriestoeliminatejuridicalinsecuritiesthatisproducedwhentaxlaws use concepts or certain confusing terms that canmean two different things for two differentsubjects,suchasthetaxpayerandtheAdministration.Thesehavetobewrittenandshallhavetieswitheachother, insuchmannerthatthelegislationshallnotbemodifiedorthatthecircumstancesthatestablishedthevalueshallnotbemodifiedsignificantly,thetaxAdministrationthatdictatesthetaxpayer’sdutyonamaximumtimeofthreeyears,unlessotherwiseprovidedforbytheLaw7.

I.2.4.-Regarding the Assistance to Taxpayers when filing returns, self-assessments and taxcommunications.

It isaninstrumentwhoseobjectiveistofacilitatethetaxpayertheexecutionof itsduties.ThemainfunctionsoftheTaxAgencyregardingthismatterare:

4 Written Tax consultation shall be made before the end of an established time frame to exercise their rights, declaration presentation or self-assessments or the execution of other tax laws, through a letter directed to a competent office for its response, which the rules contains. Consultation response time belongs to the tax Administration department that has been appointed to carry out this disposition, tax consultations, proposals or interpretation (General Tax Department). The competent tax Administration shall answer with a written response to those consultations that fill the established requirements, in a six-month time frame from its presentation. Lack of response within this time shall not be taken as the acceptance of that criteria expressed in the letter by the taxpayer

5 To maintain binding effects the following must be present: 1º That the circumstances are true, evidence and other data collected in the consultation’s response. 2º Legislative modification or to the jurisdiction shall not be made. This means that, as a rule, the Administration shall accommodate

its interpretative criteria when referring to consolidated jurisdiction, independent from any consultation made before hand. In any case, there shall be no binding effects for the Tax Administration’s response to inquiries that have been made and which are regarding the objective or transaction of a procedure, remedy or an existing claim.

6 Entailing effects require that a request has been filed before the deadline to present self-assessment or declaration and factual and sufficient data has been given to the Tax Administration. Lacking a response does not mean accepting the value agreement that in some cases shall be included in the initial request from the interested party.

7 The Administration shall be able to prove the identity between factual acts outlined in the proposal and those made by the taxpayer, but a different value shall not be possible in the measure the identity has been confirmed. On the other hand, lacking a response by the Administration during this time frame, implies that the Taxpayer’s proposed value has been accepted by the Administration.



a.Telephone Attention Center: Isa telephoneservice that isvital for livingcitizens thatarenotobligedtofileforanincometaxreturn.Providesinformationonhowtogetafastrefund,filingstatusandcalculateshowmuchthispersonisgoingtogetback,takescareofanydoubtsordiscrepanciesthathasbeenproducedandallowstakingotheractionswithoutphysicallygoingtotheAgency.

b.Information software to help prepare the most important tax returns:Amongthem,theonethat stands out themost for its importance is “Assistance Program for the Individual Income TaxReturn“(PADRE),themainobjectiveofthissoftware,istohelptaxpayerstofileareturnforthistax8.Nevertheless,taxpayersthatdonotownapersonalcomputeroriftheypreferred,theycanpreparetheir taxesby telephone,orgo to theTaxAgencyofficeorgo toothercollaboratingoffice tohavepreparedtheirpersonalincometaxreturnbyqualifiedpersonnelintheuseofthePADREProgram.

Otherprogramsthatareavailable to those interestedarereferred toas theannualwithholdingsummary of labor and movable capital, annual return of operations with third parties, intracommunity summarized return, VAT annual summary-return,Corporate Tax return (simplified),retirement fundsannual return, andannual summaryof incomeover rentedproperty or urbanproperty,etc.

Finally, we shall point out that in all Tax Agencies Offices and Administrations, preparing taxreturnsregardingEconomicActivities,businessownerscanuseanObjectiveEstimationsoftwareprogram,todeclareincometaxpaymentsforIndividualsandeveryquarterValueAddedtaxes.Thetotalnumberoftaxreturnsfiledin2004throughcomputerprogramswas12,336,034,whichrepresentsatleast96%ofthetotalreturnspresentedinIIT,80%inVAT,97%ofthetotalreturnsofpaymentsusingObjectiveEstimationandthe95%ofallreturnspresentedbyCorporateTax.

c. IIT Pre-made return.Isaservicestartedbyatestduringthe2002Taxcampaignandplacedintoeffectduringthe2003Taxcampaign,anditallowsthetaxpayerstopresenttheirIITstatement,makethemcomplywiththelegalestablishedconditions,andasksthattheAgencygivesthem,forjustinformationalreasons,apre-madeincometaxstatement.Oncethepre-preparedreturnhasbeenreceived,andifthetaxpayerconsidersthat,thisreflectstheirtaxconditionregardingtheirincome,canconfirmitandfileit,bywhichcasetheconfirmedpre-madestatementshallhavealltheeffectsofanIITreturn.Onthecontrary,thetaxpayerhastofillthecorrespondingstatement.

Weshallpointoutthattheconfirmationcanbedoneasfollows:

• AtanyofficewithinSpanishterritoryorinanauthorizedagency,• AutomatedTellerMachines,• ElectronicBanking,• TelephonicBankingoranyotherBankingsystemsnotpresentatanyauthorizedagency,• ThroughtheInternet.

In addition, if the statement shows a quantity that needs to be returned or a negative balance,confirmationcanalsobemadethroughthefollowing:

• -Calling telephone number 901 33 66 33, • -Sending a SMS message to numbers 50 25 or, • -AtanyOfficeorTaxAdministrationAgency.

8 This program can be obtained in CD Rom or downloaded through the Internet so that each taxpayer can prepare their own return, print it using the PDF code (portable data file) –which makes possible to access at any time through the computer and to present as any established model, file through the Internet, but having the need to obtain an electronic signature.



Thenumberofblankstatementssentin2004wasof4,292,111.

d. Expedition of Tax Certificates:Duringpreviousyears,newtreatieshavebeenmadebetweentheTaxAgencyandentitiesthatrequeststhesecertificatesfromcitizens,sotheofficesintegratedintheStateGeneralAdministrationneedtosubstitutethisserviceandprovidethecertificatesbyelectronictransmissions9.

Inthesamemanner,certificatesofcomplianceintheIITarebeingsenttocitizens,thatononehandhelpsthem,sotheycangiveittoanypublicofficethatisaskingforit,avoidingthenecessityoftheIITtoinformthemofhowmuchistheirtruecollaborationtopublicexpenses,differentiatingbetweenfundsgiventotheStateandAutonomousCommunities.

Finally,thenumberoftaxcertificatesrequested(andsent)in2004was4,804,758.

e. Services regarding customs assistance:Mostimportantforitsspecificationandtheirsuccess,andtheirmaingoalsareto:

• -Makefastercustomprocessandfavortheexecutionoftaxobligationsformpassivesubjects10,• -PresentationofIntrastadstatisticalreturnnecessarilythroughcomputerizedmeans,• -Facilitatethetaxpayer’srelationbetweentheInternetandfilingSpecialTaxesandTaxesover

MinorSalesofspecificHydrocarbons(IVMDH).f. Finally,establishingdebt payment plans constitutesanessentialelementtothetaxpayerwhen

it comes to returns, self-assessmentsand taxcommunication.Among thesebenefits themostimportantare:• Paymentplansandpartialpaymentsofdebts,forthosethatareunderavoluntarypaymentor

executiveperiod,• PaymentofdebtsforpropertythatsharesaportionwiththeSpanishHistoricalPatrimony,and,

especially,• Paymentmade fromdebts through contributing authorized entities. The importance of the

contributing authorized entities is such, that up to December 31st 2004, the number

of authorizing entities were 190 and the total of funds collected was above 173.366 millions of euros.

II. ELECTRONIC ADMINISTRATION

Newtechnologiesarerepresentinganessentialfunctionwhenitcomestothediffusionoftaxpayer’srights and duties. The importance of such function is recognized by the General Tax Law thatcontainsagenericmandatetopromoteelectronictechniquesandmeans,aswellasthenecessaryinformationandcomputerizedmeans,necessaryforthedevelopmentofthisactivityandtheactionsof

9 Royal Decree 209/2003, February 21st. 10 Among other we shall mention the following:

• Computerization of customs warehouses and others bonded warehouses, which supposes to substitute inventory accounting controls performed by the respective control customs for an online computerized management.

• Implementation of Internet as a communication system between the operator and Customs to send customs returns. • The implementation of a new inquiry and control tool in the NCTS system, called help-desk, through which any event that takes

place in all NCTS movements may be followed from its issue to its conclusion. • The development of a new computerized application to unify the registry of all operations performed in Spain, regarding the

movement of protected goods and covered by the TIR transit Agreement. • Computerization of “the goods recognition prior to dispatch” (C-5). • The establishments of the goods withdraw communication made to the e-mail, which may be address to the mobile device, which

is acquired as an option in each tax return. • The possibility of the correction of export returns through an EDI via messaging. • Contacts with Border Inspection Services has increased to substitute paper filing of certificates issued in paper by these Services

for an encrypted computerized information system which generates a complete reference number (NRC).



theAdministration’scompetencies.11(Article96LGT).Individualand/ortheactionsdevelopedbytheAdministrationthroughthesetechniqueshavethefollowingcharacteristics:

• Juridicalpositionfromoneandanotherandthevalidityoftheprocessdonotvaryinrespecttothedevelopmentthroughtraditionalmethods.12and,

• Documentssubmittedbywhatevermeans,throughelectronictransfer,informationandcomputerizedmeansbytheTaxAdministration,orthosethatthelatterprovidesascopiesfromtheoriginals,shallhavethesamevalidityandeffectivenessjustastheoriginals,provideditsauthenticity,integrityandconservationisguaranteedand,inthiscasereceivedassuchbytheinterestedparty.

Since1996,yearinwhichtheTaxAgencywebpagewasopenedtooffermainlyinformationservices,thedevelopmentofnewtechnologieshasmadepossibletheuseofextensiveservicesbythetaxpayerthroughtheInternet(www.agenciatributaria.es),themostimportantare:

• GeneralinformationservicesregardingtheTaxAgencystructureandfunctions,annualinformation,telephonenumbers,listofservicesandaddresses,differentofficee-mailaddresses,etc.

• Serviceaccesstoaspecificrule,pageformostfrequentquestionsandalsoautomaticupdateofsoftware

• Taxinformationservices,taxpayercalendar,INFORMAsoftware,taxlegislation,questionsaskedtotheGeneralTaxOffice,etc.

• Questionsregardingcustoms,foreigntradestatistics,inthematterofSpecialTaxesorcollectionofCommunityCustomstariff(TARIC),expeditingauthorities inSpecialTaxes,returnsituations,goodstobetransportedandpendingtobetransportedbytheDepartmentofCollectionsoftheTaxAgency.

• Inquiryservicesregardingtaxreturns,requestforfiscaldataandidentificationcards,andgettingtaxmodelstopreparereturns.

• DownloadservicefromtheInternetofthoseprogramsthathelpinthepreparationofreturnsandinestimatingtaxwithheldandthepre-approvalofthoseelectronicreturnsfiledthroughtheInternet.

• Services such as on-line inquiries, using fiscal data, and identification card print outs, detailinformationonthereturnandnotificationofchangeoffiscaladdress.

• Requesting and receiving specific tax certificates, census questions by intra-communities,established in different Estates throughout the European Union, questions regarding accountactivityandthetaxbalance,electronicemailregardingupdatesandnewfeaturesintheAgency’swebpage.

• Telematicfilingofthereturnis,withoutanyquestionsthemostsignificantserviceprovidedbytheInternetand it isbasedon the taxpayer’s identificationbyusinganelectronicsignature,whichguaranteesfullsecurityandconfidentialitybetweentheTaxAgencyandthetaxpayer.

• Intheyear2004,thenumberofreturnsfiledthroughInternetwasmorethan20,790,000,whichatleast12millionofthesebelongstocustomsreturns,morethan3.5milliontotheIITreturn,morethan1.7millionofelectronicreturns,morethan2.1returnsfromSmallandMid-sizeBusinessesandsome177,000CorporateTaxreturns.

• Inthesamemanner,itofferscitizens,thepossibilitytomakeapaymentofself-assessmentthroughInternet,requestmonthlypaymentsandpartialdebtpayments,presenttherefundofresourcesandothertaxrequests.Alsoitispossibletoparticipatein“online”auctionsofpropertyseizures,inquireandpaydebtsnotified,thepossibilitytorequestanappointmenttopreparepersonalizedreturnsandself-assessments(thenumberofcitizensservedbyanappointmentin2004wasapproximately3,380,000),inquiriesregardingtheverificationofthesecondtaxpaymentofIndividualsthroughInternet, granting and revoking representation to file seizure resources or to present other taxrequeststhroughInternet.

11 With the limitations, establish by the Constitution and the laws.12 Unless the observance of the specific provisions which in each case may result from the application (i.e., computerized notices)



III. SPECIFIC ATTENTION TO SPECIFIC TAXPAYERS

Amongtheframeoftaxpayerrightsanddutiesdiffusion,aseriesofactswithintheTaxAdministrationarethemostimportant,andareoutlinedinthefollowingmanner:

III.1.TaxEducation.III.2.Informationandassistancetothedisabled.

III.1. Tax Education

Actions concerning Tax Education are one of the most efficient ways to disseminate rights andobligations to taxpayers, and they arematerialized by adopting preventivemeasures that facilitatetheknowledgeof rightsandobligationsbyyoungercitizens, thispromotesvoluntarycomplianceofobligationsbythetaxpayerandallowsthecreationofafiscalawarenessinsociety.TherecentFraudPreventionPlanproposestodevelopaplanfortaxeducationthatcanreachchildrenandadolescentsandcangive themabasic idea regardingfiscal responsibility thatcanhelp themincorporate into their role of taxpayers with a clear understanding that this is logical and rationalbehaviorinademocraticsociety.Theformationofatruefiscalawarenessconsistsinassumingthataboveallconcreteoptionsandfiscalmodels,whicharechangingasitisforeseeableinanydynamicsociety,thereareaseriesofjustifiablecriteriaforjointfinancingofpublicandcommonneeds.ThedevelopmentoftheTaxEducationprogram,togetherwithitscorrespondingcontext,isspecificallydesignedforchildrenandadolescentsthatresidingthroughoutthenationalterritory,andthepurposeistosecuretheirperceptionfromanearlyage,onvoluntaryexecutionandtaxpayerobligationsasacitizenvalue.Itincludesagroupofactions,adaptedtothecyclesthatcomprisetheSpanisheducationsystem,amongwhichwecanhighlight:

-HoldingopendooreventsattheofficesoftheTaxAgency,-Teachinglecturesatschools,and,-SoonanInternetportalontaxeducationwillbelaunched.

III.2. Information and Assistance to the Disabled Theyear2003wasdeclaredtheEuropeanYearofPeoplewithDisabilities13,theTaxAgencydecidedtodevelopanassistanceplan forpeoplewithdisabilities, their relativesand representativeswhichpurposeistoprovideupdatedinformationontheirrightsandprovidesupportandadviceincomplyingwiththeirtaxobligations,sothat inthismannertheyfeelthattheAdministrationiscomingclosetothem14.

In this scopeoneof themost importantmilestones that has takenplacehasbeen the signingonMarch 25, 2004, of the Collaboration Agreement between the Tax Agency and the Committee ofRepresentatives of People with Disabilities of Spain (CERMI, in Spanish) and Foundation ONCE,whichconstitutesafundamentaltoolontheissueofcollaborationwiththerepresentativesofpeoplewithdisabilitiesandthispermitsconsensusfortheactionsthattheTaxAgencyisgoingtoperformwithinthescopeofinterestofthecollective.

ThefollowingactionshavebeendevelopedbytheTaxAgencytoassistpeoplewithdisabilities:

13 According to the Decision of the Council of the European Union, adopted on December 3rd 2001. 14 In this respect, we can mention that, whilst in Spain Disabled People are 9% of the population, which supposes 3.528.222 people,

the Tax Administration Spanish Agency carry out transactions with 2.290.377 Disabled People, which supposes 5,6% of the total population in Spain, where 79% of the same are direct taxpayers and the remaining 21% spouses, ascendants and descendants of the titular.



• Thepromotionofinformationtransferwithagenciesresponsibleforcertifications(AutonomousCommunitiesandIMSERSO15)associatedtothisorganization,whichpreventsManagementdepartmentsoftheTaxAgencyfromtakingcontrolactions.

• Information and assistance measures in Income Tax Campaigns, among which the PriorAppointmentfortheHearingImpairedService,withtheassistanceofsignlanguageinterpretersstandsout.

• Visits to the collective domiciles at the main offices of the Associations of people withdisabilities,hospitalsandmanagedcareseniorresidences,toassistincompletingandfilingIncomeTaxReturns.

• InformationServiceswhichincludeadvertising,ingeneralcommunicationmeansaswellasinspecificmedia,thepublicationofInformationBrochures(whicharealsoeditedinBraille)andthepresentationofInformationallecturesattheDelegationsoftheTaxAgencyandatlocationslentbytheAssociationsandConfederationsofpersonswithdisabilitiesthatcollaboratewiththeTaxAgency.

• Otheractionssuchasopendooreventsforhearingimpairedchildren,informationmeetingswith Associations of people with disabilities, personnel from the Agency working as signlanguageinterpreters,obtainingacertificateforthecomputerfilingofreturns,parkingspacesplacedatthedispositionofdisabledpeople.

• Regarding new technologies, the Tax Agency has proposed to face the elimination thetechnological barriers that exist in its web page, having developed determinate actions,especiallyintheIncomeTaxCampaign,whichrefertoinformationontaxbenefitsapplicabletodisabledpeopleand their familymembers, themanner inwhich theaccreditationof theunderprivileged person is performed, the Agency’s telephone help lines and the taxpayercalendar16.

IV. DEPARTMENTS AND PROCEDURES TO DEAL WITH TAXPAYERS’ CLAIMS

Themereidentificationoftherightsanddutiesbytaxpayerswouldbetonoavailifproceduresanddepartmentsarenotdefinedandestablishedtoattendtheirclaims.

The newGeneral Tax Law hasmeant an important approach of the tax regulation to the generalnormsofAdministrativeLaw17,withtheconsequentincreaseoflegalsecurityintheregulationoftaxprocedures.

Within thesedepartmentsandproceduresplacedat theserviceof taxpayers toattendtheirclaimstherearethefollowing:

1. Taxprocedures.2. Resourcesandclaimsregardingadministrativeactsandactions.3. ComplaintsandSuggestionsbeforetheTaxpayerAdvocateCouncil.4. ComplaintsfiledbeforetheOmbudsman.

IV.1. Tax Procedures

The existence of pre-established tax procedures, with a source system perfectly outlined in theGeneralTaxLawandasystematicandoutlineof rightsandobligations legallygathered, this isanessentialguaranteewhichallowsthetaxpayertoidentifyillegaldemandsoftheTaxAdministrationanditsofficialswithintherangeofthetaxproceduresthataffectsthetaxpayer.

15 Institute of Migrations and Social Services. 16 To facilitate access to this information, search links have been included in magazines and associations of the collective.

17 L30/1992, of 26 November, of the Juridical Regime of the Public Administrations and the common Administrative Procedure.



Amongthecommonstandardsontaxactionsandprocedures,itisrelevanttomention:

1.1. Facilitateexerciseof rightsandobligations: Atall timesduring thedevelopmentof taxactionsandprocedures, theAdministrationmust facilitate for taxpayers theexerciseoftheirrightsandcompliancewiththeirobligations(article99LGT).

Specifically, in tax control procedures (limited verification actions and inspection

procedure), the beginning of the procedure must be notified to taxpayers through acommunication,wherethenatureandtherangeofsaidcontrolactionswillbeexpressedaswellasinformationonthetaxpayer’srightsandobligationsduringthecourseofsuchactions(articles137.2and147.2LGT).

1.2. Hearing proceedings: The existence of a hearing proceeding prior to the proposedresolutionisprovidedfor,thesameshallnotbelessthantendaysormorethanfifteenanditmayonlybeomittedwhenrecordsoftheproceedingsaresignedwithanagreementorwhenintheregulationstandardsoftheproceduresanallegationprocedureaftersaidproposalisforeseen(article99LGT).

1.3. Express resolution: The Tax Administration is obliged to expressively solve all issuesthatarestipulated in taxationapplicationprocedures,aswellasnotifyingsaidexpressresolution(article103LGT),withtheexceptionsprovidedforintheLaw18.Withoutdetrimenttotheabove,theLawexpressivelystipulatesthattheeffectsofthelackofanexpressresolutionintaxproceduresshallbeginexofficioattheparty’srequest.

1.4. Motivationoftheacts:TheLawestablishestheobligationofthemotivationoftheacts,withsuccinctreferencetothefactsandlegalbasisoftheLaw,inthecasesofliquidationacts,valueverification,thosethatimposeanobligation,thosethatdenyafiscalbenefitorthesuspensionoftheexecutionoftaxenforcementactions,aswellasmanyothersthatareprovidedforbytheregulatoryschemeinforce(article103LGT).

1.5. Term for the resolution: A maximum term for the service of the resolution of the taxprocedures,whichshallbeestablishedbytherulingregulatoryschemeofthecorrespondingprocedureshallbeallowed,thistermmaynotexceedsixmonths,unlessprovidedforbyanormthathastherankoflaworthatitisprovedforintheEuropeanUnionregulatoryschemes19.Whenthenormsregulatingtheproceduresdonotestablishamaximumterm,thiswillbeofsixmonth(article104LGT).

1.6. Serviceofprocess regime: Stipulate in the administrative norms with determinate specialties provided for in the General Tax Law (article 109 LGT).

1.7. EntryintoaDomicile: To enter or perform a search of a home of a taxpayer, which is protected by Constitution, the Tax Administration must obtain the consent of the former or timely obtain a judicial authorization (article 113 LGT).

18 The obligation to expressively resolve in procedures pertaining to the exercise of rights that must only be the purpose of communication by the taxpayer and in those where expiration occurs, the sudden loss of the purpose of the procedure, the waiver or the voluntary dismissal of the interested parties. Notwithstanding, when the interested party expressively requests the Tax Administration to declare that one of the circumstances mentioned has taken place, the latter will be obliged to answer its petition.

19 The actions of the examination procedure must conclude in a twelve-month term as from the date of the notice of the beginning thereof to the taxpayer. It shall be understood that actions end on the date on which the administrative act resulting from the same is notified or understood that is notified. Notwithstanding, this term may be extended, with the scope and requirements that are determined by the regulations, for another term that may not exceed twelve months, when in the actions some of the following circumstances takes place:

a) When they are especially complex. b) When during the development thereof, it is discovered that the taxpayer has concealed from the Tax Administration any business or

professional activity that it performs. Agreements to extend the term that has been legally established will be, in any event, motivated, with reference to the facts and legal

basis of the Law.



IV.2. Remedies and claims regarding administrative acts and actions

TheSpanish legal systemgrants taxpayers, as a legal defensemeans to attempt to enforce theirrights,thepossibilityoffilingadministrativeactionremediesorclaimswhentheyareindisagreementwithanyactor resolutiondecreed inanadministrativeprocedureof taxnature.Furthermore,oncethe administrative actions have been used, taxpayersmay have the possibility of resorting to thecontentious-administrativejurisdiction.

Administrativeactionremediesandclaimsmaybesystematizedasfollows:

IV.2.1. Remedyorcomplaintordinaryproceedings,and,IV.2.2. Specialreviewprocedures.IV.2.1. Remedyorcomplaintordinaryproceedingisthenormalcoursetoreviewadministrativeacts

at the request of the interested party and includes the appeal for reversal and economic-administrativeclaims.

a.Appeal for Reversal(articles222andfollowingLGT).This isanordinaryadministrativeprocedure,discretionary innature,and isprior to theeconomic-administrativeclaim,whichallowsthereviewofthelegalityoftheactsdecreedbytheTaxAdministration20bythesameauthoritythatdecreedtheact.b.Economic-administrative claims(articles226andfollowingLGT)21:

Theknowledgeofeconomic-administrativeclaimsexclusivelypertainstotheeconomic-administrativeauthorities. These authorities are formed by the Ministry of Economy and Treasury, through theSecretariatofStateofTreasuryandBudget–andunrelatedtotheTaxAgency-,theyactfunctionallyindependentinexercisingtheircompetenciesandarefollowing:

1. TheCentralEconomic-AdministrativeCourt,2. TheRegionalandLocalEconomic-AdministrativeCourts,and,3. TheSpecialDivisionoftheCourtfortheUnificationoftheDoctrine.

IV.2.2. Special review procedures. These are exceptional courses for cases appraised, they aresubmittedtospecificlimitationsandgenerallybeginexofficio,eventhough,fromtimetotime,theymaybeginattherequestoftheparty.TheGeneralTaxLawdistinguishesthefollowingclassesofspecialreviewprocedures(article216LGT):

a.Reviewofnullactionsasamatteroflawb.Declarationofthedetrimentalnatureofannullableactionsc.Correctionofmaterialmistakes,defactoorarithmeticald.Returnofillegalincomee.Annulment

a.Review of null actions as a matter of law(article217LGT):

20 Acts decreed by the Tax Administration that may be object of the appeal for reversal are those susceptible of economic or administrative claim.

21 This constitutes an ordinary procedure of challenging with administration actions the following acts decreed by the Tax Administration:

a) Acts that provisionally or definitely recognize or deny a right or declare an obligation or a duty, b) Proceedings that decide, directly or indirectly, in the substance of the issue or which end the procedure, c) Determinate acts on the issue of the enforcement of taxes, and, d) Acts that impose sanctions.



Thisspecialprocedure,thatmaybefiledattheinitiativeoftheAdministrationortheinterestedparty,pursuestheannulmentasamatteroflawoftheactsandresolutions(oftheeconomic–administrativeauthorities),thathaveendedadministrativeactionsorthathavenotbeenappealedwithintheterm,inthecasesprovidedforbytheLaw22.

b.Declaration of the detrimental nature of annullable actions23(article218LGT):

TheTaxAdministrationmayproceedtodeclaredetrimentalforpublicinterestactsandresolutionsthatarefavorabletotheinterestedpartythatincurinillegalities,whicharenotconsideredannullableasamatteroflawand,later,challengethesebeforethejurisdictionforsuitsunderadministrativelaw.

c.Correction of material mistakes, de facto or arithmetical(article220LGT):

Thisprocedureisappliedbytheauthorityorbodythathaddecreedtheactortheresolutionoftheclaimto rectifymaterialmistakes,de factororarithmetical,exofficioorat thepetitionof theparty,providedthetimelimitforlegalactionhasnotelapsed.Itwillbeparticularlyusefultorectifytheactsand resolutions fromeconomic-administrative claimswhereade factomistakehasbeen incurred,whichresultsfromthedocumentsincorporatedintotherecordsofthecase.

d.Return of illegal income(article221LGT):

Thisspecialprocedurethatmaybeinitiatedexofficioorattherequestoftheparty,allowstherecognitionoftherighttorefundillegalincomeintheeventthat:

• Therehasbeenduplicityinthepaymentoftaxdebtsorsanctions,• Theamountpaidhasbeenhigherthantheamounttoinput,• Amountscorrespondingtodebtsorsanctionshavebeeninputtedafter theprescriptionterm

haselapsedor,• Itisprovidedforinthetaxstandards.

e. Annulment of tax imposition actions and the enforcement of sanctions decreed by the Administration for the benefit of the interested parties(article219LGT):

Oneof thegreatnoveltiesof thenewLGT regarding thepositive juridical regulationcontain in thealready annulled Law 230/1963, General Tax Law, which did not rule in this regard24, this is theregulationofthereversalbetweenthepossiblespecialreviewprocedures.

Inthisregard,theLawexpressivelystipulates“theTaxAdministrationmayrevokeitsactsforthebenefitoftheinterestedparties”(article219).Saidprovisionsupposesthat:22 Cases in which the rule of the law is applicable:

• Violation of constitutional rights • Manifest incompetent actions by authorities • Impossible content acts • Acts that constitute a penal violation or that are decreed as a consequence thereof • Total and absolute omission of the procedure or omit standards that contains essential rules for the formation of the will in the

collegiate authorities • Acts contrary to the legal system • Any other expressively provided for in a legally ranked provision.

23 The ex officio review of the annullable acts has experienced an important reform after the new LGT, which has meant the homogenization with the general system of the ex officio review, suppressing the possibility for the Administration of annulling on its own for legality defects actions favorable to the interested party unlike the annulment as a matter of law.

24 Nevertheless, a sector of the doctrine believes that such novelty only pertains to the understanding that the express regulation of the annulment of the encumbrance actions by the Administration itself was not precise, since you could resort to it without observing a special proceeding for the guarantee of the interested party, since the ex officio review guarantees and limitations only made pronouncements on the review of adjudicative decrees.



• TheannulmentpowerisofdiscretionarynaturefortheTaxAdministration,• Theannulmentshallonlybeacceptableinregardstoencumbranceacts,• Thepossibility ofmaking this procedure simultaneouswith the economic-administrative action

doesnotseemtosetforthproblems25.

TheannulmentisonlypossiblebythefollowingreasonsstipulatedintheLaw:

• Whenconsideredthatitmanifestlyviolatesthelaw,• When circumstances suddenly occur, which affect a particular juridical situation evidence the

illegalityoftheactdecreeor,• Whenduringthetransactionoftheprocedurethelackofproperdefenseoftheinterestedparties

hastakenplace26.

Similarly,annulmentpowersaresubmittedtoaseriesoflimitations(articles66,213.3y219.1y2LGT):• Acommonlimittoallreviewprocedures,whichisthatformedbyres judicata,whichprohibitsthe

reviewofenforcementacts, impositionofsanctionsand resolutionsofeconomic-administrativeclaimswhentheyhavebeenconfirmedbyafinalexecutablejudgment.

• ThereferencethattheLawmakestothe“TaxAdministration”determinesthatitisimpossibletorevokeeconomic-administrativeresolutionsaswellastheactsthathavebeenthepurposethereof.

• Atemporarylimit,suchasthetaxprescription27.• Theannulmentcannotconstitute,inanyevent,adispensationorexemptionnotallowedbythetax

laws,anditcannotbecontrarytotheprincipleofequality,topublicinterestorthelegalsystem.

Fromtheproceduralpointofview,theannulmenthasthefollowingcharacteristics:• Thebeginningwillalwaysbeexofficio,withoutdetrimentthat,assetforthintheGeneralRegulation

draft bill for Review issues28, interested parties may promote its beginning by the competentAdministrationbymeansofawritthattheywilladdresstotheauthoritythatdecreedtheact29.Inanyevent,theexofficioinitiationagreementwillbenotifiedtotheinterestedparty.

• Allinterestedpartiesthatmayresulttobeaffectedbytheacttobeannulledshallbegivenhearingcourtproceedings30.

• The report from the authoritywith legal advisory functions shall be included in the annulmentrecordsofthecase,thisreportshallbepreceptiveandisnotrequiredtobefavorable31.

• Themaximum term to notify the resolution of the procedure shall be of six months, as fromthemoment inwhich the interestedparty isnotifiedof theexofficio initiationagreementof the

25 To such effects, article 238 of the LGT stipulates the extra-procedural satisfaction of the cause of action as a means for the termination of the economic-administrative procedure, which may be done through the mentioned annulment in the administrative action.

26 The lack of defense takes place as a result of: the omission of the mandatory hearing proceedings to the interested party, the unjustified denial of the relevant means of evidence, the absence of motivation of the actions and resolutions or the defects of the notices which have prevented the knowledge of the action or the relevant resources, though in this case it may also be understood that the remedy action may continue to be open.

27 The elapse of the time of the prescription constitutes a moment when the principle of juridical security prevails on the subject of legality. There is a consideration that some annulment causes may surface specifically in the case of nullity causes as a matter of law, in which event the review is indispensable, it may not be exercised through a repeal procedure, but through a procedural course of a decree of nullity as a matter of law and taking into consideration its own limits.

28 The State Council is currently reporting to it.29 In this case, it seems that the Administration will be exclusively obliged, as it is, continues to be provided for in the Regulatory draft bill,

to acknowledge receipt of the petition.30 As provided for in the General Review Regulation draft bill, it is advisable for the hearing proceedings to be held before the request of

the juridical report.31 It is not a requirement for the report to be from the State Council or an equal consulting body of the Autonomous Community, if any,

therefore the corresponding report from the corresponding juridical service, which has been instructed to legally counsel the competent body to solve the annulment, shall be sufficient.



procedure.Once this termhaselapsedwithouthavingexpressivelynotified the resolution,willresultintheexpirationoftheprocedure.

• -Resolutionsthataredecreedinthisprocedurewillendadministrativeactions.

IV.3. Complaints and Suggestions Filed Before the Taxpayer Advocate Council

ThenewLGThassupposedanelevationofrankofthenormativebaseoftheCouncilfromtheregulatorylevelofRoyalDecree2458/1996,ofDecember2,whichcreateditbyindicatingitsfunctions,uptotheleveloftheLaw,maximumexpressionofthewillofthepeople.

TheTaxpayerAdvocateCouncilisformedasacollegiateagency,intheMinistryofTreasurythroughtheSecretariatofStateofTreasuryandBudget,whichhasbeenentrustedwithconsultingaswellas advising functions in solving complaints and attending suggestions,which are filed by citizens.Specifically,asprovidedforinparagraph2ofArticle34oftheGeneralTaxLaw,itischargeof:

- Overseeingtheeffectivenessoftaxpayerrights,- Attendingcomplaintsthattakeplaceasaresultoftheenforcementofthetaxsystem,whichareperformedbytheStatedepartments,and,

- Making the relevant proposals and suggestions, in themanner andwith theeffects that aredeterminedbyregulation.

Theproceduretoformulate,transactandrespondtocomplaints,claimsandsuggestions,asprovidedfor in theResolutionofFebruary14,1997,of theSecretariatofStateofTreasury,establishes thatallcomplaintsandsuggestionsfiledshallbeansweredbytheCouncil,andoncethereplyhasbeenreceived,iftheinterestedpartydoesnotagreewiththereplyreceived,itmayfileanonconformitywritduringthefollowingfifteendays.Inanyevent,theinterestedpartymayrequest,atanytime,informationonthestatusoftheproceedingsofthefiletotheunitthatreceivesthecompliantorsuggestionfiled.

Itisalsoimportanttomentionthattheformulationofacomplaintdoesnotpreventthefilingofremediesorclaimsprovidedforinthelawsagainstadministrativeacts.

OntheissueofComplaintsandSuggestionstotheTaxpayerAdvocate,byactivityareas,thereductionexperiencedin2004onthenumberofcomplaintsandsuggestionspresentedbeforethisbodyandreferredtotheTaxAgency.Consequently,whilein2003itsnumberincreasedto6,031,in2004thefiguredeclinedto5,502.

IV.4. Complaints Filed Before the Ombudsman

TheOmbudsman isafigure taken fromtheNordicexperienceand introduced in theSpanish legalsystembytheSpanishConstitutionof1978(Article54),whereitisestablishedasahighcommissioneroftheGeneralCourts,appointedbytheseforthedefenseofcitizenfreedomsandfundamentalrights,towhicheffectitmaysupervisetheactivityoftheAdministration,byreportingtotheGeneralCourts.For the performance of this protecting activity, the Ombudsman has competencies to begin andprosecute,exofficeaswellasattherequestoftheparty,anyinvestigationleadingtoclarifytheactsandresolutionsofthePublicAdministrationanditsagents,inregardstocitizens.Totheseeffects,anyperson,anindividualorbodycorporate,allegingalegitimateinterest,mayfileitscomplaintsbeforetheOmbudsmanwhooncetheproceedingshasbeenadmitted,willprovidetimelyinvestigationtoclarifythesuppositionsthereof,andallpublicpowersshallbeobligedtoassistallinvestigationsandinquires(Articles9,10,18and19theOrganicLaw3/1981,ofApril6,oftheOmbudsman).



TheTaxAgency, as aPublicAdministration, is subject to the exercise by theOmbudsman of thecompetenciesofsupervisionthatithasentrustedanditmustfurnishallinformationrequestedbyittoperforminquiriesthatwillleadtoclarifytheactsandresolutionsoftheAgencyanditsagents,basedonthepossibleviolationofanyfundamentalrightsetforthinTitleOneoftheConstitutionalText.

Tothiseffect,theGeneralDirectorateoftheAgencyapprovedin2002aninstruction32whichestablishedthegeneralactionguidelinesofthedepartmentsoftheTaxAgencythatresultfromtheexercisebytheOmbudsmanofitssupervisionfunctions,whichundoubtedlyhasgivensaidactionsgreaterspeedandefficacy.ThenumberofcomplaintsfiledattheOmbudsmanthathaveenteredintotheTaxAgencyin2003wasof118,whilein2004itsnumberhasdeclinedto109.V. TRANSPARENCY AND OTHER CITIZEN PARTICIPATION MEANS.

V.1.Transparency.V.2.Participationofcitizensinsurveys,studiesandanalysis.

V.1. Transparency

ThepromotionoftransparencyasoneoftheprinciplesthatmustruletheactivityoftheTaxAgency,isakeypiecetoallowtaxpayers,andcitizensingeneraltoparticipateinbuildingamodern,effectiveandefficientTaxAdministration,wheretheknowledgebytaxpayersoftheirrightsanddutiesandthattheclaims,complaintsandsuggestionsthattheyfileareaddressed.

This transparency, which covers, not only the activity but the results of the Agency as well, bysafeguardingatalltimes,thedutytoreserveandkeepconfidentialtheinformationpertainingtocitizens,thismusttakeplaceinsidetheorganizationaswelltosociety.Inside,sothatthedifferentdepartmentsandpersonnelthatformpartofitareknowledgeableofitsgoalsandtargetsandtheresultsobtained,andtosocietysothatcitizens,institutions,etc.canbeknowledgeableaboutandevaluatethelevelofefficacyandefficiencyoftheactivitydeveloped.

Thesearchforthemaximumtransparencyhasbeenoneoftheprinciplesthat,recently,haveguidedtheelaborationofthePreventionPlanagainstTaxFraud,wheretwophasesmaybedistinguished:

1.Aninitial phase of elaboration,where:

• The weak points were identified as well as strategic, organizational or coordination issues,susceptibleofbeingimprovedinthecontrolmodeloftheTaxAgency,

• Responsibleexpertswereappointedforitsstudyandtheelaborationofareport-proposedwhichmust contained, in any case, a situation diagnose, improvement proposals and a timetable todevelopmeasures,

• Thesereports–proposalsweretransferredtotheDepartments,wheretheywereinformedto,andlaterbeapprovedbytheDirectorateCommitteeoftheAgency,and,

• AdraftofthePreventionPlanwasdeveloped.

2. Asecondphase,wherethedraftofthePreventionPlanwassubmittedtoapublic report,whichhasallowedtheenrichmentofitscontentsanddirectittothedemandsofsocietyontheissueofpreventingtaxfraud.Over500individualsuggestionsand21reportsfromprofessionalassociations,unions,professionalassociations,etc.havebeenreceived,whichhavebeenthepurposeoftheanalysisandstudyinsidetheAgencypriortothedefiniteapprovalofthePreventionPlanagainstTaxFraud.

32 Instruction 5/2002, of March 27, of the Directorate General of the State Agency of the Tax Administration, on actions of the departments of the Agency on the occasion of the exercise by the Ombudsman of its supervision functions.



Finally,andprobingfurtherintothesearchforgreatertransparency,the“AgreementoftheDelegatedGovernmentCouncil forEconomicAffairsonImprovements inTransparencywithin thecompassofEconomicandStatisticalInformationfurnishedbytheGovernment”hashighlightedtheimportanceofstatisticalandeconomicinformationtoknowtheeconomicandsocialrealityofthecountryandhasmentionedthattheState,incollaborationwiththeAutonomousCommunitiesandLocalentitiesmustoverseethatthisinformationbesuppliedontimeandadequately,withoutfurtherrestrictionthanthatimposedbythelegalsystemtothedisseminationofinformationingeneralandstatisticsinparticular,withthemaximumpossiblequalityandmakingsurethatitsaccessisuniversal.

This principle of transparency affects not only the amount of economic and statistical informationsupplied,butalsomainly,thequalitythereof.Saidgroupofinformationmustbepublishedperiodicallyandinaforeseeablemanner,bycomplyingwithsomecalendarthatthecitizenknows,sothathecanadaptinthesamehisrhythmofknowledgeonthepublicpowers.Furthermoreitmustbepublishedinamannerthatisusefultocitizens,thatis,withsufficientseparationtogiveanexactideaoftheoperationof thepublicpowersandontheassistancethat isaccessible,adequatetomoderntechniquesandwhichallowsitsstudyandanalysis.

TheMinistryofEconomyandTreasury,aswellastherestoftheMinistryformedbytheDelegatedGovernmentCouncilforEconomicAffairs,hasassumedthecommitmenttocontinuouslyupdateandrevisethisagreementtoadaptittothenewneedsandnewinformationrequirements,incompliancewiththegeneralprinciplesincorporatedtherein.

V.2. Participation of citizens in surveys, studies and analysis

Anothermeansofferedtocitizenstocollaborateinimprovingservices,programsanddocumentsoftheTaxAgencyisthepossibilityofmanifestingitsopinioninsurveys,studiesandanalysisthatareperformed,bytheAgency,orbyotherpublicbodies33,andwhichallowtheTaxAgencytoimprovethequalityoftheservicesthatitprovidestocitizensandcontinueadvancinginthemodernizationprocessoftheorganization.

TomeasurethesociologicalimpactoftheservicesofferedbytheTaxAgency,theactionstakentofightfraud,threemaininstrumentsareused,andthesamehavebeendevelopedbasedonpersonalizedsurveystotaxpayers:.

a)TheFiscalBarometerpreparedannuallybytheTaxStudiesInstituteandwhichmainobjectiveistomeasuretheevolutionoftheopinionandthefiscalattitudesofSpaniards.

b) The public opinion and fiscal policy surveywhich is applied every year by the SociologicalInvestigationsCenter.

c)ThestudyonpositioningandimageoftheTaxAgencycarriedoutbytheorganization,performedeverytwoorthreeyears.

Furthermore,theTaxAgencycarriesoutsurveysonspecificissuesandservices,suchasthesurveyonservicesrenderedduringIncomeCampaignsorservicesofferedthroughInternet.

VI. CONCLUSIONS ThedisseminationoftaxpayerrightsanddutiesandtheexistenceofdepartmentsandprocedurestoattendtheircomplaintsconstitutetwoessentialpillarstocontinueadvancingintheimplementationofamodernTaxAdministration,whichefficientlyandeffectivelyprovidesservicestaxpayers.

33 Among others, the Sociological Research Center (C.I.S., in Spanish) or the Tax Studies Institute.



Ontheselinesofgradualadvance,whichinnoeventmustneglectactionsinfavoroftheleastfavoredgroupsofsociety,theuseandapplicationoftechniquesandelectronicandcomputerizedmeansbytheTaxAdministration,forthedevelopmentoftheiractivitiesandrelationswithtaxpayers,standsout.Inthisregard,ElectronicAdministrationisnotonlyareality,butalsothekeytoprogressontheissueof thedisseminationof taxpayers’ rights andduties andan interesting road to cover in regards tocomplaintsandclaimsfiledbytaxpayers.

The Tax Agency will continue with its efforts to consolidate its web page by implementing newcomputerizedservices,improvingtheVirtualOfficeoftheTaxAgency–infunctionoftheuserprofile–andenablingthetransactionofanyprocedure.Thefollowingareamongtheinitiativesforeseen:

• Establishingthedomicileofself-assessmentwhentheyarefiledthroughInternet.• The implementationof theapplicationof thecomputerizedRegistrywhichallowsreceivingany

documentthroughInternetandwhichenablespaperdocumentscanning,tonotusepapersupports.• TheestablishmentofthemandatoryfilingofdeterminateinformationreturnsthroughInternet.• Thepromotionofthefilingthroughcomputermeansofallcustomsdispatchdocumentsaswell

as the implementationofnewcomputerapplication tomanage thedifferentcustomseconomicregimes.

Finally,andincorporatedintotheframeworkofthe“AgreementoftheDelegatedGovernmentCouncilforEconomicAffairsonImprovementsinTransparencywithinthecompassofEconomicandStatisticalInformationfurnishedbytheGovernment,”theTaxAgencywillcontinuepromotingtransparencyastherulingprincipleofthisactions,inthebeliefthatthisisthequalifiedmeanstoallowcitizensbecomeapartinbuildingamodernandefficientTaxAdministration,whichguaranteestaxpayerstheknowledgeoftheirrightsandduties,atthesametimethatitaddressestheircomplaints,suggestionsorclaims.



Tax Education

1.Context.

2.Approachandscopes.

3.Reasonsforcompliance.

4.Whypromoteataxculture?

5.Law,moralityandculture.

6.Perceptionsandattitudes.

7.Adoptionofstrategies.

8.AbouttheexperienceofGuatemala.

9.Conclusions.

Strategies to Develop a Tax Culture

Carolina RocaGuatemala

1. CONTEXT.

ThereisanincreasinginterestintheTaxAdministrationsoverthedevelopmentofthetaxculture,thatis,overtheadoptionofstrategiesthatenabletocreateawarenessintheircountriesontherelevanceofmeetingobligationsasregardsinternalandcustomsrevenue,butfromaneducationalapproachthatisnotexclusivelycenteredonthetaxpayingpopulation,butratheronnon-taxpayers,fromchildrentoyouthstoadultsexcludedfromtheeffectivetaxpayers’base,whetherbecausetheyhavenodirectlegaltaxobligationsorbecausetheyconducttheiractivitiesintheinformalmarket.

Ifweconceivethecultureasasetofknowledge,lifestylesandhabitsofagivensociety,orelse,asthesetofexpressionsofthetraditionalformoflifeofapeople,1wewouldunderstandbytaxculturethesetofinformationandthedegreeoftaxknowledgeinagivencountry,butmoreover,thesetofperceptions,criteria,habits,andattitudesofsocietywithregardstotaxation.

Thus,inthecaseofthemajorityofLatinAmericancountries–Guatemalaamongthem-wecouldassertthatthesocialbehaviorprevailinghasbeenagainstthepaymentoftaxes,whichisevidencedinrejection,reluctanceandevasion,thatistosay,differentformsofnoncompliance.

Frequently,suchbehaviorsseektojustifythemselvesbydisqualifyingtheperformanceofthepublicadministration,whetheronthebasisofcorruption,inefficiencyorlackoftransparencyinthemanagementofresources,orideologicalargumentsontheeconomy,societyandtheroleoftheState.

Ingeneralterms,suchisthecontextinwhichtheTaxAdministrationsofamajorityofLatinAmericancountrieshavetoundertaketheirtaxeducationfunctions.Neverthelessandfromapositivestandpoint,wefindfertilegroundtosowandreaptheethicalandcitizencoexistencevaluesthatprovidethegroundworkandsociallegitimacytotaxationandcompliancewithtaxobligationsasacountry’sneedinorderfortheStatetopromoteeconomic,socialandpoliticaldevelopment,aspartofitsmission.

Thisoutlookenablestoviewthebroadnessofthesocialandculturalsphereopentotheinitiativestopromotethetaxcultureandsetsforth,fromitsorigin,theneedtoestablishpriorities,selecttargetgroups,definegoalsandapproachmodesconsistentwiththeTaxAdministration’sinstitutionalstrategyandtheavailableresourcestosuchend.

Thus,itreferstotheadoptionofastrategythatmaynotbepartialortemporal,butsubstantial,permanentandincorporatedintheinherentformsofbeing anddoing intheinstitution,thatistosay,integratedtothedailyactivitiesofitsbasicfunctions,butwithalong-termvisionthatshallbeappliedwithinaswellasoutsidetheTaxAdministration(TA).

Thecoverageandscopeofthestrategymaybeasbroadornarrowastheinstitutiondecides.Inanycase,itrequiresdepthofactions,nomatterhowlimited,sincethechangesinstructuresandbehaviorsarenotproducedovernight:theyentaildeeptransformationsintheideasofindividualsandgroups,whichleadsthemtoactdifferently,orasinthecaseofchildrenandyouths,assumeamatureandresponsiblecivicidentity,fullyawareoftheirrightsandobligationsinthesocietyweretheylive.

2. APPROACH AND SCOPES.

Howcanthetaxculturebepromotedinacountrythatlacksit?Whatarethestepstofollow?Whoshallassumeresponsibility?Whatactionsshouldbeundertakentochangethevaluesandattitudesthathaveopposedtaxationinthecourseofhistory?Howmayrejectionandresistancebeovercome?

1 Dictionary of the Royal Academy of Spanish, Twenty-second Edition, 2001.


63TAXEDUCATION Carolina Roca

Answeringsuchquestionsisnoeasytask,butitisworththeeffortofsheddinglightonsuchtopicbasedonthespecificexperienceinthefieldofdevelopmentofthetaxcultureinacountrythatfeaturesoneofthelowesttaxburdensinLatinAmericaandwhosesocialindicatorsarealsofeaturedamongthelessfavorableinthecontinent:Guatemala.Weshalladdressitattheendofthisdocument.

Inordertostrengthenthetaxculture(understoodasthesetofvalues,beliefsandattitudessharedbyasocietyregardingtaxationandtaxlaws),itisnecessaryforindividualstobeinformedanddulyawareoftheissue,butaboveall,thattheyunderstandtherelevanceoftheirtaxresponsibilities.Sincethedevelopmentofthetaxculturegoesbeyondthemeresphereofthetaxpayerpopulationforitsessentialrelationtothepromotionofresponsiblecitizensthatexercisetheirrightsandmeettheirobligations,tworeciprocallylegitimatingdimensions.2

Thus,thedevelopmentofthetaxcultureshallbedeemedasystematicandpermanenteffortbasedonprinciples,focusedonthepromotionofcivicvaluesand,therefore,aimedatcurrenttaxpayersaswellasthecitizensofthefuture–childrenandyouths-,whosecultureandvisionoftheworldareunderdevelopment,andmakes themmoresusceptibleof internalizingandadopting thevalues thatshalldeterminetheirsocialbehavior inthefuture.AsassertedbyEurosocial,onlythefree, informedandself-governedcitizens,awareoftheirrightsandobligations,shallbehonesttaxpayers.3

OneofthemainconclusionsoftheInternationalCivic-TaxEducationSeminarheldinBuenosAiresinOctober2007isthatallthecountriesrepresentedthereinagreedonhighlightingtherelevanceofTaxEducationasthebasistoconstituteademocraticcitizenry,assertingthat itconstituteseducation invaluestoconformanewtaxculture.4

Civicvaluesofrespect,integrity,cooperationandsolidarity,amongothers,arisefromsocialprocessesaswellasindividualacceptanceinwhich,bydifferentmeans,citizensbecomeconvincedthatitismoreusefulandefficienttoadoptthemintheirbehavior,tothedetrimentofothersthatfosterdisrespect,transgression,dishonestyandlackofsolidarity.

Therefore,asdefinedbytheSpanishIEF,taxeducationshallbecomeatopicto:i)identifythedifferentpublicassetsandservices;ii)learntheireconomicvalueandsocialrelevance;iii)acknowledgetheirsourceoffinancing,especiallytaxsources;iv)establishtherightsanddutiesthatarisefromthepublicsupplyofgoodsandservices;v)internalizetheattitudesofrespectforwhatispublicand,therefore,financedwitheveryone’seffortandemployedforthecommongood;vi)internalizethetaxresponsibilityasoneoftheunderlyingvaluesofsocialcoexistenceinademocraticculture,identifyingcompliancewithtaxobligationsasacivicduty;andvii)understandthattaxation,withitstwoaspects-revenueandgovernmentexpenditure-,isoneoftheareasinwhichvaluessuchasequity,justiceandsolidarityinademocraticsocietyarematerialized.

Thedevelopmentofagenuinetaxawareness–andfiscalingeneral-consistsinassumingthatabovethespecifictaxmodels,ever-evolvingasexpectable ineverydynamicsociety, thereareaseriesofunderlyingcriteriainthecooperativefinancingofthepublicandcommonneeds.Themaincriterionisthatofcitizenship,whichimpliesassumingthesocialresponsibilitiesasanecessarycounterparttotheexerciseofcivicrights.5

2 Rufail, Sergio (Deputy Director General of Taxpayer Service of the Federal Revenue Administration of Argentina, AFIP): Conclusions of the International Civic-Tax Education Seminar. Buenos Aires, Argentina, October 6-10 of 2007.

3 Eurosocial, Taxation Sector: Virtual Civic-Tax Education Forum, November 28th – December 11th of 2007 (www.eurosocialfiscal.org).4 Goenaga, María (Tax Sociology Department of the Institute for Fiscal Studies of Spain, (IEF, as per the Spanish acronym):

Conclusions of the International Seminar on Civic-Tax Education. Buenos Aires, Argentina, October 6-10 of 2007.5 Institute for Fiscal Studies, IEF: Tax Education in Spain, 2005. By María Luisa Delgado Lobo, Marta Fernández-Cuartero Paramio,

Ascensión Maldonado García-Verdugo, Concha Roldán Muñío and María Luisa Valdenebro García.


64 TAXEDUCATIONCarolina Roca

Theforegoingplacesthedevelopmentofthetaxcultureunderaframeworkofactionthatgreatlyexceedsimmediacy,sinceitismostlyaimedatmiddleandlong-termobjectives.6ThisdifferentiatesitfromotherTaxAdministrationactions,generallycenteredonshort-termresultsaswellasfromtheTaxAdministrations’assessmentcriteriontomeasuretheimpactofitsactions,sincethelong-termconditionmentionedaboverequirescloserassessmentofthesociologicalvariablesratherthantheeconomicones.

3. REASONS FOR COMPLIANCE.

ForaStatetobeabletomeetitsobjectivesofprotectingthecommongoodandprovidingcitizensthebasicpublicservicestheyrequire,itneedsresourcesthataremainlyproducedbythetaxespaidbycitizens.

Thepaymentoftaxesisthespecificexpressionofcompliancewithregulations.Itentailsabidancebythelawineffect,whetherbysubjectionorwill.Inotherwords,itexpressesanattitudethatisdeterminedbycoercionorelsebytheindividualconvictioninasocialfunction.Coerciveforceisexpressedbylaws,theirmandatorycomplianceand,eventually,thesanctionorpunishmentfornoncompliancetherewith,whileconvictionisbasedonlyonastronglyrootedtaxculture.

Theyarenottwoself-excludingnotions–accordingtoArgentineauthorsEtkinandEstévez-,sincethelegalframeworkandtheobligationtocomplytherewitharealwayspresentandarticulatedintheconceptandpracticeoftheprevailingorder7,totheextentthetaxpayer’smotivationdoesnotarisefromthemandatorynatureandthefearofsanctions,butfromapersonalconvictionthatrelatestothewilltomeetthecivicresponsibilityofcontributingtothesupportoftheState.

ThetaxeventisatwofoldactbetweenthetaxpayerandtheState,inwhichthelatterassumesadoublefunction:collectingtaxesandreturningthemtosocietyintheformofassetsandpublicservices.Itisaregulatedsocialprocess,inwhichtaxcompliancerespondstoalegalmandatethatthetaxpayershallobeyandtheauthoritymustenforceaccordingtothepowersvestedbylaw.

Theforegoingunderlinesthefactthatthepaymentoftaxesresponds,aboveall,toalegalmandate.Thus,thesourcethatlegitimatestheperformanceoftheTaxAdministrationis,fundamentally,thelaw,andtherefore,theexerciseoftheauthorityarisingtherefrom.Therefore,citizens’taxawarenessmaybestrengthenedbyapplyingthestrictestcontrolmechanisms,providedthattheStateevidencesanhonestandefficientadministration.8

Regardlessofthefactthatsocietyisgovernedbyademocraticsystemorotherwise,compliancewithtaxobligationsrespondstoalegalorder,formedbynorms,termsandspecificsanctions,whichempowerthetaxauthoritytocollecttaxesandactagainstthosewhofailtomeetthepaymentobligation.

Nevertheless,thescopeofactionoftheTAexceedsthemerecollectionoftaxes,justliketheworkingareaofthepublichealthsystem,forexample,exceedsthemereassistanceincaseofillness.Justlikechildnutritionisbasisforanypublichealthsystem,theTaxAdministrationshallconceivecivic-taxeducationaspartofitscorefunctions.ThisissomethingthatisnotsoevidentformanyTaxAdministrations.Someconsidertaxeducationassomethingsuperfluous,or,inthebestofcases,anaccessoryorancillaryinstrumenttotheircoreprocesses,withouttakingintoaccountthatthedevelopmentofthetaxculturerepresents,inthelongterm,oneofthemostsolidandreliablebasesunderlyingthecollectionprocess.

6 Comment by Sergio Rufail (AFIP, Argentina) in the Virtual Civic-Tax Education Forum: “Succeeding in cultural changes requires the same time as the one required to implement them. Maybe we may identify short-term results, but they shall be tied to the degree of acceptance of the initiatives rather than the concrete changes, achieved and internalized by students or citizens. Tax Education is a long-term vision.”

7 Etkin, Jorge and Estévez, Alejandro: Tax Environment and Tax Education Strategies. AFIP Institute, Argentina.8 Montúfar, Rodrigo: Modern Tax Law Trends, page 57. Guatemala, 2000.



4. WHY PROMOTE A TAX CULTURE?

Thetaxcomplianceobligationestablishedbyalegitimateauthorityandinlinewithaspecificlegalsystem,maybesufficienttoachievethetaxcollectionobjectives,dependingontaxpayers’perceptionofriskandtheTA’scapacitytoauditandenforcesanctions.Nevertheless,itshallalwaysbeanobedient,passive,andverylikely,reluctantcompliance.Ontheotherhand,thenaturalwillingnesstopay,aself-imposedcommitment,shallalwaysbestrongerandmakethetaxsystemmoresustainableintimesinceitshallbe foundedona responsibilityacceptedandsharedbycitizens, in the frameworkofamoreopen,participativeanddemocraticsociety.

This is not detrimental to the importanceof the inherent authority in theperformanceof everyTaxAdministration;quitetothecontrary,itseekstounderlinethefactthattaxcompliancebasedonconvictionnotonlyrespondstotheinherentTAobjectives,butalsotheneedtoassertdemocraticcoexistenceaccording to the observanceof duties andexercise of the civic rights of the social conglomerate.Therefore,forademocraticrelationwithsocialcohesion,itisaprioritytobuildavoluntarycomplianceenvironmentagainstacoercivecomplianceone,9althoughbothareequallylegitimateandconvergentsincetheytranslateintoasameattitude:compliancewiththelaw.

It should be pointed out, nevertheless, that individuals better respect and abide by self-imposedregulations.JoséBernardoTorocallsthistheprinciple of self-foundationanddefinesitastheordercreatedbytheindividualsthatshalllivethereby,andcomplyandprotectit,renderingittheonlyorderspurringfreedomandthecoreelementofgovernance.10

Obligation-basedcompliancearisesfromthelegalorder,thepunitiveforceandthefearofpunishment–whicharelegitimatethoughnotself-foundedelements-, totheextentconviction-basedcomplianceoriginatesinthetaxpayerproperandthrivesonhisunderstanding,responsibilityandcommitment;inotherwords,onself-foundedandlegitimateprinciples,whichaddsvalueandendowsthistypeofcompliancewithgreaterconsistencyandsustainability.

5. LAW, MORALITY AND CULTURE.

Incertainsocialcontextswemayperceivearuptureordysfunctionbetweenthelaw,moralityandculture,whicharethreesystemsthatgovernhumanbehavior.ThistheoryleadtheMayor’sOfficeofBogotá,Colombia,headedbyAntanasMockus,tomakethedecisionofprioritizingtheso-calledCivicCulture,asetofprogramsandprojectsgearedatimprovingtheconditionsofciviccoexistencebymeansofaconsciousbehavioralchange,basedontheassumptionthatthevoluntarymodificationofthehabitandbeliefsofthegroupmaybecomeakeycomponentofthepublicadministrationperformanceandthecommongovernment-civilsocietyagenda.Thus,intheexperienceofBogotá,theCivicCulturestrategywasdevisedasaninstrumenttoenhancethemoralandculturalregulation,aswellastosucceedinagreaterconsistencyamongthemandbetweenthemandtheobservationofthelaw.

Alongsuchlinesofthought,thestrategiesforthedevelopmentofthetaxculturemaybealsoconceivedastoolstoharmonizetheethicandculturalvalues,forthemtoresultintherespectforlegislationandtheduecompliancetherewith.

9 Idem.10 Toro, José Bernardo: Education for democracy.



Thefurtheranceoftrulyeffectivetaxorfiscalpoliciesisnotpossiblewithoutrelyingonthetargethumanconglomerate.Inordertoreachabetterendintaxation,thehumanandsocialfactorshouldbeconsidered,asrecommendedbytaxsociology.11Allthetaxregulationsandplansconceivedinanofficeruntheriskofbeingfruitlessifdueattentionisnotpaidtocitizens’beliefs,attitudes,perceptionsandbehaviorforms,theirpersonalandcollectivemorality,andeventheirideasonhowtoorganizecoexistence.12

ItsrelevanceismadeevidentespeciallyinsocietiesaffectedbyweaktaxawarenessandanineffectiveState,factorsthataregenerallytiedto–andworsened-bythecrisisinsocialvaluesthatreinforcesthetheoryofdivorceamongculture,moralityandthelaw.Inmanycases,thisconvergenceofelementsadverse to taxes,and taxation ingeneral,goeshand inhandwith thecultof individualismand theprevalenceofconditions thatprioritize itabovesocial responsibility,solidarityandthepursuitof thecommongood.

Undersuchcircumstances,taxeducationmaybynomeansbereducedtothedisseminationofpracticesthatonlyservetofulfilltherequirementsofthetaxsystem,which,althoughvital,aremechanicalandever-changingtasksintime.Neithershallitbelimitedtothescopeofthetaxformality,thelegalorderand the reasons forcompliance therewith,but itshallbe,necessarily,aneducation focusedon theculturalchangeandtheprioritizationofethicsinthesocialconglomerate.

6. PERCEPTIONS AND ATTITUDES.

Oneofthemostrelevantprocessesforthegrowthoforganizationsismadeupbytheircredibilityintheeyesoftheusersoftheirservices.Insuchregard,theessenceofthesociallifeandthemodificationofbehaviorsarisefromtheperceptionandbeliefsofindividualsontheentitiesandleadersthatheadthem.

InthecaseofGuatemala,forexample,formanyyearstheimageofthetaxauthorityorTaxAdministrationwas tied to incompetence, inappropriateuseof resources,and illicitacquisitionofwealthby formerofficialsandpoorcontributionofpublicresourcestothedevelopmentofcommunities.ThelatterappliesinspiteoftheperformanceoftheTaxAdministrationinthelastdecade,focusedonlyoncollectionandlackinganyinfluenceongovernmentexpenditure.Nevertheless,taxpayersfailtomakethisdistinctionoffunctions,whichunderscoresthefactthatitreferstobothsidesofthesamecoin:ontheonehand,society’scontributiontotheState,and,ontheother,theforminwhichtheStatereturnsitintheformofpublicgoodsandservices.

Althoughthenotionofreciprocityisbasicandeasilyunderstood(taxesinexchangeforpublicservices),thedevelopmentofthetaxcultureistiedtoanevenbroadernotion,tax citizenship, whichoffersamorecomprehensiveviewoftaxation,inwhichthecivicdutyofpayingtaxes,financingofrightsandsupportoftheStateconvergeontheonehand,andtheappropriateuseofresources,transparencyofexpenditure,accountabilityandtheimportanceofthesocialauditorcivicsurveillanceontheother.

But theessenceof the tax culture extendsbeyond this, since it doesnot condition compliance toreciprocityoranyotherexternalelement,but,tothecontrary,perceivesitasaninalienableresponsibilitythatstandsonitsown,freefromanyfactorthatmaydiminishorrestrictit.Therefore,theactionsforthedevelopmentofthetaxculturerequireprocessestoenabletheemergenceofchanges,asregardsperceptionsaswellasattitudesintheindividualandthesocialaspects,whichtranslateintheconsciousandvoluntarycontributionoftaxes.Ofcourse,thisdoesnothindertheimportanceoftheactionstoimprovetransparencyofgovernmentexpenditure,thesocialfunctionoftaxesandthecredibilityoftheinstitutioninchargeofcollectingrevenue.

11 Montúfar, Rodrigo: Op Cit, page 58.12 IEF: Op Cit



Aspartofanintegralstrategythatseekstoimprovecollectionwhilechangingthepublicperceptionoftaxcompliance,aprocessarisesforthedevelopmentofthetaxculture.Thisisnotatalleasywhenwerealizedtheextentandstrengthwithindifferentsocialgroupsofanarrayofbeliefsandvaluesnotonlycontrarytotaxation,but,ingeneral,theobservationofbasicregulationsofcoexistenceandabidancebythelaw.

Therearecountlesscases inwhichwittinessandnativecunning toevadetaxesarecelebrated,aswellastheuseofstopgapstoavoidthemoravoidthecontrolsbytheTaxAdministrations,whetherforinternalorcustomstaxes.Suchbeliefsbecomegenuineanti-values, additionalhurdlesinthealreadydifficulttaskofpromotingthecultureoflegalityandtaxcompliance.

In an interestingarticle entitled “Fiscal andTaxPsychology”,MónicaDíazGómezpoints out: “thearchetypeofthe“nativecunning”inevadingtaxesisacceptedbytheVenezuelansocietyowingtotheabsenceofagenuineanddeeptaxculture.Thetaxpayer’spsychologyismarkedbyastrongtrendtowardsfraudandjustifiestheattitudewithfrequentlyheardquestions:WhyshouldIpaytaxesifpublicservicesareinefficient?WhyshouldIbeacomplianttaxpayerifthecorruptstealourtaxmoney?Formany,committingtaxfraudisaformofpleasurethatenhancespersonalvanityandprovesskillsbeforeothers.Itisbelievedthathumansocialbehaviorisdeterminedbytheprincipleofthepursuitofpleasureandthatiswhytheselfishnatureofthehumanbeingmakeshimfondofhispossessionsorwhathebelievestobehispossessions;thusthedifficultyinpayingthetaxesduewithpleasureandvoluntarily”.13

Examplesof this typeprevail inmanyLatinAmericancountries,wheregenuine taxationantiheroesappear–orheroesoffraud-insocialsectorsthattendtobeverytoleratingwithsuchtypeofillegality,whetheritisminimizedregardingthemostseriousviolationsofthelaworevenjustifyingitbasedonamyriadofarguments,fromthepretextofgovernmentcorruptiontothosetiedtotheuserorconsumerinterest,whomay purchase at lower prices without taxes.

Suchbeliefsshallnotbedeemedacomponentofa“culture”;rather,theyaresocialbehaviorsorsocialbehavioralpatterns,frequentlyrelatedtoadoublemorality,whichinpubliccondemnsillegalitywhilepracticingitinprivate.Thus,thestrategyforthedevelopmentofthetaxcultureasoneofthepillarstosupporttheimprovementofcollectionshallbemarkedbyanintegralnatureandalong-termapproach,sincetherearemanydifferentfactorsthatincreasethecollectiveimaginary,inadditiontothefactthatachangeinvaluesandattitudesisnotachievedovernightandwithoutanintensiveandsystematicinterventiontodefineit.

Thisundoubtedlyrequiresastrategymadeupbyclearworkingareas,consistentandappropriatelystructuredthatsupplementandimproveeachotherasafunctionofthedevelopmentandimprovementofcivicvaluesaswellastheimprovementoftheawarenessonthetaxobligations.Therefore,itisnotamatterofisolatedassignments,specificcampaignsorsporadicinterventionsinonetargetgrouportheother,butratherabroaderandmoresustainededucationaleffort,sinceonlyonsuchbasisshallthecurrentandfuturetaxpayersubjectivitiesbemodified;thatistosay,redirectingbeliefs,valuesandbehaviorsthatshallresultinthepracticeofnewsocialhabitsandattitudesbeforetaxationinthefuture.

13 Díaz Gómez, Mónica: Fiscal and Tax Psychology.



7. ADOPTION OF STRATEGIES.

7.1 Objective and scope.

Thechiefobjectiveofthetaxcultureistoinstillbehaviorsinfavoroftaxcomplianceandagainsttaxfraud,byconveyingideasandvaluesthatmaybeinternalizedattheindividuallevelandvaluedatthesocialone.Thisimpliesaculturalchangethatexplainsthelong-termcondition,normallyoneofthemostrelevantfeaturesineverystrategyforthedevelopmentofthetaxculture.

OneoftheconclusionsoftheInternationalSeminaronCivic-TaxEducation,mentionedbefore,wasthatthereareno“recipes”fortheadoptionofthestrategiesgearedatthedevelopmentofthetaxculture,sincetheinherentfeaturesineachcountryaswellastheresourcesavailabletoeachTaxAdministrationarethefactorsthatultimatelydeterminethetypeandscopeoftheactionstobeundertakeninthearea.

Likewise,itwouldbeidealtobeabletoworkonall“fronts”andbymeansofacombinationofstrategiestoreachthedifferentbeneficiariesoftheprogram,butthisgenerallystumblesovertheinherentlimitationsoftheavailableresources,inadditiontothefactthattheprocessesfeaturedifferentpacesandspecificitiesrequiringdifferenttimeframesandspaces.14Therearesignificantdifferences,forexample,betweenpreparingadidactichandbookforteachers,creatingaradiocampaign,creatingaWebpageandputtingtogetherastandinaschoolfair.

TheimportantaspectisthateachTaxAdministrationclearlydefinesitstaxdevelopmentobjectivesandsetsforthitsprioritiesaccordingtosuchobjectivesandtheresourcesavailable.GastónBruzzone,fromtheFormalEducationareaofAFIP,explainstheArgentineexperience:“Inourcasewestartedwithtrainingcoursesforelementaryschoolteachersandauthorities.Laterweincorporatedthesecondaryandhighereducationlevels.ButIthinkthatinourcase,theeducationteamsoftheTaxAdministrations,itismoreeffectivetoworkinstages.Theimportantaspectisnottolosesightofthefactthatweareundertakingaverylong-termeffort;thatculturalchangesaresustainedandextendedintimeand,therefore,itisalwayspossibletoaddactionstothosealreadyimplementedsuccessfully.”15

7.2 Stakeholders.

TheTaxAdministrationmaybe the first stakeholder in thedevelopment of the tax culture andactaccordingly,todefine,promoteandfinanceit,butitisbynomeansaloneinthiseffort.Theeducationadministrationiscalledupontoplayakeyroleanditisclearthattherestofthepublicadministrationshallalsoformpartoftheprocess.Infact,itshallbedeemedaStatepolicyandnotagovernmentpolicy,apermanentprogramandnotacyclicalproject,sothatnotonlythetaxagencyineachcountryassumesresponsibilityoverthetaxeducationprogram(althoughitshallbethesoleauthorityforitscontent),butmanyotherplayersshouldbecomeinvolvedandalliancesbepursuedinsuchrespect:therestoftheTaxAdministration,ministriesofeducation,theprivatesector,municipalorprovincialcorporations,etc.16

Moreover,allianceswithotherplayers(privatecompanies,NGOs,internationalagencies)legitimatethemessageoftheprogramsincetheydonotrepresentthevoiceofthestate,buttheprivatecommitmenttocommoninterests.17

14 Comment by Sergio Rufail (AFIP, Argentina) in the Virtual Civic-Tax Education Forum: “As regards the level at which we should begin, I believe in ALL the levels in which we may sustain the strategy in time. All levels are important, but as we move higher, the strategy shall be improved, strategists shall become increasingly convinced and more prepared, since the arguments shall be increasingly more difficult to contain.”

15 Bruzzone, Gastón (AFIP, Argentina): comment in the Virtual Civic-Tax Education Forum.16 Goenaga, María: Op Cit17 Rufail, Sergio. Op Cit



7.3 Beneficiaries.

SomebelievethatalltheactionsoftheTaxAdministrations–includingtaxeducation-shallbefocusedexclusivelyonthetaxpayers,effectiveorpotential,sincetheyconstitutethesocialbaseofeffectivecollection.Fromthisstandpoint,itisnormaltoconsidertaxationasaneventthatonlypertainstoadultsand,morespecifically,adultsthatconductacertaintypeofeconomicactivitysubjecttotaxes.Therefore,theyoungwouldhavenoreasontoworryabouttaxation,sincetheyaretotallyforeigntothetaxeventuntiltheystarttoparticipateintheeconomicactivityandbecomeresponsibleforformaltaxobligations.Fromthisstandpoint,thetaxeducationoftheyoungercitizenswouldlacksense.18

TheInstituteforTaxStudiesofSpainposesthefollowingquestions:Isitpossibletoassertthatchildrenandyouthsaretotally foreignto thetaxevent?Shall theeducationsystemignorethis fact?Realityindicatesotherwise:neitherarethelatterforeigntothesurroundingworld,includingtheeconomicactivitiesandtaxation,norshouldtheschoolignorethetaxevent,totheextentitisamatterofcitizenshipandafundamentalpartoftheeducationalmissionis,orshouldbe,toeducatethecitizensoftomorrow,thatistosay,toprovideforthenecessaryconditionsforindividualstolearntoadapttheirbehaviortotheregulationsineffectintheirsociety.

Taxnormsformpartofthesetofsocialnormstobemetbyanadultindividualinademocraticsociety,bywhichthetaxresponsibilitiesshouldformpartofthesetofvaluesthateverycitizenshallassume,respectanddefend.19Accordingtothisapproach,sharedbytherepresentativesoftheTaxandeducationAdministrationsgatheredinBuenosAires,inOctoberof2007,childrenandyouthsarethegenuineandnaturalbeneficiariesofthetaxeducationprograms:“Formaltaxeducationshallreachalllevels,sinceitsapproachentailscomplexitiesandinterestsinherentineachdevelopmentstage.Achildlearnsbasiccoexistencerules.Ateenagerunderstandsthesocialsenseoftaxes.Aprofessionalindividualembracesrulesandhabitsforhis/herperformance.”20

Theotherimportantbeneficiariesoftheactionsofthetaxculturearecitizens.“Theeffortstargetedatthemshallbeasintensiveasthosegearedatchildrenandyouthswithintheformaleducation.Inthemiddleterm,citizensshallconveysuchvaluestotheirchildren,fromtheirpersonalconviction”,21 inadditiontothefactthatthetaxpayingpopulationofthepresentbelongstothissector,whichalongwithcorporationsmakeupthegreatmarket oftheTaxAdministrationoverall.AlthoughtheTAcannotandshallnotdisregardthecommitmentofinformingandguidingtaxpayersontheformaltaxationaspects;thatistosay,thenormsandpracticeoftaxcompliance,theessenceofthetaxeducationtranscendsthemereknowledge of taxes(whattheyareandhowtopaythem),tofocusonthesocialandethicalcontexttowhichtheypertain,whichismorerelatedtothereasonandpurposeofpayingtaxesintheframeworkofacoexistencemodelgovernedbyrightsanddutiesforallthemembersthereof.

Lastly,athirdrelevantbeneficiaryofthetaxeducationprogramsistheTaxAdministrationandFinanceMinistrystaff,whichultimatelyconstitutesthefaceoftaxationintheeyesofcitizens,fromthestandpointofrevenueaswellastheadministrationandallocationofexpenditure.AccordingtoRodrigoMontúfar,oneoftheDirectorsofSATofGuatemala,thetaxeducationeffortsshallbepermanentlyfocusedontheofficialsandemployeesoftheTaxAdministration,forthemtoknowanddulyenforcethetaxlawsandlearnhowtoguidethetaxpayertopaytaxescorrectly.22Thiscreatestheneedtoincludepublicservantsingeneralinthistargetsector,manyofwhomfrequentlyfailtorealizetherelationoftaxationandtheirperformance.

18 IEF: Op Cit19 Idem.20 Rufail, Sergio. Op Cit21 Idem.22 Montúfar, Rodrigo: Op Cit, page 40.



7.4 Scopes and messages.

Byvirtueoftheultimategoalofcontributingtothedevelopmentofcitizenship,thestrategyshallnotbelimitedtothetaxsphere,butalsoextendtothefiscalarea.Eurosocialdefinesitasfollows:iftheappropriatecompliancewiththetaxobligationsisoneofthepillarsthatsustainthearchofcivilizedcoexistence,theotheristheappropriatemanagementofthegovernmentexpenditureprograms.AcountrymayenjoyaneffectiveandefficientTaxAdministration,butifJusticeisvenal,orEducationandHealthdeficient,orthegovernmentofficialsaredishonest,thebuildingshallbeunsafe.Thetaxeducationshallnotlosesightoftheotheraspectofthepublicbudgetandalsoseetotheotheraspectoftaxfraudthatrelatestogovernmentexpenditure.Thus,taxeducationisastrategynotsomuchtoimprovecollection,buttobuildabettersocietywitheveryone’seffort.23

Abasicaspectrequiredtodefinethestrategiesofdevelopmentofthetaxcultureistheunderstandingofthesocialelementstiedtothebehaviorofthegroups.Evenwhenbehaviorsarecommon,eachgroupfeaturesitsowncodes,inmanycaseslearnedfromonegenerationtoanother,conveyedfromparenttochildren,teacherstopupils,aswellasinfluentialplayerstothepublicopinion.

Allthisistransformedintotruthsbymeansofabeliefsandbehaviors’socializationprocess,whichenablesittobevalidatedinformally,buttranscendsandisacknowledgedasacommonlyacceptedattitude.

Thus, thedevelopmentof the tax culture requires thecreationofnewcodes,newmessages,neweducational contentandnew formsof communication thatenable toapproach thedifferentgroupsappropriately,easilyandreliably.

Theneedtoadopttaxeducationstrategiesisinverselyproportionaltotheleveloftaxcompliance.Themoreandbettercitizensmeettheirtaxresponsibilities,thelessnecessaryitappearstofosterthetaxculture.Evenso,countrieswithhighlevelsoftaxcompliance,suchasCanada,UnitedStates,SwitzerlandandNewZealand,includetaxdevelopmentintheireducationalprogramsto“prepareforadultlife”.24

7.5 Education as the pillar.

Undoubtedly,thebackboneinthedevelopmentofthetaxcultureiseducation.Itconstitutesthemostpowerfultooltotransformindividuals’waysofactingandthinking.Isn’tasociety’sculturetheresultofeducation?ThatiswheretheTaxEducationmissionfindsitspurposeanditsinterestintheeducationalprocesses.25Thus, if issues relative to health, environment andnutrition, road safety educationoreducationonelectoraltopicsareincludedintheeducationsystems,thenthedevelopmentofthetaxcultureandtaxeducationshallbealsoincluded.26

AccordingtoanAfricansaying,“awholepeoplearenecessarytoeducateachild”.ThisistheapproachfollowedbyBernardodelTorowhenheassertsthatthegreatestchallengeinanydemocraticsocietyisthatofbuildingapubliceducationfordemocracy,thatistosay,focusedonthedevelopmentofcitizenswhogivelifeandsustainabilitytodemocracy:knowledgemakessensefromthestandpointofdemocracytotheextentschoolcontributestoformindividualscapableofbuildingthesocialorderthatenablesanhonorablelifeforall,incooperationwithothers.

AccordingtoDelToro,democracyisnotnaturalinthehumanbeing.Democracyisaninventionand,byvirtuethereofshallbetaughtandlearned.Thus,oneofthreefirstpurposestomeetinademocraticdevelopmentprocessisthatchildrenunderstandthat,insocialterms,theexistingorderandtherelations

23 Eurosocial, Taxation Sector: Op Cit24 IEF: Op Cit25 Salas, Dolores (SAT, Mexico): comment in the Virtual Civic-Tax Education Forum.26 IEF: Op Cit



arisinginsocietyarenotnatural,butbuiltbypeople,andtherefore,modifiable.Whenaneducationsystembelievesthateverythingisnatural,itisveryeasytoacceptthattherearechildrenthatmaypasstheschoolyearandothersthatmayfail,withoutanyfundamental.Butwhenwelearnthatthesocialorderiscreated,theonlylogicisthatallchildrensucceed,becauseschoolsuccessmaybecreatedandbuilt.Afirstfeatureofdemocraticeducationandthedemocraticethos inademocraticcultureisthateveryoneunderstandsthatallthesenotionsshallbetaughtandlearnedbecausetheydonotcomenaturally.

Suchcriterionisequallyvalidforthedevelopmentofthetaxculture.Inademocraticsociety,taxesderivefromsocialagreementsmadeintolawsbyvirtueofthepowerthatthecitizenryproperdelegatesuponlawmakersandauthorities.Therefore,thetaxsystemrepresentsaself-imposedsocialcommitmentthateverycitizenshalllivebyandrespect,basedonthesamevaluesthatenabletoexercisecivicrightsandobligations.Itisacreationthat,justlikedemocracy,shallbetaughtandlearnedbecauseitentailsnotionsandvaluesthatarenotnatural,butcreatedbythesocietyinwhichtheyliveandaccordingtotheStateinwhichtheywishtolive.

Valuesarenotinherentlyeducationalcontentsbutthebasisoftheeducationstrategy,andrequireacross-sectionalandongoing treatment in theeducationcurriculaoverall -fromelementary tohighereducation-,inlinewiththenotionthatthemostrelevantmeanstoteachandlearnthemshallbebasedonexperience,sinceitenablesabetterunderstandingandincorporationthereof.

Nevertheless,itisnotrecommendabletolimitthemessagesandcontentoffiscaldevelopmenttooneeducationalcurrentortheother.Justliketheeducationalsphereisunlimitedwhenitcomestoeducationforlife,thesameapplieswhenitcomestoeducatingforciviclife,whichisultimatelythefundamentalendofthetaxculture.

Infact,functionalinteractionsexistamongformal,non-formalandinformaleducation:complementary,supplementary,substitution,reinforcementandcollaborationrelationsaswellasintervention,sothat,evenifschoolformspartoftheformaleducationsystem,itmayincludenon-formalandinformalprocesses.Itisevenconsideredthattheformaleducationalinstitutionsshouldincreasetheuseofresourcesfromtheother twoeducational trends. In the frameworkof formaleducation, theknowledgeobtainedbyindividualsinnon-formalandinformalcontextsshouldbevaluedandaccepted.Itbecomesnecessarytoadapttoplatformsthatenableandpromotethecoordinationamonginstances,inordertooptimizethecomplementarity.27Thegenuinetaxcultureisinstilledinalllevelsofeducation,forfuturecitizenstobeconvincedoftheneedtocontributetothedevelopmentofthecommunity.28

7.6 Conditions of the strategy and its complementarity.

Oneoftheperformanceissuesthattendtoarise ineverytaxeducationstrategyistophaseinandharmonizetheeducationalcontentsinlinewiththeprinciplesandpurposesreferredtointhisdocument.Conveyingthemtotheintermediationagents,chieflyteachers,isanothercrucialtopic,particularlyowingtotheimportanceoftheschoolenvironmentsinfacilitatinglearningandincorporationofthecivicvaluesbymeansof theappropriate instruments, forexample,educationalmaterialandgames,discussionworkshops,practicalexperiences,etc.

Theselectionoftheaudiencesandthemeanstoreachthemconstituteadditionalrelevantchallengesforthestrategyandentailstheneedtoarticulatethelatterintheformofsequentialorcomplementaryprojects,aswellasestablishobjectivesandinherentindicatorsforeachoneofthem.

Theexamplesmentionedsetforthtwoofthebasicconditionstobefeaturedbythetaxculturestrategies:performancecontinuityandspecificityofitsactions.Inlinewiththese,theyalsohighlight,amongothers,27 Trilla Bernet J, CEAC, Barcelona, Spain: non-formal education.28 Montúfar, Rodrigo: Op Cit, page 30.



thenecessarysocializationwithotherplayers;itscross-sectionalnatureintheeducationsystem;itsdisseminationtowardsnon-formalandinformalspaces;anditsinclusioninthegovernmentagendaaswellasthemedia,whichtendstobeanimportantsphereinthedevelopmentofimagesandperceptionsthatinfluencetheirsocialbehavior.

ButtherearealsootherstrategiesinherentintheTA,whichmaysupplementandstrengthenitstaxcultureaction,suchasthecaseofallthosereferredtotaxpayerservice.Thecomplextaxsystems,cumbersomeformalities,failuresintheguidanceoftaxpayersorinappropriatetaxpayerassistancepracticesarenotgoodalliestofosterthetaxculture.Tothecontrary,theyfostercounterproductiveeffectsthereupon;totheextenttheyunderminetheimageoftheTAandaffectitscredibility.

Thus,theadoptionofactionstosimplifyandmakethetaxandcustomsprocessesmoretransparent,aswellasrenderingbettertaxpayerservicesmaybeveryinstrumentaltoimprovethepurposesofthetaxeducationstrategyand,ingeneral,thesocialperceptionregardingtheperformanceofthecollectionagency.

8. THE EXPERIENCE OF GUATEMALA.

Untilthreeyearsago,Guatemalahadnosignificantexperienceinaspectsrelatedtothetaxculture.Except for certain isolatedandbasic attempts, the issuewasnot included in thepublic agenda. Itwasn’tuntil2005thattheTaxAdministrationundertookanintegraleffortinsuchdirection,bymeansofdisseminationandpromotionactions,aswellasdifferentformal,non-formalandinformaleducationprojects.29Thisshortbutintenseexperiencehasbeenaninputforthisdocument,bywhichwehavemadeacriticalreviewandprovidedfeedbackonourvisiononthedevelopmentofthetaxcultureanditsimportanceasastrategytopromotevoluntarycompliance.

Forexample,duringtheprogramdesignphase,SATtriedtoseparatethetaxcultureinitscapacityofobligationanddutytopayfromthefinalendofresourcesandtheforminwhichtheyare“returnedasservices”tosociety.ThisisduetothefactthattheyaretwofunctionsfromtwodifferentinstitutionsandtheTaxAdministrationhasnocontroloverthedistributionofincome.

Nevertheless, inthediscussionworkshopsthatweconductwiththeparticipationof localauthoritiesandcivilsocietyfromthetwenty-twodepartments(provinces)ofthecountry,itbecameveryclearandobviousthatthereisnobetterpromoterofthetaxculturethanappropriategovernmentexpenditure–efficient,rationalandtransparent-.Inotherwords,societyitselfshowedusthatanimportantstimulus(orlackofstimulus)fortaxationismadeupbythemanagementandallocationofgovernmentfunds,inadditiontothefactthat,inthecaseofmanycountries–amongthemGuatemala-,theenforcementoftaxesisdeemedadiscretionalact,relatedtothepositiveornegativeperceptionontheuseoffunds.

Oneof theobjectivesof thedevelopmentof the taxcultureshallbe,precisely, tobreak theviciouscircleandcreateawarenessthattaxationisnotonlyalegalobligation,butadutyofeachpersonwithsociety.Additionally,theindividualshallbeconvincedthatmeetingsuchresponsibilitygrantsthemoralauthorityrequiredtodemandtheGovernmentAdministrationtomaketheappropriateandtransparentuseofpublicfunds.

29 In order to define each one of them, we shall adopt the notions defined by the Institute for Fiscal Studies of Spain, IEF:• Formal education: is the one developed within the educational system when it is marked by a formal denomination that leads to the

achievement of a degree, diploma or certificate authorized by the education administration.• Non-formal education: is the one developed outside of the educational system through courses or training activities that do not

result in a degree, diploma or certificate authorized by the education administration.• Informal education: it refers to every educational process that is delivered intentionally or unintentionally by any means and by any

institution.



ItisworthpointingoutinthecaseofseveralLatinAmericancountries–includingGuatemala-thatourpeoplerepresentdiverseculturesand,therefore,thetaxculturestrategiesshallbeadaptedtosuchdiversitytobeeffectiveineachoneofthegroupsthatmakeupoursocieties.

FortheimplementationofthePermanentTaxCulturePrograminFebruaryof2005,wedidnotrelyonaninitialmeasurementofcitizens’taxationknowledge,whichwouldhavebeendesirable.Inordertodeveloptheprogramstrategyandselecttheactionsandpriorities,aninitialproposalwasthestartingpointaddressedinthediscussionworkshops,asmentionedabove.

Amongthelessonslearnedinsuchworkshops,wemaymention:

Theappreciationofthesocialaspectoftaxation,thatistosay,therelevanceofconsideringtheothersideofthecoin–theallocationofrevenue-.

Theimportanceofsocialparticipationinthemanagementandexecutionofthetaxculturedevelopmentprojects.

Theneedtodevelopanintegralstrategywiththreeareas:Education(Formalandnon-Formal),Promotion(InformalEducation)andDissemination, based, in turn, on three cross-sectional axes: Information,TrainingandAwareness.

8.1 Actions of the permanent Tax Culture program.

Hereunder,webrieflydescribetheactionsdevelopedtothepresentaspartofourintegralstrategy:

Informationconsidersaspectssuchasthedisseminationoftheprogram,itscontentandactions,thecreationandmaintenanceof theTaxCulturePortalon the Internet, the implementationofdifferentawarenesscampaignsandthepublicationsonthebasicinformationcontents,forchildrenandyouthsaswellasadultsandtaxpayersingeneral(forexample,thepublicationonthemediaofdifferentinformativeandeducationalpresspublications:infomercialsontax,customsandthecountry’staxhistory).

Developmentreferstoalltheeducationalactionsinitsdifferentapproaches(formal,non-formalandinformal),amongwhichthefollowingareincluded:a) Inclusionofthetaxcultureintheelementaryschoolcurricula,inadditiontothedistributionofschool

textsandtaxeducationgames;b) Jointworkwith theMinistryofEducationonthereviewof theeducationalcurriculaof thebasic

educationanddiversifiedhigh-schoolcyclesaswellasonthecurriculartransformationoftheprogramfortheBachelor’sDegreeinAccounting;

c) DevelopmentofaprogramtosupporttheprofessionaldevelopmentofindividualswiththeBachelor’sDegreeinAccountingbasedontheimplementationofahighertaxeducationcourse(onsiteandvirtual)andsupplementedbyanacademiccertificationprojectforsuchprofessionals;

d) Taxationtrainingcourses,fortaxpayersaswellasindividualswithaBachelor’sDegreeinAccountingwhoconductintermediationactivitiesbetweentheformerandtheTA;

e) DevelopmentofataxtrainingprograminMayanlanguagesforthedifferentruralareasinthecountry;f) Staging two tax culturemusicals for schools andpublic activities, aswell as productionof the

audiovisualversionsthereof;g) ExecutionoftheTaxLotteryprograminthe22departmentsoftheRepublic,conceivedtostimulate

consumersingeneraltorequesttheinvoiceoftheirpurchasesofgoodsandservices;h) Presentationofaninteractiveaudiovisualexhibitionandaspaceforcomputergamesinanarea

withimportantassistanceofchildrenandfamilies;i) Productionofamusicalvideoclipmainlyfocusedontheteenageaudience,disseminatedondifferent

media:television,radio,theInternetandcellulartelephony;and



j) Productionofatelevisionseriesforchildrenintheeducationalentertainmentarea.

Lastly,thecreationoftaxawarenessplaysavitalroleintheEducationaswellasDisseminationprojectsandactivities,sinceitseeksthatthetwopreviousaxes(informationanddevelopment)transcendthemindsofbeneficiariesandbecomeprinciplesandperceptionsthattranslateintovoluntarycompliancebehaviors,bythepresentaswellasfuturetaxpayers.

8.2 Inter-relations.

Apparently, the school environment is not proper of theTaxAdministrations,which underlines therelevanceofrelyingonthesupportoftheeducationauthorities,but,aboveall,achievingthecommitmentofteachersontheissue.InthecaseofGuatemala,thecooperationprocessamongtheTaxandEducationAdministrationsisstillincipient,buttheinitialexperiencehassetforththatclassroomsarefertilegroundnotonlyfortheformaleducationalactions,butalsofortheinformalones,suchasschoolcompetitionsandtheaterplays,forexample.30

Althougheducationisbyexcellencetheenvironmenttodevelopthetaxculture–particularlyinthecaseofchildrenandyouths-,theothergreatfieldofactionofthestrategyadoptedinGuatemalaisthatofdissemination,assetforth,whichincludesadvertisementsviaconventionalmedia(newspapers,radio,television)toalternativemediaadvertising(outdoorsigns,artisticperformances,sportsevents),includingtheproductionofdifferentelectronicandprintedmaterial,andthespecificInternetPortal.

Thedisseminationactionsnotonlyenabletoreachothertargetgroups,butalsosupplementtheactivitiesaimedatchildrenandyouths.Additionalanddifferenteducationalmechanisms31alwayscoexistwithschool,amongwhichwemaymentionthemedia,especiallyrelevantbytheircoverageandinfluence.

InthecaseofGuatemala,thecommitmentofotherpublicplayersisarelevantneed,chieflybecause,aswehavementionedbefore,thefunctionsoftheTaxAdministrationarelimitedtocollection,whiletheexpenditureallocationisafunctionoftheCentralAdministrationand,particularly,theMinistryofPublicFinance.Thus,theactionsforthedevelopmentofthetaxcultureshallnotexcludethereferencesonhowtomanageandinvestgovernmentresources,sincetheissuecallsforthisconceptuallyintegralapproach.

8.3 Strategy principles and features.

ThedevelopmentoftheSATtaxculturehasenabledtoobserveaseriesofprinciples,whichinlinewiththefeaturesofitsinitialdefinitionandthoseincorporatedinthecourseofitsperformance,havegranteditaninherentphysiognomy,whichinturnhasfacilitateditsincorporationinthepublicagenda.Amongsuchdistinctivefeatureswemaymentionthefollowing:

Direction: relevantproducts,messagesandactionsforeachtargetgrouphavebeendeveloped,andinspiteofconveyingasinglecoremessage,theyhavebeenadjustedtothelanguageandfeaturesofthemembersineachsegment.

Mechanism: inadditiontotheabove,theuseofstimulisuchasimages,musicandotheraudiovisualelementshasbeenkeytostrengtheningthecreationanddisseminationoftherelevantmessages.

30 Comment by Sergio Estrada (SAT, Guatemala) in the Virtual Civic-Tax Education Forum: “Not every initiative shall be considered as a formal education initiative. Certain efforts may be very effective from the alternative or non-formal standpoint, provided they are well managed. The important aspect is that every action responds to a strategy carefully defined by the TA and devised in terms of impact pursued as well as cost/benefit for the administration.”

31 Trilla Bernet: Op Cit



Message: oneofthenotionslearnedfromtheprogram’spracticesandactionsistheuseofclearandsimplelanguage,accessibletoallpublics,andmaintainingasinglemessageforeachoneoftheproductsorservices,avoidingambiguityorunnecessarydigressions.

Consistency: it is inherent not only conceptually, but also as regards perception,which attachesimportancetotheuseofimages,characters,colors,formsandallthestimulirelatedtoanimmediateidentificationoftheproductsorserviceswiththecoremessage.

Nature: aworkingmethodologyhasbeenadopted,whichontheonehandcallsuponreasonessentiallybased on common sense, and on the other, focuses on the audiences’ emotional perceptions onaspectssuchaskindness,happiness,humorandenthusiasmofteamwork,whichgeneratedidentityandidentificationwiththeprogram’scontentandobjectives.

Facilitation: it isachievedbystimulatingthoughtsandemotions,games,knowledgebasedonnewmaterialsandtheadoptionoftraditionalandalternativecommunicationchannelsthatincludetheInternetasatechnologicalelement.

Tools: avarietyoftoolshavebeenemployedsuchas:books,games,electronicdevicesandInternetapplications,whichmaybewithinthereachofthedifferenttargetgroupsandareeasytoreproducethereby.

Audiences: theappropriateselectionoftheaudienceshasbeenaprocessimplyingdeepeffortswithkeyplayersandhasbeenperformedintheinteriorofthecountrytoknowtheattitudesandperceptionsofthedifferentaudiencesasregardstaxmatters,aswellastheirreactionsbeforedifferentprogramactions. Products: adiversityofeducationalaswellascommunicationalproductsandmaterialshavebeendesignedbyspecialistsafteranadequatevalidation,whichhaveservedtocreatea“basisoftrust”andalinkbetweentheprogramanditsdifferenttargetgroups.

Receptiveness: aside from isolated expressions of skepticism or rejection, we have detectedreceptiveness,acceptanceandotherpositivereactionstothetaxcultureeffortsinthecourseofthedevelopmentoftheprogram,whichhasbeenusedtoextendthesocialpillarstheretoandworkonthearticulationofnewallianceswithdifferentinstitutions,public,privateandinternational.

Team: this is a key factor in the strategy, on the one handdue to the fact that the creation of amultidisciplinaryworkingteamhasenabledtocreatemessages,productsandapproacheswithdifferentprofessionalviewsandontheother,thattheallianceswithotherplayersandinstitutionsenhancestheprogramandfavorsitssustainability.

Support: nostrategymayoperateifitlacksthenecessaryfinancing.Fromthebeginning,theprogramhasreliedonthesupportofthethreemainTaxAdministrationauthorities,setforthanappropriatebudgetfortheprojectsandactionsdefinedsince2005,andsince2007ithasbeensupportedbyadedicatedadministrativeunitthatdirectlyreportstotheseniorauthorityoftheinstitution.

8.4 The local environment and reciprocity.

InseveralnativecommunitiesofGuatemalathetraditionofmakingcontributionsofdifferentnaturehassurvived(monetary,inkindorinlabor)tocarryoutworkoractivitiesforthebenefitofthecommunity.Thiscontribution,calledkuchujintheMayank’iche’ language,representsanancientsocialpracticethatclearlyillustratestheprincipleofreciprocitymentionedbefore,sinceitconstitutesthematerializationofapaymentorinvestmentpriortoobtainingagoodorserviceaimedatsatisfyingacollectiveneed.



Likewise,numerousnativecommunities follow the traditionofgatheringcontributions topay for theexpensesofMayanspiritual ceremoniesor rituals, aswell as in the churchesof different religiousdenominationswefindthepaymentofthetithebywhichthecongregationfinancesthematerialsupportofthechurchand,inexchange,receivesaspiritualgratificationaccordingtoitsbeliefs.

Suchexamplesnotonlyexpresstheimportanceofreciprocityasthegroundforthevoluntarycontributioninexchangeforacollectiveorindividualbenefit,butalsostatetherelevanceofthelocalenvironments,relativelyclosedorlimited,sothatthepracticesofagenuine,collaborative,self-foundedpracticesmaybematerializedandsustainedtherein,andtiedtothetransactionalnotionof“giveinordertoreceive”.

Suchtypeoflocalexperiencesmayconstituteagoodstartingpointtoinitiatetaxcultureprojectsthat,fromthemicroorlocalviewpoint,mayenabletobuildcasesthatshowgoodpracticesontheissue,whetherinschool,ayouthcluboranartisticorsportsassociation.

Forexample,inGuatemala,SATislaunchingapilotprojectonthe“modelmunicipality”(namedSoundMunicipality),whichinitsfirststageseekstolaythegroundworkforamunicipaltaxcompliancemodelbasedonintensivetaxpayers’registrationcampaignsandtheuseofthemandatoryinvoiceinallthetransactionsofgoodsandservices,aswellas thedeepeningofnumerous taxcultureprojectsandactionsinthemunicipality,especiallyintheeducationalfield.

8.5 Insight and exploring.

Thedynamicofeverystrategytodevelopthetaxculturerequiresmoreinsightofitsactionsongroundthathasprovenfertile,aswellasexploringnewareastoextendorsupplementtheeffortsoftheeducationalexperience.

Forexample,theformaleducationactions,onthebasisoftheirnatureandbroadness,appearamongtheonesrequiringmoreinsight,buttheymaybealsostrengthenedbytheapplicationofdistanceeducationtools,whichalthoughposingthechallengeofpromotingaccesstonewtechnologies,presentattractiveconditionsintermsofeconomy,coverageandimpact.

Asregardstheapproachandcontents,theexperienceofthetaxcultureprograminGuatemalafeaturesaprogressivemigrationtothebroadestsphereofcitizendevelopment,whichopensthedoorstoanewdimensionforthescopethereof,whileitoffersamorediversearrayofeducationaloptionsandpotentialstrategicalliances.

Finally,understandingtherelevanceofimprovingtaxpayers’serviceandassistancehasleadSATtoincorporatethistypeofinitiativesintoitsstrategicinstitutionalplanfor2008-2011,underthemotto“easyandsound”,preciselywiththepurposeofunderscoring,ontheonehand,itscommitmenttomakingformalitiesandprocedureseasierandmoretransparent,while,ontheotheritemphasizestheimportanceofachievingfull,fairandaccuratecompliancewithtaxobligations.Thecontinuityofitstaxculturestrategy,aswellastheexpansionanddeepeningoftheactionsundertakeninthisfield,iscalledtocontributeintheachievementoftheobjectivesofsuchbroaderinstitutionalstrategy,sincetheyalreadyconstituteasignificantcomponentthereof.



9. CONCLUSIONS.

1. Thepayment of taxes is the expressionof compliancewith a legal norm,whichmaybedeterminedbytheobligationtorespectthelawortheconvictionthattaxcomplianceisacivicduty.Thelatter isthebehavioralexpressionofthetaxculture,whichconsistsinthesetofprinciplesandvaluesthatdeterminecomplianceastheresultoftheunderstandingandself-foundedacceptanceoftheregulationsthatgovernit.

2. ThesourcethatlegitimatestheperformanceoftheTaxAdministrationis,fundamentally,thelaw,and,therefore,theexerciseoftheauthoritystemmingtherefrom.Compliancewithtaxdutiesrespondstoanorderestablishedbylaw,markedbyregulations,termsandspecificsanctions,whichgrantthetaxauthoritythepowertocollecttaxesandenforceauthorityagainstthosewhofailtomeettheirtaxobligations.Nevertheless,inordertopromotedemocraticcoexistencewithsocialcohesion,itisofutmostprioritytocreateavoluntarytaxcomplianceenvironmentratherthananenforcedcomplianceone,althoughbothareequallylegitimateandconvergentinthesensethattheytranslateintoasameattitude:abidingbythelaw.

3. Thetaxcultureisintegratedintoabroadernotion,thatoftax citizenship–whichspansthecorrectcompliancewithsuchobligations,fromthestandpointofrevenueaswellasgovernmentexpenditure-andrelatestotheothertwospheresofsocialvalues:thecultureoflegalityandthedevelopmentofcitizenship, that istosay,thedevelopmentofresponsiblecitizensthatexercisetheirrightsandmeettheirobligations.

4. TheTaxAdministrationshallconceivecivic-taxeducationaspartofitscorefunctions,sincethedevelopmentofataxcompliancecultureinthelong-termconstitutesoneofthestrongestandreliablebasesforcollection,bytakingtheformofaresponsibilityacceptedandsharedbycitizens.

5. Nothingadvances the taxculturebetter thananadequategovernmentexpenditure,sinceaccording to the reciprocity principle, the efficient, rational and transparent use of publicresources-bytransformingthemintogoodsandservicesforthecommongood-legitimatestheStatecollectionfunctionandmotivatessociety’svoluntarycompliancewithtaxobligations.

6. Thedevelopmentofthetaxcultureshallbedeemedasystematicandpermanentlong-termeffort,sustainedbyprinciples,gearedatthereinforcementofcivicvaluesand,consequently,focusedonpresentaswellasfuturetaxpayers(childrenandyouths),sinceitconstitutesonethebasestocreateandsustaindemocraticcitizenship.

7. Thetaxculturedevelopmentstrategyconstitutesatooltoharmonizetheethicandculturalvaluestocontributeinthepromotionofthecultureoflegality.

8. Theneedtoadoptstrategiestodevelopthetaxcultureisinverselyproportionaltothelevelofcompliancewithtaxresponsibilities.Evenso,countrieswithhighlevelsoftaxcompliancepromotetaxeducationaspartoftheschoolcurriculatoprepareforadultlife.

9. Thetaxcultureisfundamentallyaimedatinstillingbehaviorsinfavoroftaxcomplianceandagainsttaxfraud,byconveyingideasandvaluesthatmaybeinternalizedindividuallyandvaluedsocially.Thisentailsaculturalchangethatunderliesthelong-termconditionasoneofthefrequentandmostimportantfeaturesofanytaxculturedevelopmentstrategy.



10. Thereareno“recipes”fortheadoptionofstrategiesgearedatthedevelopmentofthetaxculture.Theyarerathertheinherentfeaturesineachcountry,aswellastheavailabilityofresourcesforeachTaxAdministration,whichultimatelydeterminethetypeandscopeofthepertinentinitiatives.ThemostimportantaspectisthateachTaxAdministrationclearlydefinesitstaxdevelopmentobjectivesandestablishesitsprioritiesaccordingtothemandtheresourcesavailable.

11. TheTaxAdministration is logically the largest stakeholder in the development of the taxculture,butthisdoesnotmakeittheonlyone.Theeducationadministrationandtherestofthegovernmentadministrationisalsopartoftheprocess,sinceitshallgenuinelytakethestatusofaStatepolicyratherthanagovernmentpolicy,ofanongoingprogramandnotacyclicalproject,withtheparticipationofthelocaladministrationsandothersectorsandcivilsocietyinstitutions.

12. Sincethetaxnormsshallconstituteapartofthesetofvaluesthateveryadultindividualmustassume,respectandprotectinademocraticsociety,childrenandyouths,totheextenttheyarefuturecitizensandtaxpayers,arethenaturalbeneficiariesofthetaxcultureprograms.Alsoincludedarethecurrent,effectiveandpotentialtaxpayersaswellasthestaffoftheTaxAdministrationandpublicservantsingeneral.

13. Thebackboneof thedevelopmentof thetaxculture iseducation in itsdifferentmodalities(formal,non-formalandinformal),sinceitrepresentsthemostinfluentialmeanstotransformindividuals’behaviorandideas.

14. Justlikeinthecaseofthedemocraticculture,theagendaofprinciplesandvaluesthatconstitutethetaxcultureshallbetaughtandlearned,sinceitentailsnotionsandfundamentalsthatarenotnatural,butcreatedbythepertinentsocietywhereindividualsliveandaccordingtothetypeofStateenvisioned.

15. Thetaxation-relatedvaluesarenot,perse,educationalcontents,buttheyconstitutethebasisfortheeducationstrategyandrequireacross-sectionalandongoingapproachintheoveralleducationalcurricula.

16. Taxeducationmaybynomeansbereducedtothedisseminationofpracticesthatonlyservetofulfilltherequirementsofthetaxsystem,which,althoughvital,aremechanicalandever-changingtasksintime.Neithershallitbelimitedtothescopeofthetaxformality,thelegalorderandthereasonsforcompliancetherewith,butitshallbe,necessarily,aneducationfocusedontheculturalchangeandtheprioritizationofethicsinthesocialconglomerate.

17. Althougheducation is by excellence the fertile ground for the tax culture –particularly forchildrenandyouths-,itseffectivenessisnormallysupplementedandenhancedbyinformationanddisseminationactions,byconventionalaswellasalternativemeansofcommunication.

18. Institutionalsupport,availabilityofappropriateresources,consciousassessmentandselectionoftheavailableoptions,theappropriateselectionofaudiences,clearandconsistentmessages,aswellastheconnectionsthatareestablishedwiththetargetgroups,arerelevantconditionstofurtheranytaxeducationstrategy,totheextenttheymaybedefiningforitseffectiveness.

19. Localexperiencesmayconstituteagoodbasistostarttaxcultureprojects,which,fromthemicroorlocalstandpoint,enabletobuildcasesofgoodpracticesontheissue.



20. The strategies for thedevelopment of the tax culture shall bemarkedby continuity in itsfurtherance,specificityinitsactions,socializationwithotherplayers,cross-sectionalinterventionintheeducationsystem,extensionintothegovernmentpublicagendaaswellasthemedia.Likewise,theymaybesupplementedandenhancedwithotherTaxAdministrationstrategies,suchasthoserelatedtotaxpayerassistance.



I. Overview.1.Legitimacy.2.Fairnessofthetaxsystem.3.Thevirtualcircleoftaxcomplianceandthevicious

circleoftaxevasion.4.Publicpowertochallengedecisions.5.CompetenciesandcredibilityoftheTaxAdministration

andthetaxpolicybodies.6.Expenditureoremploymentofrevenue.

II:BriefdescriptionofcertainSUNATproductsthatpromoteagreaterdegreeoflegitimacy.a)Virtualization.b)Taxbooths.c)Auditing,control,neutralityandriskmanagement.d)Long-termcultureandPeruGeneration.e)Transparency.

III.Casestudies:Dialogwithadvisorygroupsasaformofestablishingafeedbackchannelwithsociety

Social Legitimation of the Tax Policy and Culture

Clara Rossana ArteagaPeru

I. OVERVIEW

1. Legitimacy1:

Firstly,weshallbeawareofthefactthatthepoliciesthatseektoimprovethesociallegitimacyoftaxesmayrequireadministrativereformsthatgobeyondthescopeofthetaxadministration’sperformanceand,therefore,affectthepublicsectoringeneral–existenceofapublicadministrativecareer,stableandwell-remunerated;anindependenttaxadministration,withasufficientdegreeoflimiteddiscretionalpower;institutionalexpostcontrolsthatenablegovernmentofficialstoperformasfacilitators,etc-.

Thus,thesociallegitimationofthetaxpolicyandthetaxculturecouldfeatureallthedimensionscoverableinastudyofthepublicsectoroverall(includingthestructureandstrengtheningofinstitutions,aswellasthedemocraticmechanismsofsociety).Suchabroadscopeisnotthesubjectofthisdocument,andneitherisitrelevantthereto.Notwithstanding,thisnotionisworthremembering,since,legitimacyisnotatopicorataskthattheTaxAdministrationmaycovercompletelyorachieveonitsown;inotherwords,itshallinevitablyinvolvetheperformanceofanumberofactorsandtheneedofpoliticalwill,resources,andagoodandstrongguidance.

Inordertolegitimatetaxesandmotivatecitizens’voluntarycompliance,thelattershallperceivethatthetaxesestablishedarefairandmetbythetotalityoftaxpayersand,additionally,thattherevenueobtainedisemployedappropriately.Weshallbrieflyaddressthesenotions.

2. Fairness of the Tax System.

Thefirstvariablethatcontributestothesocialacceptanceoftaxesisthebroadconvictionregardingthefairnessoftaxes.Therefore,apreconditionforthesocialacceptanceofthetaxisthatcitizensperceivefairnessinthedesignofthetaxpolicy.2

Thefeaturesofthetaxstructuresinthecountriesstemfromthepoliticalandinstitutionalforcesdifficulttomodify.Theprobabilityofsuccessof theminimumandnecessaryconsensusunderlying the taxregulationsdepends,amongotherfactors,onpoliticalandsocialpressuresandrestrictionsfacedbytheStateintheefforttocollecttaxes.Therefore,minimumconsensusisrequiredaswellasdemocraticchannelsandinstrumentstoobtainfairoutcomesofthetaxpolicy.

Notwithstanding,taxesandtheformbywhichtheyarecollectedareperceivedbylargesectorsoftheworldpopulationasinequitableandcumbersome,withthebroadopinionthatthereismalfeasanceandinefficientuseofgovernmentresources.3

LatinAmericangovernmentsshallfosterlong-termtaxagreementsonthebasisofcertainpoliciesandstrategies.

From the procedural standpoint, theymay promote regulations and practices that improve fiscaltransparency;theyshallleadthediscussiononthetaxissues,forexample,bysupportingtheinstitutionswithpoliticalindependenceandtechnicalcapacitythatcontributeintheimprovementofthetaxdiscussionorfosterinnovativemodalitiesforthedirectparticipationofcitizensintaxdecisions.

Theelementsofataxsystemwithinademocraticsystem,bydefinition,arerepresentedinthewillofthemajority.Dependingonthefeaturesofthepoliticalprocess,thecreationofregulations–thetax

1 Legitimacy. 1. f. The quality of legitimate. Legitimate. 3. adj. Certain, genuine and truthful in any respect. DICTIONARY OF THE SPANISH LANGUAGE – Twenty-second Edition.

2 The Tax System and its Effect on.... p. 8.3 3. The Fiscal Agreements in Latin America. IDB. Research Department. Vol. 12, January-April 2007. p. 1.


82 TAXEDUCATIONClara Rossana Arteaga

policy-couldalsoadmitacertaindegreeofcitizens’intervention.Resortingtotheopinionofexperts,of the taxpayerswho shall bear the burdenand costs of taxation, discussingand listening to thestakeholders,helpsnotonlytodisseminatetaxregulationsinadvance4,butalsotointernalizetheneedoftheirenactmentandthefairnessandequityofthemeasures,strengtheningtheirsocialacceptance.

Fromthesubstantivestandpoint,thefairnessofthetaxpoliciesandthetaxsystemsisempoweredbyemphasizingthebalanceoftheprinciplesoftaxation–broadlyknownanddisseminated-incorporatedinthetaxpolicydiscussionandoutcome.

Efficiency.Theconceptofneutralityistiedtothenotionofefficiency,whicharisesfromtheoptimumallocationofresourcesviathemarket.Inorderfortaxationtobeneutral,itshalldistorttheallocationofresourcesviathemarkettotheminimumextentpossible.

Simplicity.Itentailsasmallnumberoftaxes,withhighyieldsandfewexemptionsandtheremovalofspecifictaxincentives.Thetaxsystemshouldfeaturelowcomplianceandadministrationcosts.

Flexibility.Itreferstotheadaptabilityofthetaxsysteminthefaceofchangesincircumstances.

Fairness.Equaltreatmenttothoseinsimilarcircumstancesanddifferenttreatmentforthoseinadifferentconditiontobeartheburdensimposedbytaxes.

Responsibility.Thetaxsystemshallbetransparentinordertogeneratethepolitical,administrativeandlegalresponsibilitiesofthemeasuresadopted.

3. The virtual circle of tax compliance and the vicious circle of tax evasion.

Anotherrequirement for thesocial legitimationof taxes is thatcitizensperceivethat themajorityoftaxpayersmeettheirtaxobligations.Whentaxevasionbecomespervasive,taxpayersfeellesscompelledtomeettheirtaxobligations.

Insocialpsychology,thebroadnotionexiststhatsubjectsobservethebehaviorofotherstodecidewhatisacceptable,reasonableorexpectedintheirsocialenvironment(CullisandLewis,1997).

SpicerandLundstedt(1976)provideeconometricevidencethatthenumberoftaxevadersknownforanindividualmakestaxevasionmorelikely,andalsodetectthatthefeelingofdiscomfortthatmakesanevaderactagainsthis/herprinciplesmaypsychologicallystimulateachangeintheindividual’sinherentoriginalbeliefs.

Inasignificantnumberofcountries,themajorityofcitizensfailtomeettheirlegalandtaxobligationsand,surprisingly,suchattitudedoesnotgeneratethesocialrejectionwewouldexpect.Insuchsocieties,inspiteofthepunitivelawsineffectthat,inmaycases,includebroadandmoderntypifications-evenofacriminalnature-theenforcementofsuchlegalpenaltiesandimprisonmentfortaxevasioncrimeshaveverylittleincidence,inotherwords,theyareuncommon.

Unfortunately,inPeruthereisstillahightolerancetowardstaxevasion.Effectively,although92%ofcitizensconsiderthatavoidingtheuseofpaymentreceiptsinordertoavoidtaxesisanactofcorruption,75%ofthepopulationfeaturesahighormediumtoleranceregardingthisbehaviorand,ingeneral,70%toleratestaxevasionifcertainthathe/sheshallbegounnoticed.5

4 Sevilla Segura, José. Tax Policy and Procedure. Institute for Tax Studies. Madrid. 2004. p. 165.5 PROÉTICA / CONFIEP and PUCP surveys.


83TAXEDUCATION Clara Rossana Arteaga

Literatureindicatesthatvoluntarycomplianceisaself-reinforcingvariable:thehigherthenumberofcomplying individuals, thegreater thenumberof individualswhodecide tocomply.6 This “virtuouscircle”isinverselyrelatedtothe“viciouscircle”oftaxevasion,accordingtowhichthelatterthrivesonfeedback,sincepersonalbehavioralsodependsonthedegreeofrespectforthesocialtraditionsandthedegreeofcoincidencewiththebehaviorofothertaxpayers–compliantindividualstendtobe“morehonest”,butalsotendtobelievethattaxevasionislessthancompliance-.7

This isafield inwhich there issupplementaryconcurrenceof thecoercion thatcompelsacertainnumberofsubjectstocomplyandtherewith,asabyproductorindirecteffect,thevoluntarycomplianceproducedinthosewhofollowtheexemplifyingbehavior,evenwhenithasbeeninduced.

4. Public power to challenge decisions.

Thepublicpowertochallengedecisionsisthepossibilityofchallengingthedecisionsontaxmattersandtheallocationofrevenueinpublichearings.Thepublicpowertochallengedecisionsisessentialforthecitizenstoperceivethetaxpolicyandtheoutcomesthereof,taxes,aslegitimate,inordertospurthehighestdegreeofvoluntarycompliancewithtaxobligations.Inturn,thepublicpowertochallengedecisionsdependson:8

Thevisibilityoftaxes.PropertyandincometaxesaremorevisibleorperceptibleforcitizensthanVAT,andthelatterismorevisiblethanthetaxesonproductionandforeigntrade.

Thesimplicityofthetaxsystem.Whenthetaxsystemismadeupbyrulesorregulationswithclearanddistinctmandates,theunderstandinganddiscussionofthetaxpoliciesbyexpertsaswellaslaymenisfacilitated,andtherefore,ultimately,voluntarycomplianceitself.Additionally,experienceindicatesthatthecostofadministratingatax,aswellasthepossibilitiesoftaxevasionandtaxavoidance,increasewiththecomplexityofthetax.9

The levelof consolidationof theavailabledemocraticmechanisms insocietyand the law isworthmentioning.

5. Competencies and credibility of the Tax Administration and the tax policy bodies.

AnotherrelevantfactororsourceoflegitimacyisbasedonthecredibilityintheleadershipoftheTaxAdministrationandtheotherbodiesinchargeofthetaxpolicydesignandformulation,humanresources’skills,qualityofserviceandtransparencyandaccountability.

Amongotherreasons,credibilityisbasedontheappropriateexercisebytheTaxAdministrationandthepublicinstancesdevotedtothetaxpolicyoftheirfunctionsorpowers,withfullrespectfortaxequity–thepublicadministrationloseslegitimacyifitspublicpowerisusedinequitablyandwithdisregardfortherightsofcitizensandtaxpayers10-.

Thetaxdebtors’perceptionoftheequityofthetaxadministrationandthetaxpolicybodiesintheexerciseoftheirfunctionsinfluencestheirwillingnessasregardscompliancewithtaxobligations.

6 Sevilla Segura, José. p. 166.7 The Tax System and its Effect... p. 12.8 The Fiscal Agreements in Latin America. IDB. Research Department. Vol. 12, January-April 2007. p.5.9 The Tax System and its Effect on... p. 3210 A survey on tax administrations in the OECD-member countries in 2004 indicated that two thirds featured formal statements that

specified the rights of taxpayers and the services to be expected from the Administration. Tax Administrations in OECD and Selected Non-OECD Countries: Comparative Information Series 2006 (February 2007). Prepared by Forum on Tax Administration. OECD. p. 48.



TheperformanceofthecompetenciesandtheservicesoftheTaxAdministrations,aswellasthepublicinstitutionsingeneral,takeupasignificantportionofthegovernmentbudgets.Society’sdemandforservicesincreases,while,ontheotherhand,theStateisfacedwithincreasinglygreaterbudgetaryrestrictions.Societyexpectsserviceswithgreatervalue,thatistosay,animprovementandalowercostthereof.ThedilemmaoftheStatesandtheTaxAdministrationstherein,iseithertoincreasetheproductivityandthequalityoftheirservices,orreducethem.ThepressureexertedontheStatesarisesfromthedemandforserviceswithbetterefficiency,efficacyandaccountability.

TheTaxAdministrationsandthetaxpolicybodiesthatdulyandequitablymeettheirbasicfunctionsofprovidingresources to theState, reducingcompliancecosts for taxdebtors11,contributing to thetaxbaseexpansion,combatingandreducingtaxevasion,increasingthetaxculture,winthetrustandcredibilityoftheirsubjects.

Additionally,thefunctionsandservicesundertakenbytheTaxAdministrationandthebodiesofthetaxpolicyshallbedeliveredbyofficialswhoshow:

a. Honesty:understoodasabehavioraccordingtoethicalnormsandprinciples,withoutpursuingpersonaladvantagesorbenefits.

b. Serviceculture:focusingactionsatknowing,satisfyingandexceedingtaxpayers,usersofforeigntrade andworkers’ expectations, assisting in facilitating tax compliance by simplification andguidance.

c. Excellence:willingnesstomakethegreatesteffort,obtainongoingbestresultsintime,achievingtaxpayers,usersof foreign tradeandworkers’satisfaction,with resourceefficiency,minimizingcostsandoptimizingthequalityofservices.

d. Innovation:capacityofmodifying thingsevenon thebasisofunprecedentedmethods.Guidingothersintheiractions,simplifyingproceduresandimprovingservices.

e. Integrity:understoodasthecapacityofbeingconsistentwithinstitutionalprinciplesandactions.Maintainingtheimageofgovernmentofficialevenbyensuringthatprivatelifeandbehaviordonotinterferewiththisresponsibility.

6. Expenditure or employment of revenue.

Anotherpreconditionforthesociallegitimationofthetaxpolicyandthetaxcultureistheroleplayedbythedisseminationoftherevenuebasisandtheknowledgeoftheappropriateallocationthereof.

Whenwerefertothesociallegitimationofthetaxpolicyandthetaxculture,fromthestandpointofgovernmentexpenditureandtheoperationoftheStatemechanism,ontheoneside,referenceismadetothehistoricexperiencesofcivildisobedienceasregardsthepaymentoftaxes.

Inthe1stcenturyofourera,theZealotswereaccusedofpromotingataxresistanceagainsttheRomans.JesushimselfwasaccusedofinstigatingataxresistanceagainstRomepriortohisprosecution.12

Overonecenturyago,agroupofnon-AnglicanBritishcitizensinitiatedalarge-scaletaxresistancecampaignagainstthesubsidiesgrantedbythegovernmenttoreligiousschools.

11 Almost all the OECD-member countries issue general rulings that are disclosed to the public and, upon taxpayers’ request, private rulings. In the last few years, the Nordic countries and Chile and Spain have issued pre-filled tax returns for taxpayers. Both experiences increase predictability, while reducing taxpayer compliance costs. Tax Administrations in OECD, p. 60 and 83.

12 “Then, the whole assembly of them arose and brought before him Pilate. They brought charges against him saying: “We found this man misleading our people; he opposes the payment of taxes to Caesar and

maintains that he is Christ, a king.” (Luke 23, 1-2).



In1964,singerJoanBaezmade taxresistanceanational issuewhenshepubliclyannouncedherdecisiontowithhold60%ofthetaxesshewasrequiredtopaythatwereallocatedtofundingtheVietnamWar.TheAmericanpacifistA.J.Muste–whoin1948foundedthetaxresistancegroupbythenameofPeacemakers-issuedaTaxResistancestatementthatwasendorsedbyBaez,pacifistDavidDellinger,poetLawrenceFerlinghetti,MITlinguistNoamChomsky,NobelPrizewinnerAlbertSzent-Gyorgyiandthousandsofothers.

Fortheopponentsofthetaxresistancetactics,civismandsocialethicsshouldleadthegoodcitizentosubjectiontothesovereigntyoftheliberalstatesandgovernmentsthatrepresentthemajorityofcitizens.Thegoodcitizen,asstated,13shouldcomplyandpromotethechangesviatheconstitutionallyadmittedmethods,andnotbymeansofcivildisobedience.

But, it isnotnecessarytogotoextremessuchasanti-war,religiousorconscientiousobjectionstoadmit the inappropriateallocationof therevenuecollectedandthe inefficientoperationof thestatemechanism,groundsthatmayreasonabledeprivethetaxpolicyandthetaxcultureoflegitimacyand,therefore,negativelyimpactvoluntarycompliancewithtaxes.

TheCommitteeonTaxationandCitizenshipestablishedbytheBritishFabianSocietyconcludedinitsfinalreportdeliveredintheyear2000thattheprevailingfeelingintheperceptionoftheBritishregardingthetaxsystemandpublicandstateserviceswasdescribedasa“disconnection”.14Suchdisconnectionreducesthepublicsupportofanytaxsystemandfosterstaxresistance,generatingafertilegroundfortaxevasionandtaxavoidance.

Presently, theState’s performance vis-à-vis taxmatters is under close scrutiny by thepopulation.AccordingtodatafromLatinbarometerfor2003,75%ofLatin-Americansconsiderthattaxesarenotusedefficiently;only31%issatisfiedwiththequalityofhealthservicesand51%withtheeducationtheyreceive.

Ontheotherhand,accordingtotheGlobalCompetitivenessReportfor2005,onascalefrom1to7,thebusinessmensurveyedconsiderthatthequalityofpublicschoolsscores2.5,thequalityofinfrastructure3.1andthequalityofgovernmentexpenditureoverall,2.6.15

Theextentbywhichtaxevasionandtaxavoidancemaybecome“intolerable”insocietydependstoacertaindegreeontheperceptionofthegovernmentadministration:thegreatertheweaknessesoftheinefficientgovernmentallocationofrevenue,thelesserthelosstiedtotaxevasion(CullisandJones,1998,p.208).

Thesocialexpenditurethatiseffectivelyallocatedandefficientlyimplementedisoneofthekeyinstrumentsofthetaxpolicytoimproveequityinthedistributionofincomeandmeetthebasicneeds.16Thesocialexpendituremayalsobearanegativeimpactontheeconomyandthewillingnesstowardsvoluntarycompliancewithtaxobligations,since,itmaygrantinappropriateincentivestotheeconomicagentsorotherwisebebadlyadministrated,contributingtotheimpairmentofthelegitimacyofthetaxinstrumentinbothassumptions,andimpactingtheperceptionthereofasaninstrumentoffairness.

13 The Ethics of Passive Resistance. Rev. J. G. James. International Journal of Ethics, 1904.14 Owing to the lack of knowledge regarding the tax system, the level of taxes in international comparative terms and of the purpose and

employment of resources, as well as the evidence of squandering and low quality of the public services rendered.15 Data taken from The Tax Agreements in Latin America. IDB. Research Department. Vol. 12, January-April 2007. p. 1.16 The Equity of the Tax Policy in Andean Countries. Andean Affairs Bulletins, May 2007, Andean Community p. 13.



II. BRIEF DESCRIPTION OF CERTAIN SUNAT PRODUCTS THAT PROMOTE A GREATER DEGREE OF LEGITIMACY

Wehave previouslymentioned the general idea that the policies that seek to improve the sociallegitimacyoftaxesrequireanendlessnumberofactionsthatexceedtheTaxAdministrations’merescopeofperformance.

Likewise,asregardsPeru,wehighlightedthehightolerancetowardstaxevasion:75%ofthepopulationfeaturesahighormediumtoleranceforthisbehaviorand,ingeneral,70%toleratestaxevasioniftheyfeelcertaintheyshallgounnoticed.

Nevertheless,thelatterdatadifferwithcitizens’perceptionoftheirnationaltaxadministration(SUNAT,asper theSpanishacronym)according to theoutcomesrenderedby thesurvey“TheGovernmentAdministrationinPeru(2007)”thatsetforththat76%ofthesurveyrespondentsthinkthatthecurrentSUNATperformanceispositiveforthecountry’sbusinessenvironment.

Ontheotherhand,56%ofthepopulationtruststheSUNAT17.Thispercentage,althoughsmall,hasbeenconsistentlyimprovingsincethesurveyswerestartedin2003.

Likewise,61.4%ofbusinessmentrustSUNAT18.

Consideringthesevariables,weshalldescribeaseriesofactionsthattheTaxAdministrationofPeruhasadopted,whichweconsiderhavehadandstillhaveanimpactinpromotingimprovementsofthesociallegitimacyofthetaxpolicyandthetaxculture.

a) Virtualization.Aswehavementionedbefore,thegoodperformanceofthetaxsystemsrequiresagooddegreeoftaxpayers’voluntarycomplianceandthisiseasiertoachievetotheextentthecompliancecostislowandtolerable.

Along such lines,SUNAThas undertaken a number ofmodifications of its processes in order tosystematizeasignificantpartof the interactionamong taxpayersandSUNAT, takingadvantageofinformationtechnologyasachanneltofacilitatecompliancewhileincreasingthetaxcontrollevel.19

Forsuchpurposes,SUNAThasidentifiedthestepsorformalitiesrequiredfromataxpayerintheidealbusinesslifecycle,startingwithregistrationintheSingleTaxpayers’Registry,compliancewithmonthlyobligations,authorizationtoprintpaymentreceiptsandtheeventualtransactionsregardingthechangesintheinformationprovidedbythetaxpayeratthetimeofregistration.

17 Information from the IV Annual survey on trust in the institutions – Metropolitan Lima and Callao, conducted in October 2007 by the Public Opinion Group of the University of Lima.

18 Information from the VIII Annual survey for business leaders on the economic and business situation in Peru – conducted in October 2007 by the Public Opinion Group of the University of Lima, with the samples taken from Board Chairmen of the top 1,000 companies in the country during 2006, according to the ranking developed by Peru: The top 10,000 companies. Peru Top Publications. Lima. 2007.

19 Facilitation shall not be deemed lack of control. In fact, it refers to controlling to the same extent or even more strictly, but with alternative tools that are friendlier and more cost-effective, whether because they generated savings for the taxpayer (lower compliance costs) or for the Tax Administration (lower administration costs).



1.Registration:

a. RegistrationofindividualsviatheInternet,b. ModificationofthedataontheSingleTaxpayers’Registry(RUC,aspertheSpanishacronym)via

theInternet(individualsandcorporations),c. Likewise,aprojectisunderwayfortheintegrationwithnotariesandpublicregistries,inorderto

simplifytheregistrationofcorporationsintheRUC,inordertoeliminatesuchstep.Thisprojectshouldbeimplementedinthefirstsemesterofthisyear.

2.Taxstatementandpayment:

a.FilingtaxstatementscompletedwiththeElectronicFilingSystem(PDT,aspertheSpanishacronym),asoftwarecreatedbySUNAT,availablefreeofchargefortaxpayers,viatheInternet,b.PaymentoftaxstatementsviatheInternet,againstapredefinedaccountorwithcreditordebitcard,c.Filingrequeststostopincometaxwithholdingsforself-employedindividualsviatheInternet,d.Paymentofcollectiondocumentsissuedbytheadministration,e.Filingrefinancingrequestsfortaxdebts;thisincludesmonitoringandpre-rating.

3.Paymentreceipts:

Presently, theauthorization toprintpayment receiptsdoesnotentailanadditional formality for thetaxpayer,sinceforanumberofyearsthisprocedurehasbeenperformeddirectlyintheauthorizedprintinghouseselectedbythetaxpayerforsuchpurpose.Inthisrespect,almost100%oftheauthorizationsareperformedwiththevirtualoptionsenabledbySUNAT.

At thesametime,SUNAThasbeendevelopingaproject for theelectronic issuanceofreceipts forprofessionalfeesandelectronicinvoicing,whichshallbephasedinduringthefirstsemesterof2008.

Itisworthmentioningthatinordertoaccessvirtualformalities,theadministrationgrantsthetaxpayeranaccesscodeforthesecureSUNATVirtualOnlineOperations(SOL,aspertheSpanishacronym),whichiscalledSOLCode,freeofcharge.Presently,over2milliontaxpayersrelyonthiscodethatisdeliveredinpersonemployingsimilarsecuritylevelstothoseofabankinginstitutionindeliveringaccountorcreditcardcodes.

4.Accounting:

Theprojectfortheelectronicreceiptsforprofessionalfeesforeseestheautomatedgenerationoftheincomeandexpensesbooksubsequently,whichshallbeavailableonSUNAT’sInternetportal.



5.Others:

Implementationofportals forspecificsegments,withad-hoc informationaccording to the taxpayeruniverse,inasimpleandclearlanguage.Weplantoimplement3portals:forsmallandmedium-sizedtaxpayers,forforeigninvestors(includinginformationinEnglish)andforself-employedworkers.

Outcomes:

Hereunder,wepresentfiguresonthenumberofformalitiesprocessedin2007,andmonthlyandannualtaxstatementsandpayments.Itisworthmentioningthatinthecaseofthemonthlystatementsandpayments,91%aresubmittedwithoutaform,whetherviathePDTorEasyPaymentsystem(bywhichthetaxpayerdeliversinformationtothebanktellerverballytomakethestatementand/orpayment,andthelattervalidatestheinformation)and9%viaaphysicalmedium.



b) Tax booths.

SUNAT,inordertofulfillitscollectionfunctions,hasbeenimplementinganumberofelectronicsolutionsthatrequiretaxpayers’intensiveuseofInformationandCommunicationsTechnologies(ICT),inordertofacilitatetheircomplianceandoptimizetheaccesstotheirinformation.Underthisframework,ithasenabledInternet-basedtaxstatementssincetheendof2003.

Nevertheless,thistechnologicaladvancefacedanimportantchallenge:inourcountrythedigitalgapisverybroad,understoodasthelackofaccessofthemajorityofthepopulationtotheInformationandCommunicationsTechnologies.Currently,two-thirdsofthecitizensthataccesstheInternetareindividualsfromSocioeconomicLevelsC,DandE,andonly14%hasanInternetconnectionathome,outofwhichapproximately44%isagedbetween18and35.Likewise,thechiefindicatorsoftheuseofICTsinLatinAmericastatedthatPeruwasamongthecountrieswiththepooresttechnologicalinfrastructureintheregion,mostlyregardingPCsandtelephonelinesthatfacilitateaccesstotheInternet.Inparticular,SUNAThadafewPCforpublicusetoenabletaxpayerstocompletetheElectronicStatementProgram(PDT,aspertheSpanishacronym),butsaiddeviceswerenotconnectedtotheIntranetandhadnoInternetaccess.

ConsideringthatthemajorityofthepopulationhadnoPCsathomeandtheimportanceoftheInternetconnectioninordertoaccesselectronicservices,SUNATimplementedtheTaxBoothsintheirTaxpayerServiceCenters,whichareavailableforcitizensnationwide.

Withaviewtofacingthedigitalgap,SUNATcreatedamodelboothwithinfrastructureandequipment(PCsandprinters)toprovideaccesstotheirvirtualizedservices,designingandimplementingasecureaccesssystem, freeofcharge, tosaid technology in themajorityof theTaxpayerServiceCentersnationwide.Thismodelisdescribedhereunder:

1. WehavetakenadvantageoftheITequipmentavailablefromthereplacementoftechnologyofinternalSUNATusers,whichwereoperationalandfittobeusedinthebooths.

2. WeusedtheexistentinfrastructureintheTaxpayers’ServiceCenters,whichrequiredtheinstallationofmodulesforthebooths.

3. Opensourcesoftwarewasemployedtotheextentpossible.4. InordernottoaffecttheexistingsecuritylevelsandmainlytoavoidjeopardizingtheSUNATIntranet,

weinstalledaparallelnetworktotheoneintheTaxpayers’ServiceCenters.Thisentailedsavingsincertaintypesofexistingequipment.



5. Inordertoavoidthemisuseofthebooths,wehaverestrictedaccesstotheWebsitesthatareunrelatedtotaxissuesandlikewise,assignedstafffordirectassistancetotheusersofthebooths,whoalsocontrolthem.

Theoutcomesareveryencouraging.

o Asoftheyear2007,wehaveimplemented51TaxBoothsindifferentinstitutionalbranches,wherewehaveinstalledover250PCsandassistanceisprovidedtotaxpayersasregardstheuseofthevirtualservices.Thishasenabledtogreatlyexceed2millionusersassistedviathistool.

o Conservativefigures20indicatethattheimplementationoftheboothshassavedtaxpayersinexcessofS/.1million(approximatelyUS$330thousand)inPCrentalsforpublicbooths.

o TheTaxBoothsofferapersonalizedassistanceserviceontheuseofthevirtualSUNATproducts,freeofcharge,alsocontributingtopreparethecitizen,sothat,whenhe/shereliesonaconnectionofhis/herown,he/shemaycompleteprocedureswithoutdifficulties.

o Themodelappliedissimplebuthighlyreliable,whichmakesiteasytoreplicateandcouldserveasanexampleforotherinstitutionsthatdecidetoprovideaccesstotheirusers.

In this regards, itworthmentioning that thereplicationeffortshavebeenalreadyproven,since theAccountants’AssociationofLimaisfacilitatingthetemporarysetupofourTaxBoothsintheiroffices,duringtheIncomeTaxreturnssubmittalperiodforthefiscalyear.

Also, SUNATwon theAPEC contest-DigitalOpportunityCenter 2006 (Asia - PacificEconomicCooperation)inthedigitalgapcategory,withtheTaxBoothsproduct,presentedunderthenameofTaxpayers’InternetBooth.

c) Auditing, control, neutrality and risk management.

Theeffectiveburdenofthetaxsystemontaxpayersdependsnotonlyonthosewhoareinchargeoflegislatingontaxmatters,butalsoonthosewhoadministratethemandthewayinwhichtheydoso.21Insuchregard,thecontrolstrategyisnotonlyrelevantperseinordertoachievethetaxadministration’sstrategic objectives, but itmay also becomea hurdle to achieve a higher objective such as theimprovementoftaxawarenessandtheresultingvoluntarycompliance.

Onthebasisofthisscenario,theselectioncriteriafortaxpayerstobeaudited,aswellastheformandfocusofsuchaudits,maysignificantlyinfluencecitizens’perceptionregardingthedegreeofequityofthetaxsystem.Inotherwords,themorearbitrarytheselectionofthetaxpayersorthegreaterdisparityintheformsofcontrollingtaxpayersofdifferent“size”,thegreatertheperceptionofinequityamongtaxpayers,whichimpactsthelegitimacyofthetaxsystemandconsequently,fosterstaxnoncompliance(viataxavoidanceortaxevasion).

TheRiskManagementcriteriaapply in thisscenario.This typeofanalysis isbroadlyknownand isgearedatpromotingtaxpayers’voluntarycompliancebymeansoftwochannels:

1. Ontheonehand,itseekstorationalizetheauditingactionssotheyaregearedatthesegmentsoftaxpayerswithagreaternoncompliancerisk,oralternatively,wherethemultiplyingeffectineachauditingactionismaximized.

20 Calculations assume that taxpayers take half an hour to complete their statement and the cost of renting a PC in an Internet booth for that amount of time is approximately S/. 0.5 or US$ 0.17.

21 Scotchmer, 1992.



Therefore, selection isbasedon the intelligentuseof the information from internal sourcesaswellasthird-parties,thuscomparingthetruthfulnessandaccuracyofthestatementsdeliveredbytaxpayerswhiletakingincreasingadvantageofthenewtechnologicalfacilities.

2. Additionally,theallocationshouldbecost-effective,inordertostrikeabalancebetweentheauditcoverageanddepth,consideringthatTaxAdministrationsrelyonlimitedresources.

Thus,theperformanceofin-depthandlong-termauditsshallbereservedforveryspecialcases,inwhichtheamountsinvolvedandthemodalitiesoftaxavoidanceortaxevasionaremoresophisticated.Atthesametime,intermediatescopecontrolsareappliedonspecifictaxpayers’segments(accordingtotheireconomicsector,size,geographiclocation,marketandothers)and,also,alargenumberofmassauditsareconductedexpeditiouslyandatalowcostinordertomaintaintheperceptionofriskinthelargestgroupsoftaxpayers.

Inthisregard,riskmanagementnotonlyenablesamoreeffectiveandefficientperformanceofthetaxadministration,butisalsothekeyelementtoreflectagreaterequityofthetaxsystemandsupporttheongoingeffortstogenerateastrongtaxawarenessintime.

d) Long-term culture and Peru Generation.

ItisclearthatlegitimacymaynotexistwithoutpriorknowledgeoftheroleoftheStateandoftaxes.

Thisentails theneed todevelopa taxculture in thepopulation, inorder for thecitizen tobecomeawareoftheneedandbenefitofpayingtaxesandforsakethetolerancetowardstaxevasionandtaxavoidance.Evidently,sucheffortshallbesuccessfulonlyifitgoeshandinhandwithasustainedefforttomaketheStateperformancemoretransparentandefficient,sothatthepaymentoftaxesmaybejustifiedastheconditionthatenablestorelyonastatemechanismthatdulyseestocitizens’demandsandneeds.Thus,theefforttowardstheTaxReformshallgoinevitablyhandinhandwithacalltotheState’smodernizationandstrengthening.

SUNAThasdeemedthecreationoftaxawarenessasoneofitsstrategicinstitutionalobjectivesforthe2007-2011periods,withthepurposeofreducingtolerancetowardstaxevasionandtaxfraudbystrengtheningcivicvalues.

In such regard, although theactivities related to tax education inSUNATdateback to 1993, theybecomeespeciallyrelevantin2007withthelaunchingoftheGenerationPeruProject,whichseekstogeneratestrongervaluesamongcitizensandgreatersocialcohesionandeconomiccompetitivenessonthebasisoftwocomponents:Thecivicvalues’component(includingtaxawareness)includesaTaxCultureandAwarenessProgram.

Thisprograminitiallyseekstoinstillcivicvaluesinchildren,andpromotetherejectionoftaxevasionandcontrabandinyoungindividuals.Likewise,itpromotestaxcomplianceforcitizensoverall.

Asregardsprofessors,thecurriculumhasbeenmodified,introducinga120-hourcoursecertifiedbytheMinistryofEducationofPeru,whichincludestaxcontentsandprovidestoolstofacilitatetheeducationalworkoverall,notonlywithregardstotaxmatters.Theprogram’sgoalistogenerate10thousandtrainedprofessorsby2011.

Ontheotherhand,studentsreceivethiscontentbymeansofplays,puppets,games,didacticmaterial,illustratedbooks,fairs,andothers.Obviously,thecontentsshallbeadaptedtostudents’ageanduntil



2011weplantoinvolve120thousandkindergartenandelementaryschoolstudents(agesbetween5and12)and80thousandhighschoolstudents(agesbetween12and17)22.

Itisworthunderliningthatforthisaudience,wehaverecentlylaunchedthecharacterbythenameofAyni(asmallHumboldtpenguin),whosenamemeans“collaborativework”inQuechua.AynihasthemissionofpromotingvaluesinchildrentogetherwithMateoandClarita.

Asregardshighereducation,weperiodicallyholdseminars,universitymeetings,essaycontestsandcoursesfortheschoolsofeducation,law,administration,accountingandeconomics,amongothers.Thegoalinthissegmentistoreach40thousandyoungstudentsbytheyear2011.

Finally,therestofthepopulationiscoveredviashortradiobroadcasts,newspaperarticles,participationinfairs,plays,virtualcontestsandothersimilarinitiatives.

Asregardscompetitiveness,theProgramtoImproveEntrepreneurs’Skillshasbeenestablished.

ThisprogramseekstoovercomepartofthelimitationsfacedbysmallentrepreneursinPeru.Amongthem,wemaymentiontheloweducationallevel,thecultureofinformality,thelackofmanagementandaccountingskills,lagintheadoptionoftechnology,inadequatemarketinsertion,highcostofaccesstocredit,amongothers;whichentaillowproductivityandcompetitiveness,informality,lowerprofitability,andgreatermortality.

Theprogramhas foreseenemploying young students as amechanism to convey knowledgeanddevelopment.Therefore,thisimpactsnotonlythebusinessventurebuttheyoungindividualhim/herself,enablingbettertrainingandtheopportunityofquicklygainingworkingexperience.

Forsuchpurpose,theStatehasopenedaselectionprocessforonethousandyoungstudentsfromStateuniversitiesinthelastcoursesoftheircareersinorderforthemtoattendanextensivecourseonbusinessissues(amongwhichthetaxissueisanimportantbutnotexclusivecomponent).Uponconcludingthecourse,participantsshallbeinvitedtovisitapproximately10thousandsmallbusinessestoassistandconveyknowledgeinthecourseofayear.

Atthispoint,itshouldbementionedthatprofessorsshallpermanentlymonitorandassisttheyoungstudentsofthecourseandtheyshallbecomethelinkbetweentheentrepreneurandthespecialistsfrommultiplestateentities.

Itisalsoworthnotingthatthecourseaswellasparticipants’remunerationduringthecourseandfortheiryearasassistantssubsequently,shallbeassumedbytheState.

Asitstemsfromthediscussionatthebeginningofthisdocument,GenerationPeruisaprojectaimedatsettingthegroundworkforlong-termlegitimacy,competitivenessandsocialcohesionandinsuchregard,theoutcomeofgreatertaxcomplianceisonlyoneofitsresults.

e) Transparency.

AfterassertingthattheStateplaysasocialrole, it isnecessarytoemphasizethat–at least inthedemocraticstates–suchfunctionentailscommitmentswiththecitizenryandoneofitschiefcommitmentsisrelatedtoaccountabilityandtransparencyintheaccesstopublicinformation.Ineffect,relyingonpublicinformationthatobjectivelyanswersthequestionsongovernmentexpenditurecosting,financing,

22 The initiatives described are based on two criteria: • Students and teachers are the key players in the educational process. • The school system and extra-curricular activities are the environments in which the socialization processes occur.



thebeneficiariesthereof(andthosewhodonotbenefit),itsdistribution,andtheevaluationofthequalityoftheservicerenderedareextremelyrelevantforcitizenssincetransparencyenablesthediscussionofthegovernmentactsandalso,detersofficialsfrombehavinginappropriately.

InPeru, themain tool isprovidedby thePublic InformationTransparencyandAccessAct-ActN°27806.ThisistheregulationunderwhichSUNATprovidesnumerousmeanstoaccessinformationtothegeneralpublic:

1. SUNAT’sWebportalfeaturesasectiononthetransparencyoftheinstitutionalperformance23andpresentsupdatedinformationontopicssuchasinstitutionalplanning,periodicalperformancereportssince2001,institutionalbudget,purchasesandcontracts,agreementsonperformanceoutcomessignedwiththeMinistryofEconomyandFinanceofPeru,humanresources’information,queriesonthegoods’allocationresolutions,activitiesofofficialsandprovisionsonthediscipline,rationalityandausterityofexpenditure.

Onthispoint,thedegreeoftransparencyreachedatthelevelofforeigntradetransactions24isworthhighlightingsincetheSUNATWebpagenotonlyenablestoobtaininformationontherankingofforeigntradeoperators,detailedstatisticalannualreportssince1999andmonthlystatistics’bulletins,butalso,downloaddetailedinformationoneachexportorimporttransactionandevendrilled-downinformationonthebasisofcriteriasuchastariffitem,countryorimportorexportsystem.25

2. Likewise,werelyontheTaxNote,aninstitutionalmonthlydocumentgearedatcitizenswhowishtoobtainmonthlydetailedandupdatedstatisticalinformation.Currently,theTaxNoteincludes45statisticalcharts.

TheTaxNoteisreleasedinprintedaswellasvirtualformat.Inthecaseofthevirtualedition,theinformationspansmonthlyserieswithinformationdatingback10years26andtextsforanalysismaybedownloadedfromtheSUNATWebpageinMicrosoftWordorAdobeAcrobatformat.Also,allthestatisticalchartsdetailedmaybedownloadedintheMicrosoftExcelformat.

3. Finally,wealsorelyonquerymechanismsthatareactivatedbythesubmittalofFormN°5030“PUBLICINFORMATIONACCESSREQUEST”,whichmaybefiledviathehelpdeskorsentviatheInternet27.

It should bementioned in this regard that in 2007we received14,365 requests for access toinformationandbyJanuary2008,92.4%hadbeenprocessed.Thefollowingchartshowsthenumberofrequestsreceivedaccordingtothetypeofinformationrequired.Asitmaybeobserved,mostoftherequestsforinformationcomefromthePeruvianJudiciary,individualsandtheNationalPoliceforce.

23 www.sunat.gob.pe/gestionTransparente.24 www.aduanet.gob.pe/aduanas/informae/estadisticasComExt.25 Once the query is forwarded, it is centrally processed by SUNAT and the flat file with the information is posted on the institutional Web

page (in a ZIP file) with a request identification number for it to be downloaded by the person who entered the query.26 The date of each series depends on the date on which it was incorporated into the Tax Note. Additionally, citizens may request older

information.27 Form 5030 enables the requesting party to follow the request submitted.



Typeofinformationrequested

Numberofrequests

processedandnotprocessed

%Incidenceoverthe

totalnumberofrequests

Numberofrequestsprocessed

%processedNumberofrequestsnotprocessed

%Unattended

InformationrequestedbytheJudiciary 7283 50.70%6 805 47.37% 4783 .33%

InformationrequestedbytheAttorneyGeneral’sOffice 9686 .74% 8445 .88% 1240 .86%

InformationrequestedbytheNationalPoliceForce 1990 13.85%1 8081 2.59% 1821 .27%

InformationrequestedbytheProsecutor’sOffice 84 0.58% 84 0.58% 00 .00%

Informationrequestedbygovernmentoffices(ministries,publicbodies,etc.) 9326 .49% 8676 .04% 65 0.45%

InformationrequestedbyprivateInstitutionsandcorporations 6814 .74% 6624 .61% 19 0.13%

Informationrequestedbyindividuals 2404 16.74% 2185 15.21% 2191 .52%

Other2 30 .16% 22 0.15%1 0.01%Total1 4365 100.00%1 3277 92.43% 1088 7.57%

FORM N° 5A. TYPE OF INFORMATION REQUESTED

III CASE STUDIES: DIALOG WITH ADVISORY GROUPS AS A FORM OF ESTABLISHING A FEEDBACK CHANNEL WITH SOCIETY.

TheSuperintendencyofTaxAdministrationdecided to implementadialogandmutualcooperationinstancebetweentheinstitutionandthetaxpayersrepresentedbythebusinessassociations,involvingthemasalliesinthecampaigntodisseminatetheneedtostrengthencompliancewithtaxobligations.Thus,SUNATundertookanewparticipativemanagementinitiativeinordertominimizetheconflictsandtensionsinherentintheState-Citizenryrelation,suchastheoneexistingbetweentheregulatorysimplificationwillandtheneedtocontrolthetaxnorms,inanenvironmentofgreateconomicandsocialcomplexity.

Theoutcomehasbeenagreaterconsensusandadhesionregardingtheenforcementandcomplianceof thetaxobligationsbybusinessmenandmoreopennessandflexibilitybytheTaxAdministration;thisentailsagreaterperceptionoflegitimacybycitizens.Practicehasenabledtaxpayerstorelyonsimpleproceduresthatreducetaxcompliancecosts,participateinthedevelopmentoftheproductsandservicesdesignedbySUNAT,aswellasinthetaxdisseminationtasks.Overall,amoreefficientperformanceoftheadministrationonthebasisofmoreappropriateprocedurestothebenefitoftaxpayers.It isworthmentioningthatthisproducthasbeenconsideredbythe“Ciudadanosaldía”(CompliantCitizens)28association as a “goodgovernment practice” in the sphere of citizens’ consultation andparticipation;in2007,itwasfinalistintheannualawardinthiscategory.

28 www.ciudadanosaldia.org: “Ciudadanos al Día” is a private non-profit organization made up by a group of professionals from different areas with experience in the public administration. It was created with the purpose of generating incentives and new tools that enable to improve the quality of government performance on the basis of transparency of the information, citizen participation and monitoring, and the rendering of citizen-centered services. It also pursues the promotion of citizen consensus on the topics on which different views converge regarding the solution of the most important issues in the country.



1. Context and diagnosis:

Sincethebeginningofthisdecade,SUNAThasapprovedanumberofregulatoryprovisionsgearedat combating taxevasion, broadening the taxbaseand, consequently, increasing collection.Suchmeasureshavecontributedingrowingthetaxpressureto15.6%ofGDPin2006,thehighestlevelinthelast27years(1980).

ForSUNAT,this increaseinthetaxpressureentailsprovidingmorerevenuetotheStateso itmayachieveitsgoals.Nevertheless,theinstitutionhasbecomeincreasinglyawarethatasataxcollectionentity,itrequiresnotonlyaninstitutional,legalandformalbasis,butalsothelegitimacythatpromotescitizens’compliancewithsuchobligation.Therefore,wedeemitisourdutytopromoteincreasingeffortstoapproachoursubjects.

Therefore,inNovember2004,SUNATorganizedaforeigntrademeeting29andinthecourseofthismeeting,asetofcommonissuesfortaxpayersandusersofforeigntradetransactionswererevealed,whichcalledforaconcreteactionbytheTaxAdministration.

Atthetime,SUNATlackedtheappropriatechannelstoinformsocietyregardingthegroundsforthemeasuresandactionsadopted,aswellastheiradequacyto improvethecountry’smacroeconomicstabilityandtheeffortstocounterunfaircompetition.Likewise,wewereawareofasetofprocessesthatrequiredongoingimprovements,butalsothattheybeappropriatelyidentifiedandprioritizedaccordingtocitizens’needsandexpectations.

Inthefaceofsuchsituation,SUNATdecidedtoimplementadialogandmutualcooperationinstancebetweenSUNATandtaxpayersrepresentedbyanumberofassociations,mainlyofthebusinesssector.Therefore,SUNATpursuedanewmethodofparticipativemanagementtoachievegreaterlegitimacyinitsactionsandalliesforthegrowthofthecountry.

2. Objectives.

Themainobjectiveofthemethodimplementedistosustainandimproveapermanentcommunicationchannelwithsocietyviathetradeassociations,whichenableto legitimateSUNATactionsasataxcollectionagencyandfacilitatorofforeigntrade30.

Thefollowingaredeemedancillaryobjectives:

o Learnabouttheneedsandexpectationsofsociety.o Providesolutionsforadministrativeissuesofgeneralinterest.o Implementfeasibleinitiativesthatfacilitatevoluntarycompliancewithtaxandcustomsobligations.o Facilitateforeigntrade.o Coordinateactionstocontributetothecreationoftaxawareness.

3. Implementation:

Thefollowingactivitiesweredevelopedfortheimplementationofthemethod:

29 It is worth remembering that in the case of Peru, the administration of internal taxes and customs duties is the responsibility of the National Tax Administration Superintendency– SUNAT.

30 SUNAT deems the foreign trade facilitation component of great relevance; to the extent it is included in the institutional mission statement.



a. Planning process,whichdefinedthemethodologyandthemeasuresrequiredforthesuccessofthepractice.Thefollowingactionswereundertakeninthisprocess:

o CreationoftwoWorkingGroups,oneforcustomsdutiesandtheotherforinternaltaxes.o CreationofaTechnicalSecretariat foreachWorkingGroup,whichprovides technicalsupport,

performscoordinationworkpriortoeachmeeting,draftstheminutesforthemeetingsandinternallymonitorscompliancewiththeagreementsadopted.

o DefiningtheWorkingGroups’objectives.o DesigningtheinternalorganizationstructureforeachWorkingGroup.o Identifyingthecounterpartsineachworkinggroup.Forsuchpurpose,invitationswereextended

tothemostrepresentativetradeassociationsfromalltheeconomicsectorsinthecaseofInternalTaxes;forCustoms,weinvitedtheassociationsthatparticipateinthedifferentstagesoftheforeigntradeprocess.

o AdoptionofmonthlymeetingsfortheWorkingGroups.o Defining the implementation andworkingmethod of the technical teamsorworking sessions

accordingtothetopicunderdiscussion,aswellasthefrequencyoftheirmeetings.Accordingtotherelevanttopic,SUNATdesignatedprofessionalsfromeachNationalIntendancyinvolvedintheprocess.Likewise,thetradeassociationsappointedtheirrepresentatives.

o Definingthemethodtoaddressthetopicsthatdonotrequireaworkinggroup.o Disseminationofthejointworkingpracticewiththetradeassociationswithintheinstitutioninorder

toobtainthecommitmentofthedifferentresponsibleinstancesand,thus,achievetheeffectiveallocationofresourcesfortheimplementationthereof.

b.Creatingthe general frameworkfortheinteractionandobjectivesineachworkinggroup:

Inordertoensuretheproductivityoftheexchange,itisnecessarytodefineitscontentinadvance.

Amongthemostrelevanttasksofthecustomsgroup,wemaymentiontheidentificationoftheissuesarising from theconstrual of regulationsandcustomsprocedures, aswell as theassessmentandrecommendationofmechanismsthatexpeditesuchproceduresandthepresentationofinitiativestoimprovethelegislationineffect.Onsuchbasis,wearemeetingtheprovisionsintheGeneralCustomsAct,whichsetsforththattheStateshallpromotetheparticipationoftheeconomicagentsandforeigntradeoperatorsincustomsservices.

Ontheotherhand,theInternalTaxes’WorkingGroupisinchargeofevaluatingtheinitiativessetforthbytherepresentatives,aswellasworkingtogethertomodernize,simplifyandfacilitatecompliancewithtaxobligations.

c.Terms.

Theplanningstage,oncethedecisiontosetuptheWorkingGroupshadbeenmade,tookapproximatelytwomonths,andmainlyinvolved:

o AppointmentoftheTechnicalSecretary,o IdentificationoftheWorkingGroups’objectives.o Internalorganizationdesign.o Definitionofparticipants.o InternalidentificationofproposalstobesubmittedtotheWorkingGroup.



d.Counterparts and allies:

Presently,advisorygroupsinvolvethemainbusinessandproductivetradeassociationsofPeru.Insuchrespect,thetrendforeseenistograduallyextendthepracticetowardsothergroups,alwaysinlinewiththestricttechnicalnatureofthecontents.

TheAdvisoryGrouponCustoms issuesismadeupbytherepresentativesofthefollowinginstitutions:

o NationalSuperintendencyofTaxAdministration(SUNAT,aspertheSpanishacronym),o MinistryofForeignTradeandTourism(MINCETUR,aspertheSpanishacronym),o NationalAgriculturalHealthService(SENASA,aspertheSpanishacronym),o MinistryofEconomyandFinance(MEF,aspertheSpanishacronym),o CustomsAgents’AssociationofPeru(AAAP,aspertheSpanishacronym),o Exporters’AssociationofPeru(ADEX,aspertheSpanishacronym),o TheInternationalAirCargoAssociation(TIACA),o InternationalCargoAgents’Association(APACIT,aspertheSpanishacronym),o MaritimeAgents’Association(APAM,aspertheSpanishacronym),o AssociationofCourierServices’Businesses(APESE,aspertheSpanishacronym),o PrivateAirportServices’Association(ASAEP,aspertheSpanishacronym),o MaritimeAssociationofPeru(ASMARPE,aspertheSpanishacronym),o PeruvianAssociationofPortOperators(ASPPOR,aspertheSpanishacronym),o AssociationofWarehouseTerminalsofPeru(ATAP,aspertheSpanishacronym),o ForeignTradeSocietyofPeru(COMEXPERU,aspertheSpanishacronym),o NationalSocietyofIndustries(SIN,aspertheSpanishacronym),o NationalMiningandOilSociety(SNMP,aspertheSpanishacronym),o NationalFisheries’Society(SNP,aspertheSpanishacronym),o ChamberofCommerceofLima(CCL,aspertheSpanishacronym),o NationalChamberofCommerce,ProductionandServices(PERUCAMARAS,aspertheSpanish

acronym),o NationalCouncilofUsersoftheInternationalPhysicalDistributionSystem(CONUDFI,asperthe

Spanishacronym).

Additionally,theAdvisoryGrouponInternal Taxesismadeupbytherepresentativesofthefollowinginstitutions:

o NationalSuperintendencyofTaxAdministration(SUNAT,aspertheSpanishacronym),o MinistryofEconomyandFinance(MEF,aspertheSpanishacronym),o NationalConfederationofPrivateBusinessInstitutions(CONFIEP,aspertheSpanishacronym),o NationalFisheries’Society(SNP,aspertheSpanishacronym),o ChamberofCommerceofLima(CCL,aspertheSpanishacronym),o AssociationofExporters(ADEX,aspertheSpanishacronym),o NationalChamberofCommerce,ProductionandServices(PERUCAMARAS,aspertheSpanish

acronym),o NationalSocietyofIndustries(SIN,aspertheSpanishacronym),o AssociationofBankingInstitutions(ASBANC,aspertheSpanishacronym),o ForeignTradeSocietyofPeru(COMEXPERU,aspertheSpanishacronym),o NationalMiningandOilSociety(SNMP,aspertheSpanishacronym), Additionally,theSUNATreliesonalliesinthisinitiative,sincewehaveworkedincollaborationwith

differentpublicandprivateentitiesthathaveenabledtheimplementationoftheproductsarisingfromtheworkinggroups.Amongthem,wemaylist:

o MinistryofEconomyandFinance-(MEF,aspertheSpanishacronym),o ElectronicGovernmentOffice(ONGEI,aspertheSpanishacronym),



o GovernmentAccountant’sOffice,o MinistryofLaborandSocialDevelopment-(MINTRA,aspertheSpanishacronym),o National Institute ofDefenseof IntellectualPropertyRights – (INDECOPI, as per theSpanish

acronym),o MinistryofTransportationandCommunications-(MTC,aspertheSpanishacronym),o MinistryofForeignTradeandTourism–(MINCETUR,aspertheSpanishacronym),o BancodelaNación–(BN,aspertheSpanishacronym),o NationalRegistryofIdentityandMaritalStatus-(RENIEC,aspertheSpanishacronym),o NationalSuperintendencyofPublicRegistries–(SUNARP,aspertheSpanishacronym). Asitmaybeobserved,sincethetopicsdiscussedarechieflyofataxnature,thepracticeadopted

bySUNATishavingdirectinfluenceontheactivitiesofotherentities,whichnotonlyfacilitatestheconcreteobjectivesbutalsofosterstheopennessofthegovernmentadministrationswithagreaterparticipativecomponent.

e.Theme-based working groups.

Oncetheinitiativesarediscussedanduponassertingtheinterestofbothpartiesoverthefurtherancethereof,theworkinggroupsareprioritizedandestablished.SuchgroupsaremadeupbyrepresentativesofSUNATcompetentareasandtheassociations involved.Asaresultof this jointeffort,numerousproposalsarosetomodifythetaxand/orcustomsprocedures,draftinginternalprocedures’handbooksandtheSuperintendencyResolutions,aswellasbillsandlegislation.

Theworkinggroupsoncustomsissuesdefinedtothepresentare:

o AirportWarehouseTerminals;o CustomsValuation;o TariffDrawback;o Customsviolationsandsanctions;o Transit,transshipmentandreshipment;o ExportingMap;o Sensitiveproducts;o Misdemeanors;o Gradualnatureofpenalties;extenuating/aggravatingcircumstancesintheenforcementofpenalties;

ando ElectronicProcessing.

Theworkinggroupssetupforinternaltaxationissuesare:

o Refunds;o Accountingbooks;o Paymentreceipts;o Simplificationofadministrativeprocedures;ando Electronicbooks.

Itshouldbehighlightedthatasaconsequenceoftheimplementationofthispractice,weenjoyagreateropportunityof learningabout theneedsandexpectationsof theforeigntradetaxpayersandusers,enablingtoimproveSUNATprocedures.



4. Difficulties:

Theprocessdescribedhasfacedanumberofdifficulties:

a. Thecoordinationmeetingsgenerateagreatexpectationintaxpayers.Nevertheless,itisclearthatthe resourcesavailable in theTaxAdministration tosimultaneouslymeet the requirementsandexpectationsoftheassociationsarelimited.Therefore, it isworthexplainingthelimitationsandprioritizingtheactionsonacoordinatedbasis.

b. Likewise,itislikelythattheapproachtotheinitiativesrequiresregulatorymodificationsandatleastapartofsuchchangesshouldnotdependdirectlyonthetaxadministration,butshouldfallunderthescopeofotheroffices,whetherbecauseofthecompetencyofotherinstitutionsorbyvirtueoftheruleoflaw.Thus,undertakingadialogmechanismliketheonesetforth,requiresthetaxadministrationtoundertakenewcoordinatedeffortswithotherinstitutions.

c. Thespecificformalitiessetforthbythelegislationineffectasregardstheactivitiesofgovernmentagencies areworth considering (in the case ofPeru, for example, theStateContracting andAcquisitions’Act).

d. Finally,weshouldcloselyconsidertherelevantroleofthetaxadministrationorganizationalculture,sinceitshallnecessarilyevolvefromthestrictcontrolparadigmtothatoffacilitation,dialogandcollaboration.

5. Results.

Theadvisorygrouponcustomsissueshasheld35monthlymeetingstothepresent31and38workinggroupmeetings.

Ontheotherhand,thegroupfocusedoninternaltaxationissueshasheld30monthlymeetingsand89workinggroupmeetings32.

31 As of January 2008.32 Annex 1 lists a number of the topics discussed.



Annex 1: Certain specific outcomes.

Theestablishmentofdialog instanceswithadvisorygroupshasenabled taxpayersandcitizens ingeneraltorelyonsimplifiedprocedures,orvirtualizedprocedureswhenpossible,reducingcitizens’taxobligationcompliancecosts.

Hereunder,wepointoutsomeofthechangesfosteredbytheprocessdescribed.

Area Change Implemented

RUC

1. UpdateofRUCdataviatheSOLfacility.(SUNATOnlineoperationsviatheSUNATWebportal).

2. Moreflexiblerequirements.3. Individuals’registrationandremovalfromtheRUCviatheInternet.4. Internetannulmentoftaxesandbranches.5. Notificationofactivities’suspensionandresumptionviatheInternet.

Services

6. Re-launchingofthecomplaintsandsuggestions’systemviatheInternet.7. Redesignof theTaxandCustomsAssistancemoduleon theSUNAT

PortalviatheInternet.8. IncorporationofthepersonalizedrecordinTaxStatement2005asan

automatedmeanstofacilitatefilingtaxstatements.9. Delivery of SOL codes and disseminationwith the support of

associations.10. LaunchingofSUNATe-Mailboxande-bulletin.11. ImplementationofanInternetreportingsystem.

Refunds

12. Development of theBenefits’ StatementProgram (PDB, as per theSpanishacronym)–Exporters.

13. Refundof the IncomeTaxFavorableBalanceand theExtraordinarySolidarityTax(IES,aspertheSpanishacronym)2004-forindividualsviainformationcrossingprocesses..

14. VirtualformfortheGeneralSalesTaxRefundformality.15. RefundofunappliedwithholdingsandreceiptsfortheGeneralSalesTax.16. Increaseof the interest rate paid by theStateon the refunds for the

unappliedwithholdingsand/orreceiptsfortheGeneralSalesTax.17. AutomatedrefundoftheannualIndividualIncomeTaxfavorablebalance

forfiscalyear2005basedoninformationcrossingprocesses.33.Receipts 18. Receiptsforopticaldisks’importstoavoidunder-valuations.

Discounts

19. AuniformminimumapplicationamountofthesystemwassetatS/.700(approximatelyUS$240)pertransaction,forallgoodsandservices.

20. We eliminated the requirement to file a certificate of good standingdeemednecessarytoreleasethefundsfrozenbythediscounts’system.Alternatively, the automated Internet-based pre-rating systemwasimplemented.

21. Implementation of discounts on cargo transportation applied only ontransactionsforamountsinexcessofS/400(approximatelyUS$135).

22. NotificationoftransferallocationinformationviatheInternet.

33 The term was reduced to 2 months, much shorter than the previous one for such formalities.



Area Change Implemented

PaymentReceipts

23. Extensionofthevalidityofpaymentreceiptsuntiltheissueofanewsetofrules.

24. Issue of the SuperintendencyResolution (RS, as per the Spanishacronym)thatgovernsremittancesofgoods.

25. AutomatedissueofreceiptsforextraordinarytransactionsforthepurposeoftheGeneralSalesTax(Form820)withthesubsequentreview.

26. AnnulmentofPaymentReceiptsviatheInternet.27. Eliminationoftherequirementtofileapolicereportcopyincaseoftheft.28. Enablingthechangeofjurisdictionwithouttheneedtoannulpayment

receipts.

TaxStatementsandPayment

29. ExpansionoftheInternet-taxpaymentoptiontothelargesttaxpayersoftheRegionalIntendancyofLima.

30. Implementationofcreditcardtaxpayments.31. ImplementationofqueriesandpaymentsviatheInternet.32. ThetaxbasefortheFourthCategoryincomewithholdingswasreduced

forthepurposeofIncomeTax(self-employedworkers;ingeneralterms,individualswhoundertakeaprofessionortradeontheirown).Likewise,theperiodfortheeffectivenessofthesuspensionwasreducedandthevirtualformwasimplemented.

TaxDebts’InstallmentPlans33. MoreflexiblerequirementstoregisterinthegeneralTaxDebts’Installment

PlansregulationssetforthinArticle36°oftheTaxCodeofPeru.

Coercivecollection34. Thecomplaintsfiledregardingtheenforcementofattachmentsthrough

banksweresolved.

TUPA35. ReviewoftheproceduresintheAdministrativeProcedures’SingleText

(TUPA,aspertheSpanishacronym)ofSUNATin2006.

AccountingBooks 36. IssueoftheAccountingBooks’regulation.

TransferPricing37. Thedeadline for thedeliveryof theTransferPricingTechnicalReport

wasmodified.

InflationAdjustments38. Anaccountingmethodologyproposalwassetforthforthetreatmentof

theinflationadjustmentindeflationperiods.

ForeignTaxpayers’Proceedings39. ThevirtualprocedureandformforSOL-basedincomeandwithholdings’

certificateswereestablished.

Answerstoqueries 40. A35-businessdaytermwasestablishedtoanswergeneralqueries.

MandatoryCriteria41. Thenationaloperatingunitswereinstructedforthecompliancethereof

subjecttopenalty.

ElectronicTaxStatementProgram(PDT)fortheTaxonInternationalTransactions(ITF)

42. Informationfromexemptedtransactionswasremoved.

PDT618 43. UpdateofthePDTfortrustandmutualfunds.

Lima,January28th,2008



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