## uraisraea ## Source details **Canonical URL:** [uraisraea](https://www.imf.org/-/media/files/publications/dp/2021/english/uraisraea.pdf) ## Other formats - [Markdown version](/-/media/files/publications/dp/2021/english/uraisraea.pdf.md) - [Structured JSON version](/-/media/files/publications/dp/2021/english/uraisraea.pdf.json) --- ### Executive Summary — Scope, Data, and Participation - Covers ISORA 2018 material including "ISORA 2018—General Overview" and "Analysis of ISORA 2018 Data", annexes, indices, and thematic boxes. - ISORA 2018 participation: - Total participating tax administrations: 159 - Participants with data in both ISORA 2016 and ISORA 2018: 131 - Four administrations began but did not complete the survey for a single year. - These administrations represent more than 90 percent of the worldwide economy and about 75 percent of tax administrations at the federal level. - Survey rounds and fiscal years: - ISORA 2016 — 2014, 2015 - ISORA 2018 — 2016, 2017 - ISORA 2020 — 2018, 2019 (Launched in September 2020; data were not yet available at the time the paper was drafted) - ISORA platform: Revenue Administration Fiscal Information Tool (RA-FIT). - ISORA 2020 onward: survey size reduced; data to be placed in the public domain; annual collection of a smaller core set of questions with periodic questions every four years. ### Background and Purpose - ISORA is an international arrangement among CIAT, IMF, IOTA, and OECD; ADB partnered in supporting participants in ISORA 2018. - ISORA provides profile information, performance, and practices for national or federal tax administrations. - ISORA 2018 responses cover fiscal years 2016 and 2017, with 159 administrations reporting. - Major review after 2018: data quality improvements, question clarification, reduced respondent burden, move to annual collection and public release. ### Overall Analytical Approach and Groupings - Subject areas grouped into three main components: - Performance-related data - Profile data - Practices and structural foundations for effective tax administration - Standard groupings for analysis: - Small states (population up to 1.5 million) — 39 jurisdictions - Lower-Income jurisdictions (LICs and LMICs combined) — 51 jurisdictions - Higher-Income jurisdictions (UMICs and HICs combined) — 69 jurisdictions - Caution: comparisons with ISORA 2016 complicated by differing respondent sets and question wording; medians often preferred due to skewed distributions. ### Key Participation and Regional Statistics (selection) - Total participants by IMF region: - Sub-Saharan Africa 39; Asia and the Pacific 32; Europe 43; Middle East and Central Asia 9; Western Hemisphere 36; Total 159 - Distribution by World Bank income group (Table 2 totals): - Low-Income Countries total 21 - Lower-Middle-Income Countries total 36 - Upper-Middle-Income Countries total 50 - High-Income Countries total 52 - Fragile states: - IMF-identified fragile states total referenced: 42 - Fragile States Completing ISORA: 25 - Fragile States Not Completing ISORA: 17 - Percent Fragile States That Completed ISORA: 60 percent ### Response Rates and Data Completeness - Participation increased from 135 (ISORA 2016) to 159 (ISORA 2018). - Filing-rate computable for roughly 67 percent of ISORA 2018 participants (60 percent for ISORA 2016). - On-line filing channel data: ISORA 2016 about 50 jurisdictions; ISORA 2018 about 70 jurisdictions. - On-time payment completeness/response rate: about 46 percent for 2017. - Online data collection allows entry of ‘D’ for data not available; response-rate calculations exclude Ds. ### Key points — Performance-related data (summarized findings) - General: - Most performance measures show improvement between ISORA 2016 and ISORA 2018. - Small-State and Lower-Income jurisdictions generally lag Higher-Income participants. - Lower-Income administrations generally show greater volatility in reported performance measures than Higher-Income administrations. - On-time filing (overall and by grouping): - Overall VAT on-time filing rate: 86 percent for 2017 (85 percent for 2015). - For Small States, median changes 2015→2017: CIT increased by 12 percentage points; PIT increased by 19 percentage points; PAYE decreased by 13 percentage points; VAT decreased by 11 percentage points. - Median percentage point differences in filing rates, 2015 vs. 2017 (Table 8): - Small States: CIT 2.5; PIT 0.4; PAYE –18.1; VAT 0.9 - Lower Income: CIT –6.8; PIT –5.2; PAYE –0.9; VAT 1.7 - Higher Income: CIT 0.6; PIT 0.3; PAYE 2.1; VAT 0.0 - All: CIT 0.7; PIT 0.3; PAYE 0.2; VAT 0.1 - On-time payment (overall 2015→2017): - PIT is up 4 points to 92 percent - CIT is up 5 points to 95 percent - PAYE is down one point to 96 percent - VAT is down one point to 91 percent - Note: some medians exceed 100 percent when estimated expected payments are underestimated. - Electronic filing and payment: - For 2017, approximately a quarter of respondents providing channel information indicated that 100 percent of CIT returns are received online (similar for VAT; PIT slightly less). - Table 9 — Average percentage of electronic payments by number, 2015 and 2017 (countries that participated in both surveys): - Small States (4/4): 2015 – ; 2017 – - Lower Income (6/4): 2015 47; 2017 – - Higher Income (20/34): 2015 54; 2017 57 - All (30/42): 2015 47; 2017 57 - Table 10 — Average percentage of electronic payments by value, 2017: - Small States (10): 46 - Lower Income (8): 60 - Higher Income (35): 64 - All (53): 60 - Tax arrears and uncollectible debt (2017): - ISORA median overall uncollectible debt: 38 percent - Small States: 40 percent - Lower-Income participants: 33 percent - Higher-Income participants: 45 percent - For the 73 participants providing arrears figures for both 2015 and 2017: median goes from 14.7 percent in 2015 to 16.9 percent in 2017. - Verification (audit) activity: - Approximately 30 percent of all tax administration staff engaged in verification-related activities. - Responses to audit-type questions (Table 11): - Comprehensive: Responses 2015 = 76; 2017 = 88 - Issue-Oriented: Responses 2015 = 66; 2017 = 89 - Desk: Responses 2015 = 49; 2017 = 65 - Automated audits (2017): non-zero responses from 18 administrations; median assessments raised (percent of tax revenue) = 0.25 percent. - Disputes (Table 12 — median growth rates between 2016 and 2017): - Small States (23/20): Median Growth Resolved = –11; Median Growth On Hand = 6 - Lower Income (29/25): Median Growth Resolved = 10; Median Growth On Hand = 17 - Higher Income (57/53): Median Growth Resolved = –4; Median Growth On Hand = 4 - All (109/98): Median Growth Resolved = –3; Median Growth On Hand = 8 - Cost of collection (Table 13 — median percent): - Small States: 2015 = 1.2; 2017 = 1.6 (sample sizes (11/30)) - Lower Income: 2015 = 0.9; 2017 = 1.4 (sample sizes (19/33)) - Higher Income: 2015 = 0.9; 2017 = 0.8 (sample sizes (46/64)) - All: 2015 = 0.9; 2017 = 1.0 (sample sizes (76/127)) - For 71 countries providing data for both years: medians 2015 = 0.87 percent; 2017 = 0.81 percent. - Tax administration resources relative to taxpayers and citizens (2014–2017 patterns): - Higher-Income grouping: highest taxpayers-per-FTE (approximately three times Small States and six times Lower-Income in 2017). - Lower-Income grouping: highest citizens-per-FTE (five to six times Small States and Higher-Income grouping). ### Key points — Profile data and institutional structure - Governance and scope: - Semi-autonomous: 74 of 159 (47 percent) - Within Ministry: 85 of 159 - Tax-only administrations: 100 of 159; Tax-and-Customs: 59 of 159 (about 37 percent) - Management boards among semi-autonomous participants (74): - 53 percent indicated they had a management board (39 participants) - Of those 39 boards, 80 percent (31) said the management board is decision-making - Average board metrics (Table 16): - All Boards (39): Average Number of Board Members 8.3; Average Number of Private Sector Board Members 2.7 - Revenue roles and shares (2017): - Non-tax revenue collected by 85 participants (about 53 percent) - Social security contributions collected by 42 participants (26 percent) - Other taxes collected by 131 participants (84 percent) - Average number of other taxes collected and non-tax roles executed (Table 17): - Small States (39): Other taxes collected 2.6; Non-Tax roles executed 1.3 - Lower Income (51): Other taxes collected 4.2; Non-Tax roles executed 1.1 - Higher Income (69): Other taxes collected 4.0; Non-Tax roles executed 1.5 - All (159): Other taxes collected 3.7; Non-Tax roles executed 1.3 ### Staff allocation, demographics, and gender - Reported average allocations of staff by function: - Front office functions (registration, service, returns, and payment processing)—30 percent - Back office functions (audit, verification, and enforced debt collection)—38 percent (elsewhere reported as about 42 percent) - Disputes and appeals—3 percent - Other functions—29 percent - FTE-by-function analysis sample: 116 administrations (complete functional-category reporters). - Age and service: - Percentage of staff 45 and older in 2017: 42 percent - By grouping (percentage of staff 45 and older): Lower-Income 33 percent; Small States 34 percent; Higher-Income 51 percent - Higher-Income jurisdictions: two-thirds of staff have 10 or more years of service - Fragile states: 33 percent have more than 10 years' service - Gender: - Overall female staff proportion: 52 percent (elsewhere reported as 53 percent) - Overall female executives: 43 percent (elsewhere reported as 40 percent) - Average proportion of female staff in Lower-Income jurisdictions: 38 percent - Female staff in joint tax and customs administrations: 49 percent - Regions with highest proportions of women staff and executives: Europe and Western Hemisphere ### Specialized units, segmentation, registration, and compliance approaches - LTO/P, HNWI, and small taxpayer regimes: - More than 85 percent of respondents reported a dedicated large taxpayer office/program. - Median percentage of net revenue administered through the LTO/P increased from 45 percent (2015) to 57 percent (2017). - Proportion reporting a dedicated unit for HNWIs increased from 19 percent (2015) to 23 percent (2017). - Incidence of small-taxpayer regimes: Lower-Income participants — close to 80 percent. - Registration and active taxpayers: - TIN usage: PIT — 2 percent of administrations do not use a TIN; CIT and VAT — 1 percent do not use a TIN. - Total participants by population bands: Small States (<1.5 million) 39; 1.5 to 7.5 Million People 40; 7.5 to 24 Million People 37; > 24 Million People 43; Total 159 - Active taxpayers as a percentage of registrants: Lower-Income grouping generally smaller proportion active; some jurisdictions reported growth in active taxpayers from 2015 to 2017 exceeding 100 percent. - Compliance risk and priorities: - Formal compliance risk approaches present for audit and verification: 83 percent overall. - VAT fraud a high priority for more than 70 percent of participants. - Higher-Income jurisdictions more likely to estimate VAT gap: VAT gap estimates increased from 35 to 38 percent overall from 2015 to 2017; Higher-Income increase from 45 percent to 57 percent. ### Boxes and Thematic Highlights (selected) - Box 1: Publications using ISORA data — partner publications from OECD, CIAT, IMF, ADB and selected research using ISORA (listed). - Box 2: ISORA and the Addis Tax Initiative — ISORA used to monitor ATI Commitment 2 indicators; ISORA data for 2015–2017 used for reporting by 16 countries in the 2018 ATI Monitoring Report. - Box 3: Gender in Tax Administration — flexible work arrangements associated with higher female staff/executive proportions; customs generally lower female representation than tax administrations. - Box 4: LTO/P methodological change — 2015 collected explicit revenue amounts by tax type; 2017 collected an actual or estimated single percentage of net revenue administered under the LTO/P; methodological change likely contributed materially to observed aggregate changes between 2015 and 2017. ### Indices, Annex 3 composition, and relationships to performance - Seven indices compiled from ISORA questions (scaled to 100): - Management and Human Resources Autonomy (weighted maximum score 25) - Public Accountability (weighted maximum score 25) - General Management (weighted maximum score 25) - Human Resources Management (weighted maximum score 25) - Service Orientation (weighted maximum score 25) - Compliance Risk Management Foundations (CRM Foundations) (weighted maximum score 25) - Degree of Digitalization (weighted maximum score 25) - Index highlights: - For all indices, Higher-Income jurisdictions score highest; Small States score lowest; Lower-Income generally in the middle (Degree of Digitalization tie with Small States). - Autonomy, General Management, and Human Resource Management indices: close to 60 percent of administrations score over 80. - Public Accountability and Degree of Digitalization: lowest average scores and largest regional spread. - Correlations among indices (Table 18 — preserved values as presented): - All correlations among the seven indices are positive. - Notable pairwise correlations preserved as in source (examples): - Autonomy with Public Accountability: 0.50 - Service Orientation with Degree of Digitalization: 0.62 - CRM Foundations with Degree of Digitalization: 1 0.64 (0.65) (table structure preserved) - Correlations between indices and selected performance measures (Table 19 — preserved values): - CIT on-time filing rate: - Autonomy: 0.23; Public Accountability: 0.18; General Management: 0.25; HR Management: 0.20; Service Orientation: 0.18; CRM Foundations: 0.13; Degree of Digitalization: 0.25 - VAT on-time filing rate: - Autonomy: 0.22; Public Accountability: 0.29; General Management: 0.24; HR Management: 0.23; Service Orientation: 0.30; CRM Foundations: 0.17; Degree of Digitalization: 0.18 - Arrears as percentage of tax revenue: - Autonomy: –0.16; Public Accountability: 0.01; General Management: –0.10; HR Management: –0.09; Service Orientation: 0.03; CRM Foundations: 0.03; Degree of Digitalization: 0.02 - Taxpayers per FTE: - Autonomy: 0.06; Public Accountability: 0.26; General Management: 0.11; HR Management: 0.11; Service Orientation: 0.25; CRM Foundations: 0.40; Degree of Digitalization: 0.50 - Cost of collection: - Autonomy: –0.07; Public Accountability: –0.13; General Management: –0.07; HR Management: –0.01; Service Orientation: –0.12; CRM Foundations: –0.17; Degree of Digitalization: –0.20 - Interpretation: - Mixed but generally positive relationships between indices and filing performance. - Degree of Digitalization and CRM Foundations show strongest associations with taxpayers per FTE (efficiency indicator). - Cost of collection shows small negative correlations with indices. - Indices useful for distilling large volumes of data; further study recommended as longer time series become available. ### Changes and Improvements Implemented from 2020 Onward - Review findings and resulting changes: - Survey size reduced from approximately 850 data points per year to an average of 250 data points per year. - Many questions clarified and simplified; low-utility questions eliminated. - Annual questions to be collected every year; other questions periodic (every four years). - Participants required in advance to agree that all data they provide can be placed in the public domain. - Almost all existing ISORA numerical time series to continue to be collected annually where possible. *Source: uraisraea - Executive Summary, Introduction, Boxes, Annex 3 (ISORA 2018) — IMF Departmental Paper content as provided.* ### Executive Summary ...................................................................................................... ### Executive Summary ### Scope and Purpose - Covers ISORA 2018 material including: - "ISORA 2018—General Overview" with subsections A. Introduction; B. Purpose of ISORA; C. Restrictions on the Use of ISORA Data; D. Publications Using ISORA Data; E. Changes and Improvements to ISORA from 2020 Onward. - Contains an "Executive Summary", "Acronyms and Abbreviations", and "Acknowledgments". - Annex material includes: - "Annex 1. ISORA 2018 Participation" - "Annex 2. ISORA 2018 Data Set Topics Not Discussed in this Publication" - "Annex 3. Composition of Indices" ### Data, Coverage, and Periodicity - ISORA survey rounds and fiscal years covered are summarized in "TABLE 1. ISORA Survey Rounds and Fiscal Years Covered". - Performance data comparisons include years and periods such as 2011 to 2017, 2014 to 2017, 2015, 2016, and 2017, as referenced in figures and tables. - Participation breakdowns by income group, IMF region, population size, and fragile state status are presented in: - "TABLE 2. Number of Survey Participants by Income Group and IMF Region" - "TABLE 3. Distribution of Number of Participants in Both ISORA 2016 and 2018 by Income Group and IMF Region" - "TABLE 4. ISORA 2018 Survey Participants by Population Size" - "TABLE 5. Fragile State Participation in ISORA 2018" - "FIGURE 2. Geographic Distribution of ISORA 2016 and 2018 Participants" ### Key Analytical Themes and Metrics - Participant metrics and analytical approach: "1. ISORA 2018—General Overview" and "2. Analysis of ISORA 2018 Data" with subsection A. Participant Metrics and Overall Analytical Approach. - Performance-related data: subsection B. Performance-Related Data; figures and tables include measures such as: - On-time filing rates (e.g., "FIGURE 7. Median On-Time Filing Rates for Main Tax Types, 2015 and 2017"; "FIGURE 8. Median On-Time Filing Rates for CIT for the Period 2011 to 2017") - On-time payment rates by value ("FIGURE 9. Median On-Time Payment Rate by Value, 2015 and 2017") - Electronic filing and payment rates ("FIGURE 10. Number of Responses by On-Line Filing Rate for VAT, PIT, and CIT, 2015 and 2017"; "FIGURE 11. Average Percentage of Returns Filed Electronically by Tax Type, 2015 vs. 2017"; "TABLE 9. Average Percentage of Electronic Payments by Number of Payments"; "TABLE 10. Average Percentage of Electronic Payments by Value, 2017") - Tax arrears and assessments ("FIGURE 12. Median Tax Arrears at Year-End as a Percentage of Total Net Tax Collected, 2015 and 2017"; "FIGURE 14. Median Assessments Raised through Verification Activity") - Verification and audit activity, adjustment rates, and dispute growth ("FIGURE 15. Verification Activity per 100 Active Taxpayers"; "FIGURE 16. VAT Audits per 100 Active VAT Taxpayers, 2015 and 2017"; "FIGURE 17. Median Adjustment Rate of Verification Activities by Tax Type"; "FIGURE 18. Adjustment Rate of VAT Verification Activity"; "TABLE 11. Responses to Audit Type Questions 2015 vs. 2017"; "TABLE 12. Disputes: Growth Rates Between 2016 and 2017") - Cost metrics ("FIGURE 19. Scatter Plot Showing Cost of Collection in 2017 Against Cost of Collection in 2015"; "FIGURE 20. Median Cost of Collection by IMF Region"; "TABLE 13. Median Cost of Collection 2015 and 2017") - Profile data: subsection C. Profile Date; includes indicators and illustrative examples ("TABLE 14. Illustrative Example of Indicators for 2017") - Practices and structural foundations: subsection D. Practices and Structural Foundations for Effective Tax Administration; indices and scores are analyzed ("FIGURE 50. Average Scores for Indices Related to Practices and Institutional Foundations, 2017"; "FIGURE 51. Histograms of Scores for Indices Related to Practices and Institutional Foundations, 2017"; "FIGURE 52. Scores for Indices Related to Practices and Institutional Foundations, 2017, by Agency Type"; "FIGURE 53. Scores for Indices Related to Practices and Institutional Foundations, 2017, by IMF Region"; "FIGURE 54. Scores for Indices Related to Practices and Institutional Foundations, 2017, by Fragile and Non-Fragile Respondents"; "TABLE 18. Correlations Between the Institutional Foundations and Practices Indices"; "TABLE 19. Correlations Between the Practices Indices and Performance Measures") ### Organizational Structure, Staffing, and Functional Breakdown - Institutional arrangements and governance: "FIGURE 22. Institutional Arrangements for Standard Groupings, 2017"; "FIGURE 23. Institutional Arrangements Including Nature of Management Board, 2017"; "TABLE 15. Institutional Arrangements Matrix, 2017"; "TABLE 16. Management Board Size by Type, 2017" - Functional staffing and FTE distribution: "FIGURE 27. Full -Time Equivaluent by Function, 2017"; "FIGURE 28. Average Percent of FTE by Function by Standard Grouping, 2017"; "FIGURE 29. Comparison of FTE by Function, 2015 vs 2017" - Staff demographics and gender: "FIGURE 30. Staff by Age Group, 2017"; "FIGURE 31. Staff Age Distribution by Standard Grouping, 2017"; "FIGURE 32. Service Profile of Tax Administration Staff, 2017"; "FIGURE 33. Service Profile of Tax Administration Staff by Standard Grouping, 2017"; "FIGURE 34. Female Staff and Executives, 2015 and 2017"; "FIGURE 35. Percentage Female Staff and Executives in Tax Revenue Administrations, Joint Tax and Customs Administrations, and Customs Administrations, 2017"; "BOX 3. Gender in Tax Administration" ### Specialized Units, Regimes, and Compliance Approaches - LTO/P, HNWI, and small taxpayer regimes: "FIGURE 37. Administrations with LTO/P, HNWI, and Small Taxpayer Regimes, 2015 vs. 2017"; "FIGURE 38. Median Percentage of Revenue Collected and of Active Corporate Taxpayers in LTO/P, 2015 and 2017"; "FIGURE 39. Taxpayer Selection Criteria for LTO/P, 2017"; "FIGURE 40. Range of Functions within LTO/Ps, 2015 and 2017"; "FIGURE 41. Criteria Used to Define HNWIs, 2017"; "FIGURE 42. Functions Performed by HNWI Unit, 2017"; "FIGURE 43. Incidence of Small Taxpayer Regimes, 2017" - Registrations, active taxpayers, and tax gap work: "FIGURE 44. Median Ratio of Active to Total Registrants by Tax Type, 2015 vs. 2017"; "FIGURE 45. Active Taxpayers as a Percentage of Citizens, 2015 vs 2017"; "FIGURE 49. Tax Gap Estimates Conducted by Tax Type, 2017" - Compliance risk and high priority areas: "FIGURE 46. Formal Approaches to Compliance Risk, 2017"; "FIGURE 47. High Priority Compliance Approaches, 2017"; "FIGURE 48. High Priority Focus Areas, 2017" ### Boxes and Thematic Highlights - Box entries include: - "BOX 1. Publications Using ISORA Data" - "BOX 2. The Addis Tax Initiative and ISORA" - "BOX 3. Gender in Tax Administration" - "BOX 4. Digging Deeper into the Difference Between LTO Collections in 2015 and 2017" ### Figures and Tables Inventory (selection) - Figures highlight response rates, filing and payment behavior, audit and verification activity, cost metrics, staffing, institutional arrangements, and index scores. Notable figure numbers include: 1–54 with specific topical mappings as listed above. - Tables cover survey rounds, participant counts, grouping of subject matter areas, standard grouping counts, median differences, electronic payments breakdowns, audit responses, cost of collection, indicator examples, institutional arrangements, and correlation matrices. Notable table numbers include: 1–19 with specific topical mappings as listed above. *Source: uraisraea - Executive Summary (ISORA 2018) — IMF Departmental Paper contents and figures/tables listing.* ### Executive Summary ### Executive Summary ### Background - ISORA 2018 encompasses responses from 159 national or federal tax administrations spanning profile information, performance, and practices in fiscal years 2018 and 2019. - ISORA is the product of an international arrangement among four parties: the Inter-American Center of Tax Administrations, the IMF, the Intra-European Organisation of Tax Administrations, and the Organisation for Economic Co-operation and Development. The Asian Development Bank partnered with these parties in supporting participants in ISORA 2018. - ISORA data have been used in reports on tax administration prepared by the ISORA partners and are increasingly used in research and capacity development. - A major review following the 2018 round recognized data quality could be further improved. The survey will comprise a far smaller set of annual questions collected annually rather than biennially, together with periodic questions, and all survey data will be placed in the public domain. - ISORA 2020 data, covering the 2018 and 2019 fiscal years, is planned to be released publicly toward the end of 2021. ### Overall analytical approach - Subject areas grouped into three main components: (1) performance-related data, (2) profile data, and (3) practices and structural foundations for effective tax administration. - Analysis groups the 159 tax administrations as: Small States (39 jurisdictions with a population of less than 1.5 million people), Lower-Income jurisdictions (51), and Higher-Income jurisdictions (69). - Comparisons with ISORA 2016 are made, but interpretation of changes in statistics from numerical survey questions is complex because different sets of administrations contributed data on particular subjects in the two rounds. ### Key points — Performance-related data - Most statistics on performance measures show an improvement between ISORA 2016 and ISORA 2018. For most performance measures, more data points are available for ISORA 2018. - Small-State and Lower-Income jurisdictions generally lag behind Higher-Income participants. - Lower-Income administrations generally show greater volatility in reported performance measures than Higher-Income administrations. ### Key points — Profile data - 74 of 159 administrations self-identified as semi-autonomous organizations. - 59 of 159 participants are responsible for both tax administration and customs administration (about 37 percent). - Reported average allocations of staff by function: - front office functions (registration, service, returns, and payment processing)—30 percent; - back office functions (audit, verification, and enforced debt collection)—38 percent; - disputes and appeals—3 percent; - other functions—29 percent. - Overall, female staff make up 52 percent of tax administration employees, but only 43 percent of executives. - The average proportion of female staff in Lower-Income jurisdictions is 38 percent. - Female staff make up 49 percent of staff in joint tax and customs administrations. - The two regions with the highest proportions of women tax administrators and tax administration executives are Europe and the Western Hemisphere (Americas and the Caribbean). - More than 85 percent of administrations reported a dedicated large taxpayer office/program, unchanged from ISORA 2016. - The median percentage of net revenue administered through the large taxpayer office/program increased between 2015 and 2017 from 45 percent to 57 percent, largely due to changes reported by Small States and Lower-Income jurisdictions. It appears much of this change may be due to permitting administrations to provide an estimate rather than providing the underlying data. - The proportion of administrations reporting the existence of a dedicated unit for High Net Wealth Individuals increased from 19 percent in 2015 to 23 percent in 2017, despite a decline among Small States (13 percent in 2015 versus 10 percent in 2017). ### Key points — Practices and structural foundations for effective tax administration - Seven indices compiled from ISORA questions: - Management and Human Resources Autonomy; - Public Accountability; - General Management; - Human Resources Management; - Service Orientation; - Compliance Risk Management Foundations; - Degree of Digitalization. - Scores across these seven indices are positively correlated, indicating good practice or structure in one facet is often associated with good practice in others. - The high correlation observed in ISORA 2016 between Public Accountability and Service Orientation remains. Service Orientation is also relatively strongly associated with Human Resource Management and Degree of Digitalization. Compliance Risk Management Foundations and Degree of Digitalization are also relatively strongly correlated. - For all indices, responses from Higher-Income jurisdictions lead to higher average scores. Lower-Income jurisdictions show higher scores on average than Small States, except on Degree of Digitalization where they are the same. - The Autonomy, General Management and Human Resource Management indices show the least dispersion in scores, with close to 60 percent of all administrations scoring over 80 (on a scale from zero to 100). - Administrations that self-identify as semi-autonomous score higher on average against all seven indices than administrations that do not. - By IMF region, administrations in Europe generally score highest against the seven indices. Regional differences in average scores are mostly smaller than differences by standard grouping (Small States, Lower-Income jurisdictions, Higher-Income jurisdictions). ### ISORA scope, participation, and data access - A total of 159 tax administrations participated in ISORA 2018, an 18 percent increase over ISORA 2016 participation. - These participating administrations represent more than 90 percent of the worldwide economy and about 75 percent of tax administrations at the federal level. - ISORA is hosted on an online data collection platform called the Revenue Administration Fiscal Information Tool (RA-FIT). - ISORA has been run biennially to date; survey rounds collect data for two fiscal years each time. Table of rounds and fiscal years covered: - ISORA 2016 — 2014, 2015 - ISORA 2018 — 2016, 2017 - ISORA 2020 — 2018, 2019 (Launched in September 2020; data were not yet available at the time the paper was drafted) - ISORA relies on voluntary participation and self-reporting by national or federal tax administrations; it is not an evidence-based undertaking (in contrast to TADAT). - There are restrictions on public access to ISORA data depending on partner-supported groups. Administrations supported by the ADB, CIAT, and OECD consented to their data being public. For the 2016 and 2018 surveys, administrations supported by the IMF and IOTA were not required to agree to placing their data in the public domain. Aggregate statistics of groups comprising at least five countries and sufficiently anonymized data can be made public. - From ISORA 2020 onward, all ISORA data will be placed in the public domain. ### Changes and improvements to ISORA from 2020 onward - Review conclusions: - The Survey is large; ISORA 2018 required participants to enter more than 1,700 total data points (covering two fiscal years). - ISORA data quality can be improved through better-worded questions, greater clarity in defining terms, and reducing participant burden. - Timeliness could be improved through annual collection rather than biennial collection of two fiscal years. - Much non-numeric profile data change little year-to-year and can be collected less frequently. - Some questions suffer from low response rates; participants may lack data or find reporting burdensome. - Confidentiality requirements for IMF- and IOTA-managed countries complicate use of ISORA data and are inconsistent with transparency principles. - Resulting changes for ISORA 2020 and onward: - Survey size reduced from approximately 850 data points per year to an average of 250 data points per year. - Many questions clarified and simplified; low-utility questions eliminated. - A small number of questions asked annually; a larger number asked periodically (every four years). Annual questions collected every year. - Participants required to agree in advance that all data they provide can be placed in the public domain. - Almost all existing ISORA numerical time series will continue to be collected annually; the ISORA Technical Working Group tries to avoid breaking series data. - ISORA 2020 will collect two fiscal years of data (2018 and 2019) for the last time in the revised format. The first single-year survey will be launched in 2021 (collecting data for 2020). The first periodic survey will likely be launched in 2023 (collecting data for 2022). ### Acronyms and abbreviations (selected) - ADB — Asian Development Bank - CIAT — Inter-American Center of Tax Administrations - FAD — Fiscal Affairs Department (of the IMF) - FTE — Full-time Equivalent - HNWI — High Net Wealth Individual - HR — Human Resources - IMF — International Monetary Fund - IOTA — Intra-European Organisation of Tax Administrations - LTO/P — Large Taxpayer Office/Program - OECD — Organisation for Economic Co-operation and Development - PAYE — Pay-As-You-Earn - PIT — Personal Income Tax - RA-FIT — Revenue Administration Fiscal Information Tool - TADAT — Tax Administration Diagnostic Assessment Tool - UMIC — Upper-Middle-Income Country - VAT — Value-Added Tax *Source: Executive Summary, ISORA 2018 departmental paper.* ### Box 1. Publications Using ISORA Data ### Box 1. Publications Using ISORA Data ### ISORA 2016 Partner Publications - OECD Tax Administration Series (TAS): Tax Administration 2017 Comparative Information on OECD and Other Advanced and Emerging Economies - https://www.oecd-ilibrary.org/taxation/tax-administration-2017_tax_admin-2017-en - CIAT Working Papers: - Tax Administrations: Collection, Costs and Personnel Evidence for the CIAT Countries with data of ISORA - https://biblioteca.ciat.org/opac/book/5560 - Making It Easier: Taxpayer Services, Cooperative Compliance and Tax Simplification: ISORA data on tax certainty and tax administrations - https://biblioteca.ciat.org/opac/book/5621 - IMF Departmental Paper: ISORA 2016 Understanding Revenue Administration - https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2019/03/07/ISORA-2016-Understanding-Revenue-Administration-46337 - Asian Development Bank: A Comparative Analysis of Tax Administration in Asia and the Pacific 2018 Edition - https://www.adb.org/publications/comparative-analysis-tax-administration-asia-pacific ### ISORA 2018 Partner Publications - OECD Tax Administration Series (TAS): Tax Administration 2019 Comparative Information on OECD and Other Advanced and Emerging Economies - https://www.oecd.org/tax/administration/tax-administration-23077727.htm - CIAT: Overview of Tax Administrations: structure; income, resources and personnel; operation and digitalization. ISORA (International Survey on Revenue Administration) - https://biblioteca.ciat.org/opac/book/5686 - ADB: A Comparative Analysis of Tax Administration in Asia and the Pacific 2020 Edition - https://www.adb.org/sites/default/files/publication/569626/tax-administration-asia-pacific-2020.pdf - Selected conference presentations - https://data.rafit.org/?sk=3dba84d7-1dd8-4533-b682-c0dfcb1d7f13 ### Papers and Reports Using ISORA Data - State Institutions and Tax Capacity: An Empirical Investigation of Causality - https://www.imf.org/en/Publications/WP/Issues/2019/08/16/State-Institutions-and-Tax-Capacity-An-Empirical-Investigation-of-Causality-48555 - Raising Tax Revenue: How to Get More from Tax Administrations? - https://www.imf.org/en/Publications/WP/Issues/2020/07/24/Raising-Tax-Revenue-How-to-Get-More-from-Tax-Administrations-49584 - Tax Administrations’ Capacity in Preventing Tax Evasion and Tax Avoidance - SSRN: https://ssrn.com/abstract=3300589 - Tax Certainty: Proposals for the Short Term and the Long Term, Economics Discussion Papers, No. 2018-16, Kiel Institute for the World Economy, Kiel - https://www.econstor.eu/bitstream/10419/174895/1/1014422841.pdf - Gender and Tax Policies in the Global South, K4D Helpdesk Report - https://www.ictd.ac/publication/gender-tax-policies-global-south-k4d/ ### Participant Metrics and Key Statistics (ISORA 2018) - Total participating tax administrations: 159 - Four administrations began but did not complete the survey for a single year. - Participants with data in both ISORA 2016 and ISORA 2018: 131 (four years of data available for these jurisdictions) - Geographic and income-group distribution (Table 2 — Number of Survey Participants by Income Group and IMF Region): - Low-Income Countries: Sub-Saharan Africa 19; Asia and the Pacific 0; Europe 0; Middle East and Central Asia 2; Western Hemisphere 0; Total 21 - Lower-Middle-Income Countries: Sub-Saharan Africa 14; Asia and the Pacific 13; Europe 2; Middle East and Central Asia 3; Western Hemisphere 4; Total 36 - Upper-Middle-Income Countries: Sub-Saharan Africa 5; Asia and the Pacific 11; Europe 11; Middle East and Central Asia 4; Western Hemisphere 19; Total 50 - High-Income Countries: Sub-Saharan Africa 1; Asia and the Pacific 8; Europe 30; Middle East and Central Asia 0; Western Hemisphere 13; Total 52 - Total participants by region: Sub-Saharan Africa 39; Asia and the Pacific 32; Europe 43; Middle East and Central Asia 9; Western Hemisphere 36; Total 159 - Distribution of participants in both ISORA 2016 and 2018 (Table 3): - Total 131 by region: Sub-Saharan Africa 35; Asia and the Pacific 19; Europe 41; Middle East and Central Asia 4; Western Hemisphere 32; Total 131 - By income group among the 131: - Low-Income Countries total 19 - Lower-Middle-Income Countries total 23 - Upper-Middle-Income Countries total 40 - High-Income Countries total 49 - Participation by country size (Table 4 — ISORA 2018 Survey Participants by Population Size): - Small States: < 1.5 Million People — Sub-Saharan Africa 0; Asia and the Pacific 4; Europe 11; Middle East and Central Asia 6; Total Low-Income Countries 21 (note: table presents distribution across groups) - Total participants by population bands: Small States (<1.5 million) 39; 1.5 to 7.5 Million People 40; 7.5 to 24 Million People 37; > 24 Million People 43; Total 159 - Source for population data cited: https://data.worldbank.org/indicator/SP.POP.TOTL - Fragile State participation (Table 5): - Fragile States Completing ISORA: 25 - Fragile States Not Completing ISORA: 17 - Percent Fragile States That Completed ISORA: 60 percent - Breakdown by income group: - Low-Income Countries: 14 completed; 8 not completing; 64 percent completed - Lower-Middle-Income Countries: 7 completed; 6 not completing; 54 percent completed - Upper-Middle-Income Countries: 4 completed; 3 not completing; 57 percent completed - High-Income Countries: 0 completed; 0 not completing; – (dash) - IMF-identified fragile states total referenced: 42 (of which 25 completed ISORA 2018) - Only one of the four states classified as “high conflict” by the World Bank participated in either of the first two rounds of ISORA. ### Response Rates and Data Completeness - Overall participation increased from 135 (ISORA 2016) to 159 (ISORA 2018). - Response rates improved for numerical questions between ISORA 2016 and ISORA 2018. - Improvements attributed to: (1) 2018 questionnaire revisions (simplification, rewording, additional guidance); (2) growth in availability of management data within participating administrations. - Trend noted: questions requiring more disaggregated data tend to have lower response rates (example: total full-time equivalents (FTEs) response rate exceeds the rate for subsets such as audit, investigation, and verification FTEs). - Noted exception: response rates to questions on active taxpayers did not follow the general trend. - Significant improvement observed in audit-related question responses and in completeness of data on revenue and arrears. - Online data collection platform permits numerical response of ‘D’ to denote data not available; response rate calculation excludes Ds and, where appropriate, zeroes. ### Analytical and Presentation Approach - ISORA 2018 subject-matter groupings used in analysis: - Performance-Related Data: Return filing and payment, electronic filing and payment, tax arrears, audit/verification, disputes, cost of collection, and tax administration resources. - Profile Data: Institutional arrangements, scope, segmentation, registration, personal income tax withholding and reporting, information-gathering powers, collection powers, management issues, human resources, and compliance risk management. - Data on Practices and Structural Foundations: Indices on management and human resources autonomy; public accountability; general management; human resource management; service orientation; compliance risk foundations and digitalization. - Indices constructed for administrative and operational practices based on counts of positive responses to related questions; higher counts yield higher index values (assumption: positive answers reflect “good” practice). ### Standard Groupings for Analysis - For most analysis the publication uses three standard groupings: - Small states (population up to 1.5 million) - Lower-income jurisdictions (LICs and LMICs combined) - Higher-income jurisdictions (UMICs and HICs combined) - Rationale: - Four-level income grouping (LIC, LMIC, UMIC, HIC) found to be too granular for some analyses and sample sizes. - Small states often exhibit characteristics (e.g., lower capacity) that justify separate treatment to increase group homogeneity and clarify statistical differences. - Table 7 indicates numbers by IMF Region and Standard Grouping (as presented in source). ### Comparing ISORA 2018 Data Against ISORA 2016 Data — Considerations - Typical comparisons emphasize 2017 vs 2015 statistics, with occasional four-year trends (2014–17). - Changes in averages or medians between survey rounds arise from: - Changes in data for administrations that provided data in both years. - Changes in the set of administrations that provided data in each period. - Example highlighted: ratio of core taxpayers to FTEs is sensitive to changes in participating administrations; in an example comparison, 82 administrations provided data for both years, 18 provided data for 2015 only, and 32 provided data for 2017 only — medians for single-year contributors and both-year contributors differ considerably. - Note: some participants transitioned between World Bank LMIC and UMIC classification between survey rounds (three countries moved from lower-income to higher-income grouping; one transitioned from higher-income to lower-income grouping), affecting composition of standard groupings. - Caution advised when interpreting large aggregate changes between rounds; the publication addresses contributing factors when changes are striking or unexpected. ### General Considerations and Support to Participants - Five ISORA partner organizations support participants: ADB, CIAT, IMF, IOTA, and OECD. - Support includes promoting survey completion, answering queries, providing assistance and explanations, following up, reviewing data quality, and addressing data use issues. - Many participants are supported by multiple partners; OECD supports 58 administrations including many from CIAT and IOTA membership; 37 actual OECD members are noted, with others associated via the OECD Forum for Tax Administration. - All participants are IMF members or supported by IMF Regional Capacity Development Centers. - ISORA 2018 data availability: - An Annex with Excel tables corresponding to charts (generally by standard grouping and World Bank Income Group tabulations) is available via the ISORA data portal: https://data.rafit.org - Annex includes counts of observations used to derive statistics. - Administration-level data on additional ISORA 2018 topics are available to registered users; Annex 2 in the publication lists topics not specifically discussed in the main text. *Source: ISORA 2018 — Box 1 and Section 2 (Participant Metrics and Overall Analytical Approach) from the ISORA 2018 IMF Departmental Papers PDF.* ### Introduction ### Introduction ### Overview - This section on performance data covers eight specific performance areas (including groups of measures) that are covered in ISORA. They are all generally quantitative measures, and most of the areas are also found in TADAT. - The purpose of this section is to illustrate the ability of ISORA to collect performance-related data, rather than to provide an exhaustive list of all the quantitative performance measures in ISORA. - A strong overlap exists between tax administration performance indicators available from ISORA and those used by the Addis Tax Initiative (ATI). - An arrangement has been made that facilitates the ATI’s monitoring program use of data collected through ISORA—see Box 2. ### Key measures discussed - Return filing—on-time filing rates - Payment—on-time payment rates - Electronic filing and payment - Percentage of returns filed electronically - Percentage of electronic payments - Tax arrears—arrears at year-end as a percentage of total net taxes collected - Verification - Assessments raised through verification activity as a percentage of total net taxes collected - Verification activity per 100 active taxpayers (coverage rate) - Percentage of verification activities leading to adjustment (adjustment rate) - Disputes - Growth in internal dispute cases resolved during the year - Growth in year-end stock of objections (administrative disputes) - Cost of collection (not measured in TADAT)—total recurrent expenditure as a percentage of total net taxes collected (excluding value-added tax [VAT] and excises on import) - Tax administration resources compared to taxpayers and citizens - Active core taxpayers per FTE (an FTE of 1.0 means resources equal to one staff member available for one full year) - Citizens per FTE *Box 2. The Addis Tax Initiative and ISORA* - The ATI’s Commitment 2 Tax Administration Performance Indicators monitor ATI members’ progress against three commitments annually. - Tax administration indicators in Commitment 2 cover: - Timely filing of declarations (or returns) - Timely payment of taxes - Use of electronic services - The audit program - Arrears management - Dispute mechanisms - Public accountability - Engagement between the ATI and ISORA Technical Working Group: During 2018 the ISORA TWG met with ATI members to discuss a common set of tax administration indicators usable globally. ISORA was identified as a key data source for monitoring ATI Commitment 2. Following consent by ISORA participants, ISORA data for 2015, 2016, and 2017 was drawn from the ISORA 2016 and ISORA 2018 databases and used for Commitment 2 reporting by 16 countries in the 2018 ATI Monitoring Report. ### Return Filing — findings and statistics - The on-time filing rate is determined by the ratio of returns filed on-time during the period for a given tax type to the total number of “expected” returns for that same tax type over the same period. - On-time filing rates were determined for all main tax types from the number of expected returns and the number of on-time returns. Where either number is not provided by a respondent, the rate cannot be calculated. - Filing rates can be computed for roughly 67 percent of the ISORA 2018 participants, compared to 60 percent for ISORA 2016. - Overall VAT on-time filing rate: 86 percent for 2017 (85 percent for 2015). - Higher-Income jurisdictions: filing rates are without exception higher than for other groups in all taxes for both 2017 and 2015. - Small States: lowest on-time filing rates for each tax type for 2017. - For Small States, median changes 2015→2017: - corporate income tax (CIT) increased by 12 percentage points - personal income tax (PIT) increased by 19 percentage points - pay-as-you-earn (PAYE) decreased by 13 percentage points - value-added tax (VAT) decreased by 11 percentage points - For Lower-Income jurisdictions, 2015→2017 median changes: - PIT decreased by 2 percentage points - CIT decreased by 6 percentage points - VAT decreased by 1 percentage point - PAYE increased by 5 percentage points - For Higher-Income jurisdictions, 2015→2017 median changes: - PIT increased by 4 percentage points - CIT increased by 5 percentage points - PAYE increased by 2 percentage points - VAT decreased marginally (from 90 to 89 percent) - Median percentage point differences in filing rates, 2015 vs. 2017 (Table 8) - Small States: CIT 2.5; PIT 0.4; PAYE –18.1; VAT 0.9 - Lower Income: CIT –6.8; PIT –5.2; PAYE –0.9; VAT 1.7 - Higher Income: CIT 0.6; PIT 0.3; PAYE 2.1; VAT 0.0 - All: CIT 0.7; PIT 0.3; PAYE 0.2; VAT 0.1 - Median on-time filing rates for CIT were previously analyzed for 2011 through 2015; Figure 8 extends the time series through to 2017. Very little change in reported CIT on-time filing rate between 2015 and 2017; major change occurred between 2013 and 2014. ### Payment — findings and statistics - ISORA collects information for on-time payments similar to on-time filing. - TADAT examines two measures for on-time payment (VAT only): (1) on-time payment rate by number of payments and (2) on-time payment rate by value of payments. VAT is used as a proxy for other tax types. - On-time payment rate by value generally exceeds on-time payment rate by number because large taxpayers are more compliant. - ISORA completeness/response rate for on-time payment is about 46 percent for 2017 (compared to more than 65 percent for on-time filing rates). - The on-time payment rate is defined as the value of payments received by due date as a percent of the estimated value of payments expected by due date. ISORA presents on-time payment rates by value for 2015 and 2017 for all four main taxes. - Overall on-time payment rates, 2015→2017: - PIT is up 4 points to 92 percent - CIT is up 5 points to 95 percent - PAYE is down one point to 96 percent - VAT is down one point to 91 percent - Observations: - Differences by income group and Small States do not appear significant, with almost all values clustered within a 10-percentage-point range, except PIT for lower-income countries. - Rates by group are not consistent across tax type; depending on tax type and year, each grouping can be highest, lowest, or in-between. - Caution: aggregate statistics can disguise large swings due to new jurisdictions reporting, jurisdictions ceasing reporting, and changes in values reported by jurisdictions providing data in both years. - Note: Some medians of more than 100 percent are observed because on-time payment rate >100 percent if estimated expected payment is less than the on-time payment. ### Electronic Filing and Payment — findings and statistics - ISORA seeks data on filing by channel (paper, online, or deemed acceptance for PIT) and payment by channel (online, via agency, in person). - On-line filing and payment rates are posited as measures of tax administration performance. - On-line filing response rates for ISORA 2018 remain low but improved over 2016: ISORA 2016 had data for about 50 jurisdictions; ISORA 2018 about 70 jurisdictions—still well under 50 percent of total ISORA participants. - Most responses for channel information come from Higher-Income jurisdictions; less than a quarter of all Small States and Lower-Income jurisdictions provided filing channel information. - For 2017, approximately a quarter of respondents providing return filing channel information indicated that 100 percent of CIT returns are received online (the corresponding figure for VAT and for PIT is just less than a quarter). - Administrations that offer e-filing are generally successful in getting CIT and VAT taxpayers to submit returns electronically. - PIT online filing rates lag CIT and VAT for 2015 but have somewhat caught up for 2017. - Average percentages of returns filed electronically for administrations reporting e-filing show Higher-Income participants generally have higher e-filing rates than Lower-Income and Small States; CIT and VAT e-file rates for Higher-Income jurisdictions often above 85 percent for both 2015 and 2017; PIT under 80 percent in each year for Higher-Income jurisdictions. - Slightly less than a third of administrations in Higher-Income jurisdictions that provided channel information indicate a 100 percent e-filing rate for CIT and VAT. Roughly 20 percent of Higher-Income respondents report 100 percent electronic filing for PIT. - Online payment rates are available for even fewer jurisdictions than online filing rates. - Both ISORA 2018 and 2016 ask for the percentage of electronic payments by number. Table 9: Average percentage of electronic payments by number, 2015 and 2017 (countries that participated in both surveys) - Small States (4/4): 2015 – ; 2017 – - Lower Income (6/4): 2015 47; 2017 – - Higher Income (20/34): 2015 54; 2017 57 - All (30/42): 2015 47; 2017 57 - Overall percentage of online payments increased by approximately 20 percent between surveys; Higher-Income participants increased electronic payments by some 10 percent; Small States and Lower-Income participants reported larger increases (based on a very small sample). - ISORA 2018 also collects average percentage of online payments by value (Table 10): - Small States (10): 46 - Lower Income (8): 60 - Higher Income (35): 64 - All (53): 60 - Percentages by value generally exceed percentages by number because number often includes many low-value payments less likely to be electronic. ### Tax Arrears — data collection notes - A common performance measure: ratio of the stock of total tax arrears at year-end to total tax collections for the year. This is a TADAT performance outcome area where a ratio is computed for each of the past three fiscal years and a three-year average taken to score the dimension. - ISORA collects information to compute the ratio of year-end tax arrears as a percentage of total net tax revenue; ISORA 2018 participants sometimes include VAT collected at the border by customs and sometimes do not. - To ensure comparability, VAT collected on imports is excluded from tax revenue in ISORA calculations; to the extent participants included it, ISORA-computed ratios may be overstated. - ISORA 2018 requested data on arrears collected, arrears written off, and new arrears established during the fiscal year to determine change in arrears compared to total net tax collection. Fewer participants provided figures for these components (105, 72, and 98, respectively) than for closing stock of arrears (125). - Figure 12 sets out the median values for tax arrears at year-end as a percentage of total net tax collection for 2015 and ... *Source: uraisraea - Introduction (ISORA 2018) — IMF departmental paper content* ### 2017. While this measure enjoys fairly high acceptance, some caution in its use is advised (see IMF publication related ### uraisraea - 2017. While this measure enjoys fairly high acceptance, some caution in its use is advised (see IMF publication related to ISORA 2016) ### Tax arrears and uncollectible debt - Tax arrears as a percentage of total net revenues are increasing for both Small States and Lower-Income participants over the 2015 to 2017 period; ratios for Higher-Income participants show much greater stability. - Significant tax revenues remain uncollected and can be expected to grow especially when results from FY 2020 are reported as these will reflect the impact of the COVID-19 pandemic. - TADAT definition: “the value of total core tax arrears at fiscal year-end as a percentage of total core tax revenue collections for the fiscal year.” Numerator includes all core tax arrears including penalties and interest, collectible and uncollectible; denominator includes total core tax collected (net of refunds) by the tax administration during the year. - ISORA collects the percentage of total debt considered uncollectible by the administration. For 2017: - Median overall: 38 percent - Small States: 40 percent - Lower-Income participants: 33 percent - Higher-Income participants: 45 percent - These figures are based on a response rate of 48 percent. - For the 73 participants providing arrears figures for both 2015 and 2017: - Median goes from 14.7 percent in 2015 to 16.9 percent in 2017. - Observations by grouping (2015 vs. 2017 arrears percent of net tax revenue): - Higher-Income: values cluster along the no-change line; little change overall but many extremely high values exist. - Lower-Income: most data points lie above the no-change line, indicating significant increases. - Small States: volatility evident in both smaller and larger arrears ratios. - Data quality cautions: implausibly high and low figures, skewed distributions; medians more useful than averages. See ISORA 2016 for fuller discussion. ### Verification (audit) performance and definitions - ISORA verification definitions: - Comprehensive Audit: in-depth, covers multiple taxes, numerous issues and tax years, mostly carried out at taxpayer premises. - Issue-oriented Audit: focused on specific issues, taxes, or tax years, normally at taxpayer premises. - Desk Audit: in-office review of taxpayer information, further written or telephonic enquiries. - Automated Audits: system/rule-based activities undertaken in an automated manner. - Focused performance measures: - Assessment results (audit effort): percentage of total tax revenue provided through verification activities. - Coverage rate: verification activity per 100 active taxpayers. - Adjustment rate: percentage of verification activity that leads to an adjustment in tax liability. - Staff engagement: approximately 30 percent of all tax administration staff engaged in verification-related activities. - Responses to audit-type questions (Table 11): - Comprehensive: Number of Responses 2015 = 76; 2017 = 88; Change +12; Percent Respondents Providing Data 2015 = 56; 2017 = 55. - Issue-Oriented: Number of Responses 2015 = 66; 2017 = 89; Change +23; Percent Respondents Providing Data 2015 = 49; 2017 = 56. - Desk: Number of Responses 2015 = 49; 2017 = 65; Change +16; Percent Respondents Providing Data 2015 = 36; 2017 = 41. - Automated audits (2017): non-zero responses from 18 administrations; median assessments raised (percent of tax revenue) = 0.25 percent. 11 of the 18 are in the Higher-Income grouping. Some 50 administrations reported zero; more than half of Small States indicated they raise no assessments from automated verifications. - Assessment results by audit type (2015 vs 2017) — observed patterns: - Small States: large variations; reductions in assessments as a percentage of revenue for all audit types. - Lower-Income: percentages up for comprehensive and desk audits, down for issue-oriented audits. - Higher-Income: issue-oriented and desk audit percentages increased; comprehensive audit percentage declined. - ISORA definitions and measurement caveats: automated audit category definition altered for 2018; automated audit effort reported is relatively small possibly because identified under-declarations are referred to other audit types; ISORA definitions may need improvement. ### Verification coverage and adjustment rates - Coverage and adjustment rates cannot alone define verification performance; together with results they indicate progress. - Reporting limitations: low reporting rates in 2015; 2017 response rates remain poor for Lower-Income group. - Comparing 2017 with 2015: - Coverage rates improved for all tax types except VAT. - VAT coverage dropped by 25 percent for Higher-Income participants and approximately 10 percent for Lower-Income participants, but VAT coverage remains considerably higher than for other taxes. - Adjustment rate reporting: generally poor response rates. For VAT: - Coverage and adjustment response rates: 38 percent in 2015 and 42 percent in 2017. - Respondents show increases across the board in adjustment rates for all tax types. ### Disputes (objections and appeals) - Effective dispute processes should: safeguard taxpayer right to challenge assessments, be based on legal framework, be known to taxpayers, be accessible, guarantee transparent independent decision-making, and resolve matters timely. - ISORA collects volume information on objections (internal administrative reviews) and appeals (external court/tribunal cases). - Potential performance measures: - Growth in number of cases resolved. - Size of outstanding administrative review backlog at year end (number of cases outstanding). - Response rate improvement: ISORA 2018 response rate = 68 percent vs. about 30 percent in ISORA 2016 (improvement may reflect dropping the value-of-tax questions). - Median growth rates between 2016 and 2017 (Table 12): - Small States (23/20): Median Growth in Number of Cases Resolved in Fiscal Year = –11; Median Growth in Number of Cases on Hand at End of Fiscal Year = 6. - Lower Income (29/25): Median Growth in Number of Cases Resolved in Fiscal Year = 10; Median Growth in Number of Cases on Hand at End of Fiscal Year = 17. - Higher Income (57/53): Median Growth in Number of Cases Resolved in Fiscal Year = –4; Median Growth in Number of Cases on Hand at End of Fiscal Year = 4. - All (109/98): Median Growth in Number of Cases Resolved in Fiscal Year = –3; Median Growth in Number of Cases on Hand at End of Fiscal Year = 8. - Note: Numbers in parentheses equal the sample size for data supplied in each column. - Interpretive cautions: large fluctuations possible, especially in smaller countries; external factors (tax policy, number of taxpayers, economic circumstances) can affect volumes. ### Cost of collection - Definition used in ISORA analysis: - Cost of collection = Total recurrent expenditure / Net revenue collected less VAT on imports - Recurrent expenditure only (excludes capital) to reduce volatility. - Data availability: - Sufficient information to compute ratio: 76 participants in 2015; 127 participants in 2017 (80 percent of participants for 2017 versus 51 percent for 2015). - Data suffer from implausibly high and low figures, skewed distributions; medians preferred for comparison. - Median cost of collection (Table 13) — Percent: - Small States: 2015 = 1.2; 2017 = 1.6 (sample sizes (11/30)) - Lower Income: 2015 = 0.9; 2017 = 1.4 (sample sizes (19/33)) - Higher Income: 2015 = 0.9; 2017 = 0.8 (sample sizes (46/64)) - All: 2015 = 0.9; 2017 = 1.0 (sample sizes (76/127)) - Observations: - Small States and Lower-Income medians appear to rise in aggregate, partly due to change in respondents. - Median for the 56 countries providing data in 2017 but not 2015 = 1.42 percent. - Medians for the 71 countries that provided data for both years: 2015 = 0.87 percent; 2017 = 0.81 percent. - Scatter comparison for 71 participants with both years shows: - Higher-Income administrations cluster along the no-change line, falling in the range of 0.4 to 2 percent. - Small States generally constant over time except for two jurisdictions. - Median cost of collection by institutional characteristics: - Self-declared semi-autonomous administrations median = 1.03 percent. - Administrations within ministries median = 0.90 percent. - Administrations with legislated "percentage-of-revenue-collected" budget formula (20 administrations that provided data) median = 1.08 percent. - Tax administrations not joint with customs median = 0.95 percent. - Tax administrations co-managed with customs median = 1.07 percent. - Note: co-managed administrations share resources with customs; tax-only cost is generally approximated. ### Tax administration resources relative to taxpayers and citizens served - Two measures presented for FY 2014 through 2017: - Median active core taxpayers per FTE (lines in Figure 21). Core taxpayers = registered and active for PIT, CIT, VAT, and employers. - Citizens per FTE (bars in Figure 21). Citizen counts from World Bank DataBank. - Key patterns by standard grouping (2014–2017): - Higher-Income grouping has the highest taxpayer-to-FTE ratio, approximately three times that of Small States in 2017, and six times that of Lower-Income administrations. - Lower-Income grouping has the highest citizen-to-FTE ratio, five to six times that of Small States and the Higher-Income grouping. - Interpretations: - Higher-Income jurisdictions suggest greater efficiencies, possibly from automation and e-services. - Small States show lower ratios consistent with expected economies of scale. - Trends: taxpayer-FTE ratio seems to be growing for Small States and Lower-Income groupings; slight decline in citizens-per-FTE — suggesting increasing efficiency over time, but cross-year respondent differences warrant caution. ### Summary comments on performance measures and illustrative indicators for 2017 - ISORA 2018 performance measures assessed for 2016 and 2017 by grouping. Year-over-year volatility remains, but number of respondents and improvements in most performance measures have increased. - Lower-Income and Small States generally lag Higher-Income participants. - Illustrative example of ISORA indicators for 2017 (in percent) (Table 14): - Small States: - VAT On-time Filing rate = 70 - CIT On-time Filing rate = 58 - VAT On-time Payment rate = 94 - CIT On-time Payment rate = 87 - Debt Ratio = 43 - VAT e-filing Rate = 68 - CIT e-filing Rate = 53 - Cost of collection = 2 - Lower Income: - VAT On-time Filing rate = 83 - CIT On-time Filing rate = 66 - VAT On-time Payment rate = 85 - CIT On-time Payment rate = 95 - Debt Ratio = 20 - VAT e-filing Rate = 88 - CIT e-filing Rate = 82 - Cost of collection = 1 - Higher Income: - VAT On-time Filing rate = 89 - CIT On-time Filing rate = 86 - VAT On-time Payment rate = 93 - CIT On-time Payment rate = 95 - Debt Ratio = 15 - VAT e-filing Rate = 88 - CIT e-filing Rate = 87 - Cost of collection = 1 - All: - VAT On-time Filing rate = 86 - CIT On-time Filing rate = 74 - VAT On-time Payment rate = 91 - CIT On-time Payment rate = 95 - Debt Ratio = 20 - VAT e-filing Rate = 85 - CIT e-filing Rate = 82 - Cost of collection = 1 - Fragile States: - VAT On-time Filing rate = 79 - CIT On-time Filing rate = 63 - VAT On-time Payment rate = 94 - CIT On-time Payment rate = 93 - Debt Ratio = 21 - Cost of collection = 2 - (Few Fragile States reported non-zero e-filing rates; several report zero e-filing) - ISORA limitations: not an evidence-based process; quality control limited to plausibility and technical checks; content accuracy is the responsibility of participating jurisdictions. - Forward direction: future iterations should focus more on measurable performance indicators to help participants improve tax administration performance; ISORA will continue working with ATI and others to promote and improve reporting of performance. *Italic: IMF DEPARTMENTAL PAPERS  ISORA 2018 (content excerpt provided).* ### Introduction ### uraisraea - Introduction ### Profile data and purpose - Profile data include both qualitative and quantitative data on a variety of aspects of tax administration; some data change rarely while other data are volumetric and expected to change year to year. - The section provides data on: - The institutional structure of the tax administration - Its scope of activities - The size of the tax administration (FTE and budget) and how these resources are deployed by function - Characteristics of the tax administration’s workforce - The existence and structure of large taxpayer offices or programs, including the share of total tax revenue from large taxpayers - The registration of taxpayers - Compliance risk issues—approaches, strategies, priorities - The section focuses on legal framework, structure, inputs, and outputs. ISORA harmonizes terminology and definitions so that “like” is compared with “like.” ### Institutional arrangements - Two common governance models: - Organizations composed of single or multiple directorates that are part of the ministry of finance - Semi-autonomous organizations, with or without a management board - Two basic types in terms of responsibility areas: - Tax administration and customs administration as separate organizational entities - Tax and customs administration comanaged in the same organization - ISORA participants self-assess semi-autonomy; no specific definition of “semi-autonomous” is provided. Semi-autonomy reflects a range on the autonomy spectrum. - For 2017, across all 159 ISORA participants (Table 15): - Semi-autonomous: 74 - Within Ministry: 85 - All: 159 - Breakdown by type: - Tax only: Semi-autonomous 32; Within Ministry 68; All 100 - Tax and Customs: Semi-autonomous 42; Within Ministry 17; All 59 - Key findings from 2017 governance data: - 74 participants (or 47 percent) self-identified as semi-autonomous organizations, down from 50 percent in 2015. - 100 of 159 (63 percent) participants were tax-administration-only in 2017; about one third of this group indicated they were semi-autonomous. - Tax-and-customs group: 42 of 59 (more than 70 percent) indicated a semi-autonomous arrangement. - Group patterns: - Small-State participants are much more likely to be part of the Ministry of Finance and less likely to be semi-autonomous; they are also highly likely to be tax administration–only organizations. - Higher-Income group (2017): 57 percent semi-autonomous; 65 percent tax administration only. - Lower-Income group (2017): 49 percent semi-autonomous; 59 percent tax administration only. - Among fragile state participants: 40 percent self-identified as semi-autonomous; 68 percent were tax-administration only organizations. ### Management boards (semi-autonomous participants) - ISORA asked semi-autonomous participants whether they had a management board, whether it was decision-making or advisory, number of board members, and number of private sector board members. - Of the 74 participants who self-identified as semi-autonomous: - 53 percent indicated they had a management board (39 participants). - Of those with a management board, 80 percent (31 of 39) said the management board is decision-making rather than advisory. - Average board composition (Table 16): - Decision-making Board (31): Average Number of Board Members 8.2; Average Number of Private Sector Board Members 2.6 - Advisory Board (8): Average Number of Board Members 8.8; Average Number of Private Sector Board Members 2.9 - All Boards (39): Average Number of Board Members 8.3; Average Number of Private Sector Board Members 2.7 - The average number of board members is eight, with an average of three of those from the private sector; these percentages are almost identical to 2015. ### Scope of tax administration revenues and roles - Revenue categories typically collected by a tax administration: - Main taxes: direct taxes such as PIT and CIT, and indirect taxes such as VAT and other goods and services taxes (VAT on imports normally collected at the border by customs). - Other taxes: domestic excises, motor vehicle taxes, real property, wealth taxes, estate and inheritance taxes, and others. - Social security contributions (SSCs): compulsory payments that confer entitlement to future social benefits where they are a major source of revenue and collected by the tax administration. - Non-tax revenues: welfare benefits, child support, property valuation, student loans, retirement savings, lotteries/gambling/gaming, and others. - Participation and revenue shares (2017): - Non-tax revenue is collected by 85 ISORA participants (about 53 percent). - Social security contributions are collected by 42 participants (26 percent). - Other taxes are collected by 131 of 159 participants (84 percent). - Observations: - In most groupings, the percent of administrations collecting a category and its share of total net revenues for those that collect are broadly similar. - Main taxes are the highest proportion of total revenue for all three standard groupings. - Higher-Income countries are twice as likely to collect SSCs as Lower-Income or Small States, although revenue-share differences where SSCs are collected are not as pronounced. - Where other taxes and non-tax revenues are collected by Lower-Income countries and Small States, they constitute a greater share of total net revenue than for Higher-Income countries. - Some non-tax roles assigned to tax administrations do not result in collection of any revenue. - International organizations advise that functions beyond core taxes need to be properly resourced to avoid diversion of resources from core tax collection; additional taxes should be adequately resourced within the administration. ### Non-tax roles and other taxes (averages) - Average number of other taxes collected and non-tax roles executed, 2017 (Table 17): - Small States (39): Other taxes collected 2.6; Non-Tax roles executed 1.3 - Lower Income (51): Other taxes collected 4.2; Non-Tax roles executed 1.1 - Higher Income (69): Other taxes collected 4.0; Non-Tax roles executed 1.5 - All (159): Other taxes collected 3.7; Non-Tax roles executed 1.3 ### Allocation of tax administration staff by function - ISORA collects FTEs by function; an FTE of 1.0 means resources equal to one staff member available for one full year. - Data coverage and comparability: - Only administrations that provided data for all functional categories were included in the FTE-by-function analysis, limiting the sample to 116 administrations. - Between 2015 and 2017, ISORA participants increased from 135 to 159. Administrations providing FTE-by-function data increased from 87 to 116 (response rate increased from 64 percent to 73 percent). - Functional allocation highlights (2017): - The proportion of staff allocated to audit and verification is the largest across functional groups except for the “All Other” category. - Audit and verification share by standard grouping: - Lower-Income jurisdictions: 19 percent - Small States: 28 percent - Higher-Income: 29 percent - Other than audit and verification, there is relatively little difference in functional distribution across standard groupings. - Higher-Income group shows a lower proportional allocation of resources to processing of payments and returns, possibly reflecting greater automation. - Consistency over time: - FTE allocation by function remained remarkably consistent between 2015 and 2017 despite increased participation. ### Staff demographics: age, length of service, and gender - Age: - Percentage of tax administration staff 45 and older in 2017: 42 percent (in 2015 it was 44 percent). - For comparison, based on International Labour Organisation (ILO) statistics the proportion of the general labor force 45 and older is about 36 percent. - By standard grouping (percentage of staff 45 and older): - Lower-Income jurisdictions: 33 percent - Small States: 34 percent - Higher-Income ISORA participants: 51 percent - These percentages have not changed appreciably from 2015. - Length of service: - High proportion of staff with service of 20 years or more, consistent with long staff tenure in specialized, technical work areas. - By standard grouping: - Higher-Income jurisdictions: two-thirds of their staff have 10 or more years of service but have had relatively small intakes of new staff. - Small States: more than a quarter of staff has been taken on in the past five years. - Fragile states: - Less than a third of their staff (33 percent on average) had more than 10 years of service. - Comparison: 45 percent for the Lower-Income jurisdictions and 58 percent on average for administrations in all non-fragile jurisdictions. - Gender: - ISORA collects data on the percentage of female staff and the percentage of female executives. - Note: No definition of “executive” was provided in ISORA 2018; the meaning varies among tax administrations, so individual ratios are not necessarily comparable. *Source: uraisraea - Introduction* ### Box 3. Gender in Tax Administration ### Box 3. Gender in Tax Administration ### Regional and group patterns in gender composition - Broad relationship observed between the proportion of women in the labor force and the proportion of women in tax administrations; only in sub-Saharan Africa is the ratio for tax administrations lower than the proportion of women in the labor force. - For the set of countries in Europe with available data, the average percentage of women in tax administration is less than the average percentage of women in the public sector by 4 percentage points. - For the corresponding set of countries in the Americas, the percentage of women in tax administration exceeds the percentage in public administration by 3 percentage points. - The proportion of female staff, as well as female executives, is generally higher in tax administrations in Higher-Income jurisdictions and Small States than in Lower-Income jurisdictions. - In each group, the average percentage of female executives is lower than the proportion of female staff. - Little discernable change between 2015 and 2017 in overall female staff and executive proportions. - Small States generally have relatively few executives, so larger fluctuations in the proportion of female executives are likely over a short time period. ### Policies, flexible work arrangements, and associations with gender balance - ISORA collects information on diversity policies, policies on flexible working arrangements, and the allowance of various flexible work practices in tax administrations. - Flexible work arrangements, in particular flexible working hours, and the accommodation of regular remote working, are associated with higher proportions of female staff and higher proportions of women executives. - ISORA 2018 data cannot determine causality: whether administrations with higher proportions of women executives are more likely to adopt flexible working arrangements, or whether flexible arrangements contribute to higher executive female representation. - Deeper analysis and additional data are required to answer causality questions and to explore linkages between executive diversity and performance outcomes. ### Comparisons across revenue administration types (tax, customs, comanaged) - ISOCA results: the workforce in customs administrations was found by the World Customs Organization survey to be 38 percent female. - Average proportions of female staff and executives in customs administrations are lower than those of tax administrations. - Proportions of female staff and executives in comanaged tax and customs organizations generally fall between tax and customs administrations. - In most revenue administrations, women are underrepresented amongst executives. - The difference in female staff proportions between tax and customs administrations is less pronounced in the Lower-Income grouping, which exhibits the lowest average proportions for all revenue administrations. ### Segmentation: large taxpayers, HNWI, and simplified regimes for small taxpayers - ISORA participants reported on three common segmentation groupings: (1) a large taxpayer office or program (LTO/P), (2) an HNWI program, and (3) a simplified regime (based on legislation) for small taxpayers. - Almost all Lower-Income and Higher-Income ISORA participants have a specific LTO/P; for Small State participants only 60 percent use this approach. - HNWI program emphasis increased between 2015 and 2017: - Higher-Income jurisdictions: from 32 to 35 percent. - Lower-Income jurisdictions: from 9 to 18 percent. - Small State participants: decreased from 13 to 10 percent. - Incidence of a specific regime for small taxpayers: - Lower-Income participants: close to 80 percent for both 2015 and 2017. - Average rate for all participants: just over 55 percent (both years). ### LTO/P performance indicators and selection criteria - Two measures used as indicators of a sound structure for LTO/Ps are the percentage of total net revenue collected through the LTO/P and the percent of CIT taxpayers included. - ISORA definition of total net revenue for LTO/P share includes CIT, PIT, VAT, employer withholding taxes, as well as other revenues. - Median percentage of total net revenue collected through the LTO/P: - Approximately 45 percent for 2015 (all participants). - Increased to 57 percent for 2017 (all participants). - For 2017, rates for Lower-Income countries were much higher than those for Higher-Income jurisdictions: 70 percent versus 45 percent. - CIT taxpayers included in the LTO/P are significantly lower for the Higher-Income group, consistent with Higher-Income participants having much higher rates of CIT taxpayers per citizen. - Median proportions of active CIT taxpayers to citizens: 2.6 percent (Higher-Income) and 0.6 percent (Lower-Income) — see section on Registration. - Criteria used to select taxpayers for inclusion in LTO/Ps: - Turnover is used by the vast majority of ISORA participants. - Economic sector or economic activity is the second most used criterion. - Taxes assessed or paid is another common criterion. - “Other criteria” reported, especially by Higher-Income participants, include multinationals, local branches of international companies, smaller companies or subsidiaries that form part of a group, individuals with international business interests, and “Very Important Persons” (VIPs) such as members of parliament and senior government officials (who may not be HNWIs). - Range of functions provided by LTO/Ps: - Audit is the most common function at 96 percent overall. - Some 23 percent of all participants with an LTO/P report having all functions in the LTO/P in 2017; for 2015 the corresponding figure was 19 percent. - Relatively few LTO/Ps provide full-service (the full range of tax administration functions: registration, taxpayer services, returns and payment processing, audit, enforced collection of arrears, and dispute resolution). *Source: Box 3. Gender in Tax Administration, ISORA 2018 (as presented in the provided content).* ### Box 4. Digging Deeper into the Difference between LTO Collections in 2015 and 2017 ### Box 4. Digging Deeper into the Difference between LTO Collections in 2015 and 2017 ### Possible reasons for the apparent change in LTO/P collections - Change in methodology: - 2015: LTO revenue collections as a percentage of total net revenue were calculated from the explicit provision of revenue amounts by tax type. - 2017: administrations were asked directly for “the actual or estimated percentage of net revenue administered under this program (the LTO/P) in relation to total net revenue.” In other words, 2015 required separate information on actual revenues for each tax type; 2017 required a single percentage figure for all revenues, actual or estimated. - Different sets of administrations provided data for 2015 and 2017: - Far more participants for 2017. - A far higher proportion of participants provided the estimated proportion of LTO revenue for 2017 than provided actual collection figures for LTOs for 2015. - Possible substantive changes to LTO/P operations: - Changes could relate to the proportion of taxpayers managed through the LTO/P, the resourcing of the LTO/P, economic factors, tax policy changes, or new approaches that increased collections. - Such changes could explain large shifts for individual administrations but are unlikely to account for the aggregate difference alone. ### Empirical examination of the ISORA data - Panel examined: administrations that provided figures from 2014 through to 2017, compared with administrations reporting only in 2015 or 2017. - Key findings: - For the 41 administrations with data for all four years, the median LTO/P collections show a far greater change between 2015 and 2016 than between 2014 and 2015 or between 2016 and 2017—suggesting the change in collection methodology most likely contributed materially to the observed difference. - Individual-administration volatility: eight administrations recorded a more than 15 percentage point decrease from 2015 to 2017, while 12 recorded a more than 15 percentage point increase. - The 62 administrations providing data for 2017 but not for 2015 (including 13 that did not participate in the earlier round) generally provided a higher estimated LTO/P revenue as a percentage of net revenue than other 2017 reporters, which may have contributed to the aggregate change. ### HNWI programs (summary) - ISORA compiles data on HNWI programs, including criteria for inclusion and range of functions administered. - Inclusion criteria: - Wealth and income level dominate. - "Prominent person (VIP)" criterion is sometimes used primarily for service convenience rather than risk management. - Functions performed: - Audit is performed by more than 80 percent of all HNWI units. - Service function is the second most common function. - Collection enforcement (arrears) is somewhat less frequent for HNWI units than for LTO/Ps—possible explanation: HNWI-related debts may involve many small amounts better handled through normal arrears procedures. - Consequently, proportionally fewer HNWI units than LTO/Ps offer the full range of services. ### Simplified regimes for small taxpayers - Small-taxpayer regimes help include many citizens in the tax system even if they pay small amounts; Lower-Income jurisdictions face additional challenges (few records, low revenue per taxpayer). - Regime usage: - Comparing 2015 and 2017 shows most administrations are operating more than one regime. - Averages: 2017 average of 1.8 regimes per administration versus 2015 average of 1.3 regimes per administration. ### Registration: TINs, active vs total taxpayers, and taxpayers per citizen - Use of Taxpayer Identification Number (TIN): - PIT: only 2 percent of administrations do not use a TIN. - CIT and VAT: 1 percent of administrations do not use a TIN. - Active taxpayers vs total taxpayers on the register: - Many jurisdictions cannot or do not distinguish total vs active taxpayers; causes unclear and warrant further study. - Lower-Income grouping generally has a smaller proportion of active taxpayers (higher proportion of inactive taxpayers). - For 2017, the percentage of active to total for Lower-Income jurisdictions has increased for all four tax types; growth in active taxpayers from 2015 to 2017 exceeds 100 percent in some jurisdictions. - Notable changes in active/total ratios between 2015 and 2017: - VAT for Higher-Income countries: 7 percent drop in the active/total ratio; about 3 percentage points (of the 7) result from changed responses by participants for 2017, the remainder due to the change in mix of participants. - PAYE for Small States: 20 percent drop in the active/total ratio; about 13 percentage points (of the 20) are the result of changed responses by participants, the remainder due to the change in mix. - Additional explanatory notes on the concept of “active taxpayer” in the 2017 questionnaire may have contributed. - Taxpayers as a percentage of citizens: - Lower-Income participants have consistently lower values for all tax types, and these are lower by an order of magnitude for PIT and VAT. - Contributing factors: poor-quality tax registries; weaker administrative capacity to monitor filing/payment; significant grey economy/non-registrants; economic conditions; final withholding PIT systems; higher VAT thresholds. - Note: the calculation uses active taxpayers where provided, or total taxpayers where active is not provided. ### Compliance risk approaches and priorities - Formal approaches to compliance risk management: - All three standard groupings report similar levels of formal approaches across tax administration functions in 2017—a change from 2015 where Small States reported lower levels. - Across all groups, audit and verification activities are most likely to have formal compliance risk approaches: 83 percent overall. - Taxpayer service and payment processing are least likely to have formal compliance risk approaches: 61 percent and 63 percent, respectively. - Compliance strategy priorities: - Higher-Income jurisdictions generally place higher priority on more recently introduced approaches (e.g., third-party data visibility, exchange of information). - Change between 2015 and 2017 in priority on third-party data: - Higher-Income group: increase of 19 percent. - Lower-Income group: decrease 36 percent. - Part of these changes is due to changes in participant mix and reported values. - Priority focus areas: - Ten focus areas were indicated as high priority by more than 20 percent of participants. - VAT fraud is a high priority for more than 70 percent of participants. - Small States assign generally lower priority across focus areas than Lower-Income and Higher-Income groups. - Lower-Income jurisdictions: “preferential tax regimes and incentives” is a high-priority focus. - More administrations indicated that HNWIs were a priority in 2017 than in 2015. - Higher-Income jurisdictions focus more on aggressive domestic tax avoidance schemes and the underground/cash economy compared with peers. - Tax gap estimation: - Higher-Income jurisdictions most likely to formally estimate tax gaps: - PIT: 38 percent - CIT: 36 percent - VAT: 57 percent - Small States are least likely to produce tax gap estimates. - More administrations estimate the VAT gap than other tax gaps—methodologies and data availability (e.g., IMF’s RA-GAP program) contribute. - Percent producing VAT gap estimates increased from 35 to 38 percent from 2015 to 2017, largely due to an increase from 45 percent to 57 percent for Higher-Income jurisdictions. ### Selected conclusions from the profile data - Institutional form and responsibilities: - Slightly less than half of participating administrations self-identified as semi-autonomous organizations: 74 of 159. - About 37 percent of participants (59 of 159) are responsible for tax administration and customs administration. - Staff allocation by function (overall reported percentages): - Front office functions (registration, service, returns and payment processing)—about 30 percent of staff. - Back-office functions (audit, verification, and enforced debt collection)—about 42 percent of staff. - Disputes (objections and appeals)—about 3 percent of staff. - Other operational and support functions—about 30 percent of staff. - These percentages are very similar to ISORA 2016 results. - LTO presence and workforce demographics: - More than 85 percent of respondents report having dedicated Large Taxpayer Offices or Programs. - Age distribution (employees aged 55 or older): - Higher-Income group: 21 percent - Small States: 12 percent - Lower-Income participants: 9 percent - Gender composition: - Overall, female tax administration staff make up 53 percent of tax administration employees. - Female staff make up 40 percent of executives. *Source: ISORA 2018 (Box 4 content as provided).* ### Annex 3 provides background information on each index as follows: ### uraisraea - Annex 3 provides background information on each index as follows: ### Annex description - Annex 3 specifies: - The specific ISORA 2018 question(s) used for the index. - The relative weighting applied for each question. - Some ISORA 2018 responses contribute to more than one index when practices are pertinent to multiple indices (example: delegations of authority to manage human resources contribute to both the Autonomy index and the Human Resource Management index). ### Analysis — average scores and group comparisons - Indices are scaled to have a maximum value of 100. - Figure 50 summary (average scores by standard grouping: Small States, Lower-Income, Higher-Income): - For all indices, Higher-Income jurisdictions score highest, and Small States score lowest. - Lower-Income participants are generally in the middle, except for the "Degree of Digitalization" index where they are tied with Small States. - Autonomy, General Management, and Human Resources Management indices score highest for all three groupings; similarity partly due to overlap in components. - Public Accountability and Degree of Digitalization score lowest for all three groupings. - The lower scores for Public Accountability are noted as surprising given an expectation that greater autonomy is often associated with increased public accountability. - Distribution of scores across administrations (Figure 51): - For Autonomy, General Management, and Human Resource Management, most administrations score more than 80. - Remaining indices show less clustering; Public Accountability shows the greatest variation. - Average scores by other groupings: - Self-identifying semi-autonomous administrations score higher on average against all seven indices; differences most pronounced for Public Accountability and Human Resource Management. - By IMF region (Figure 53): widest spread by region seen in Public Accountability and the Degree of Digitalization. - Europe results largely reflect Higher-Income scores. - Sub-Saharan Africa follows Lower-Income pattern. - Western Hemisphere reflects a blend of Small States and Higher-Income countries. - Middle East and Central Asia administrations in sample not representative of the region as a whole. - Fragile states versus non-fragile states (Figure 54): - 76 percent of fragile state respondents fall under the Lower-Income grouping. - For all indices, fragile states average lower than non-fragile states. - Fragile state average also lower than the average for Lower-Income non-fragile states. - Largest difference: Degree of Digitalization index — fragile states have not digitalized tax operations and service channels to nearly the extent of other administrations. - Next three largest differences: Service Orientation, Public Accountability, and Compliance Risk Management Foundations. - These four indices have the strongest association with the number of active taxpayers per FTE, an indicator of administration "reach". - Findings are consistent with earlier performance indicators: fragile states largely lack e-filing and have relatively high cost of collection. ### Relationships among the seven indices (Table 18) - All correlations among the seven indices are positive. - Table 18 pairwise correlations (note: numbers in parentheses give the correlation without excluding common elements in specified cases): - Autonomy with: - Public Accountability: 0.50 - General Management: 0.44 - HR Management: (0.73) 0.48 (notation in source shows 0.44 then (0.73) then 0.48 — preserved elements) - Service Orientation: (0.82) 0.54 - CRM Foundations: 0.39 - Degree of Digitalization: 0.43 - Public Accountability with: - General Management: 1 0.54 0.55 0.64 (presentation in source shows a cluster; preserved as listed in table structure) - HR Management: 0.58 - Service Orientation: 0.54 - General Management with: - HR Management: 1 0.49 0.54 0.42 0.43 (preserved as shown in table) - Service Orientation: 0.42 - CRM Foundations: 0.43 - HR Management with: - Service Orientation: 1 0.62 0.43 0.44 (preserved as shown) - CRM Foundations: 0.43 - Service Orientation with: - CRM Foundations: 1 0.581 0.62 (0.68) - Degree of Digitalization: 0.62 - CRM Foundations with: - Degree of Digitalization: 1 0.64 (0.65) - Degree of Digitalization: 1 - Strongest observed pairwise correlations highlighted in the source: - Degree of Digitalization and Compliance Risk Management Foundations. - Service Orientation and Public Accountability. - Service Orientation and Degree of Digitalization. - Human Resource Management and Service Orientation. - An appreciable but somewhat lower correlation exists between Autonomy and Public Accountability despite significantly lower average scores for Public Accountability relative to Autonomy. - Note on Table 18: the source removes duplicate/common components for certain correlation calculations; numbers in parentheses indicate correlations without excluding the common elements for the five specified cases. ### Do practices and institutional foundations impact performance? (Table 19) - Correlations between the seven indices and selected performance measures (values preserved exactly as in source): - CIT on-time filing rate: - Autonomy: 0.23 - Public Accountability: 0.18 - General Management: 0.25 - HR Management: 0.20 - Service Orientation: 0.18 - CRM Foundations: 0.13 - Degree of Digitalization: 0.25 - VAT on-time filing rate: - Autonomy: 0.22 - Public Accountability: 0.29 - General Management: 0.24 - HR Management: 0.23 - Service Orientation: 0.30 - CRM Foundations: 0.17 - Degree of Digitalization: 0.18 - Arrears as percentage of tax revenue: - Autonomy: –0.16 - Public Accountability: 0.01 - General Management: –0.10 - HR Management: –0.09 - Service Orientation: 0.03 - CRM Foundations: 0.03 - Degree of Digitalization: 0.02 - Taxpayers per FTE: - Autonomy: 0.06 - Public Accountability: 0.26 - General Management: 0.11 - HR Management: 0.11 - Service Orientation: 0.25 - CRM Foundations: 0.40 - Degree of Digitalization: 0.50 - Cost of collection: - Autonomy: –0.07 - Public Accountability: –0.13 - General Management: –0.07 - HR Management: –0.01 - Service Orientation: –0.12 - CRM Foundations: –0.17 - Degree of Digitalization: –0.20 - Interpretation provided in source: - Results are mixed; modest correlations with on-time filing rates. - No apparent relationship between indices and the arrears measure (arrears data show year-over-year variability and may reflect factors not recorded in ISORA). - Strongest associations: Degree of Digitalization and CRM Foundations with active taxpayers per FTE (an efficiency indicator). - Cost of Collection shows small negative correlations with all indices. - The exercise illustrates complexity but suggests promise for evidence-based advice as better standardized performance measures and longer time series become available. ### Conclusion - Seven indices introduced cover administrative, operational practices, and structural foundations for effective tax administration. - Common pattern: Higher-Income jurisdictions are further ahead of Small State and Lower-Income jurisdictions in implementing good practices and structural foundations. - Correlations exist among all seven indices and with some tax administration performance measures. - Some index–performance relationships warrant closer examination as future ISORA surveys provide longer time series. - Indices are useful for distilling large data into a simplified structure for comparison; ISORA examples are increasingly used or adapted in research on revenue administration. *Source: ISORA 2018 — Annex 3 (uraisraea).* ### Annex 3. Composition of Indices ### Annex 3. Composition of Indices ### Management and Human Resources Autonomy - Component: Management and Human Resources Autonomy - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - Does the tax administration: - (a) Exercise discretion over the operating budget? — 3 - (b) Exercise discretion over the capital budget? — 2 - (c) Establish performance standards? — 1 - (d) Determine its own internal structure? — 3 - (e) Determine work requirements? — 2 - (f) Make appointments of new staff? — 3 - (g) Decide on promotion of existing staff? — 3 - (h) Decide skills and qualifications required for appointment or promotion? — 2 - (i) Place staff within a salary range? — 1 - (j) Terminate employment. — 3 - (k) Apply disciplinary sanctions? — 2 - ISORA form/code mappings: - 2A, 2A, 2A, 2A, 3B, 3B, 3B, 3B, 3B, 3B, 3B - 2.b, 2.c, 3, 2.a, 4.a.i, 4.a.ii, 4.a.iii, 4.a.iv, 4.a.vi, 4.a.vii, 4.a.viii ### Public Accountability - Component: Public Accountability - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - Does the tax administration: - (a) Publish its strategic plan? — 3 - (b) Publish its annual business/operations plans? — 3 - (c) Make public a formal set of service delivery standards? — 3 - (d) Publish the results it achieves against the formal service delivery standards? — 2 - (e) Publish its annual report? — 3 - (f) Make key compliance risks public regularly? — 2 - (g) Make reports of outcomes in addressing compliance risks public regularly? — 2 - (h) Publish the results of taxpayer satisfaction surveys? — 1 - (i) Have a document that formally sets out taxpayer rights? — 3 - (j) Have a specific mechanism for managing taxpayer complaints: - i. Internal? — 1 - ii. External? — 1 - (k) Publish periodic estimates of the tax gap? — 1 - ISORA form/code mappings: - 2B, 2B, 2B, 2B, 2B, 2B, 2B, 7, 7, 7, 7 - 1.b, 1.d, 1.f, 1.g, 1.i, 1A.b, 1A.c, 5.c, 12, 13, 13, 7.a.i, 7.b.i, 7.c.i, 7.d.i ### Human Resource Management - Component: Human Resource Management - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - (a) Can make appointments of new staff — 3 - (b) Can decide on promotion of existing staff — 3 - (c) Can decide skills and qualifications required for appointment or promotion — 2 - (d) Can terminate employment. — 3 - (e) Can apply disciplinary sanctions — 3 - (f) Periodically survey staff - must include all 3 elements: - i. Assess staff engagement; - ii. Share results with staff; - iii. Engage staff in action plans — 1 - (g) Has staff performance management system that includes the following elements: - i. Individual plans; - ii. Specific objectives; - iii. Annual evaluation — 1 - (h) Performance can be linked to pay - must include both elements: - i. More pay for good performance; - ii. At least one of Reduced pay for poor performance or denial of increment for poor performance — 1 - (i) Have HR strategy — 3 - (j) Have Training strategy in place — 2 - (k) Have job rotation procedures in place — 1 - (l) Have policies for flexible working arrangements — 1 - (m) Have a diversity policy — 1 - ISORA form/code mappings: - 3B repeated across many items - 4.a.ii, 4.a.iii, 4.a.iv, 4.a.vi, 4.a.vii - 5.a.i, 5.a.ii, 5.a.iii, 5.b.i, 5.b.ii, 5.b.iii, 5.c.i, 5.c.ii, 5.c.iii - 6.a, 6.b, 6.c.ii, 6.d, 6.g ### General Management - Component: General Management - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - (a) Prepare a strategic plan — 3 - (b) Prepare annual business/operations plans — 2 - (c) Prepare an annual report — 3 - (d) Integrity framework includes legislation (law or part of a law) — 1 - (e) Has code of conduct, either one of: - i. public service wide code of conduct; - ii. own code of conduct — 1 - (f) Integrity strategy includes internal awareness campaign — 1 - (g) Integrity strategy includes Integrity Action Plan — 1 - (h) Have enterprise-wide risk policy — 1 - (i) Have an internal audit (assurance) function — 2 - (j) Exercise discretion over the operating budget — 3 - (k) Exercise discretion over the capital budget — 3 - (l) Determine its own internal structure — 2 - ISORA form/code mappings: - 2B, 2B, 2B, 2B, 2B, 2B, 2B, 2B, 2B, 2B, 2A, 2A, 2A - 1.a, 1.c, 1.h, 1.m, 1.n, 1.o, 1.r.iv, 1.r.i, 1.l, 1.k, 2.b, 2.c, 2.a ### Service Orientation - Component: Service Orientation - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - (a) Does the administration have a formal set of service delivery standards? — 2 - (b) Does the administration use information on compliance burden to stakeholders? — 2 - (c) Are stakeholders involved in the design of services? — 1 - (d) Can taxpayers register through other agencies? — 1 - (e) Can taxpayers register simultaneously for multiple taxes? — 1 - (f) Does the administration have a formal taxpayer service and assistance strategy? — 3 - (g) Does the administration conduct taxpayer satisfaction surveys? — 2 - (h) Is special provision made for taxpayers with disabilities? — 1 - (i) Are services (telephonically/on the web) provided in languages other than the official language? — 1 - (j) Does the administration have a web site? — 3 - (k) Are rulings provided to taxpayers? — 3 - (l) Are taxpayer rights set out in a formal document? — 3 - (m) Does the administration have a specific mechanism for managing taxpayer complaints: - i. Internal? — 1 - ii. External? — 1 - ISORA form/code mappings: - 2B, 2B, 2B, 5, 5, 7, 7, 7, 7, 7, 7, 7, 7, 7 - 1.e, 1.p, 4, 1.a.ii, 1.a.iii, 1.f, 1, 5, 7.a, 7.d, 7.e, 8.a, 9, 12, 13, 13 ### Compliance Risk Management Foundations - Component: Compliance Risk Management Foundations - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - (a) Is there a formal approach for assessing and prioritizing key compliance risks for the following: - i. Return Filing; — 1 - ii. Payment processing; — 1 - iii. Collection enforcement — 1 - iv. Verification/audit — 1 - v. Taxpayer services — 1 - (b) Is there a program to improve the tax register quality? — 1 - (c) Are PIT/CIT/VAT/Other tax gaps produced? — 2 - (d) Are electronic invoices used to monitor compliance? — 2 - (e) Are random audits conducted? — 1 - (f) Are there computer-based systems for 3rd party data? - i. Employer wage and salary information; — 1 - ii. Financial Institutions; — 1 - iii. Any other category — 1 - (g) Does the administration undertake automated verifications? (administration must provide a number of automated verifications undertaken) — 3 - (h) Are the following payments to individuals reported to the administration: - i. Salaries and wages; — 2 - ii. Dividends/Interest; — 1 - iii. Any other category? — 1 - (i) Does the administration have a Large Taxpayer Office/Program? — 1 - ISORA form/code mappings: - 2B, 2B, 2B, 2B, 2B, 5, 9A, 9A, 9B, 9B, 9B, 9B, 6A, 6A, 6A, 4 - 1, 1, 1, 1, 1, 4, 7.a, 7.b, 7.c, 7.d, 8.b, 6, 1.a, 1.b, 1.c – 1.k, 3.b.iv, 5.a, 5.b, 5.c, 5.d – 5.i, 1 ### Degree of Digitization - Component: Degree of Digitization - Weighted maximum score 25 - ISORA 2018 Questions / Form / Question: - (a) Are either of the following innovative technologies in place: blockchain/Artificial Intelligence? — 1 - (b) Is an e-registration channel available? — 1 - (c) Are e-filing channels used for PIT/CIT/VAT/PAYE? (administration must provide numbers of returns e-filed) — 3 - (d) Are e-payment channels used for PIT/CIT/VAT/PAYE? (administration must provide numbers of e-payments) — 3 - (e) Is e-filing mandatory? — 2 - (f) Is e-payment mandatory? — 2 - (g) Which of the following web-based services are available? - i. Online services, e.g. updating information, making requests; — 3 - ii. Integrated taxpayer accounts? — 3 - (h) Does the administration provide mobile applications to access taxpayer account information? — 1 - (i) Is ‘joined up all of government services’ high priority? — 1 - (j) Is making third party data visible to taxpayers high/medium priority? — 2 - (k) Are there computer based systems for managing third party data? — 1 - (l) Are automated verifications undertaken? (administration must provide a number for automated verifications undertaken) — 2 - ISORA form/code mappings: - 2B, 5, 6A, 6B, 6A, 6B, 7, 7, 7, 7, 9A, 9B, 9B - 5.a, 5.c, 3.a.i, 9.b – 9.d, 4.a, 4.b, 3.b, 1.b, 8.d, 8.c, 8.h, 1.c, 5.c, 1.a – 1.k, 3.b.iv *ISORA 2018 — Annex tables reporting component weights, itemized ISORA 2018 questions, and weighted maximum scores as presented in Annex 3. Composition of Indices* --- _Source: https://www.imf.org/-/media/files/publications/dp/2021/english/uraisraea.pdf_