## vitara002ea ## Source details **Canonical URL:** [vitara002ea](https://www.imf.org/-/media/files/publications/manuals-and-guides/2024/english/vitara002ea.pdf) ## Other formats - [Markdown version](/-/media/files/publications/manuals-and-guides/2024/english/vitara002ea.pdf.md) - [Structured JSON version](/-/media/files/publications/manuals-and-guides/2024/english/vitara002ea.pdf.json) --- ### Features of Good Reform Management - Attainment of political support for the reform program - Strong commitment and active involvement by the Executive Leadership Team (ELT) in the development and execution of the reform program - An effective reform management infrastructure with clear roles and responsibilities of key players; reform programs require different governance and management arrangements than those used in managing a tax administration’s day-to-day operations - Close attention to project planning, change control, and management of project risks - Adequate funding and effective use of resources - Rigorous monitoring and reporting of progress - Attention to stakeholder engagement and involvement—including internal and external communication and consultation—to ensure tax administration staff and external stakeholders are well prepared and ready for the changes when they happen ### Key Terms, Nature, and Scope of Reform - Reform: improving or changing something that is not working well, out-of-date, or failing to meet desired objectives; transformational and durable - Reform characteristics: - Modernization: bringing processes, working methods, and services up to speed with current knowledge and technologies - Far-reaching: changes with wide impact inside the organization and its environment - Fundamental: involving the most basic and important parts of an organization - Tax administration reform objectives: - improve collection - improve transparency - increase the scope of its mandate and functions - increase the overall performance - Reform typically crosses organizational boundaries and impacts staff across the organization, business community, and taxpayers ### Typical Reform Areas - Organizational structure (headquarter and field office levels) - IT systems, including hardware, software, and data - External relationships with businesses, taxpayers, and advisors - Human resource management (HRM) practices, including organizational culture change (e.g., service orientation) - Core functions, work processes, and jobs performed by staff - Legal framework for administering taxes ### Drivers of Reform - External drivers: - Government initiatives (tax policy changes, e-government programs, civil service reforms) - Need to adopt new technologies for digital-age business - Community demands for better services - Pressure to adapt to growing complexity of business arrangements and transactions - Major shocks (natural disasters, “pandemics”) - Internal drivers: - Senior management pursuing reform opportunities from strategic planning - Suboptimal performance results - Adoption of international good practices following diagnostic assessments (e.g., TADAT) ### Reform Program — Definition and Objectives - Definition: a comprehensive plan of reform activities within a medium-term timeframe, generally three to five years - A reform program: - Maps specific reform areas required to achieve strategic goals - Establishes reform objectives and describes reform deliverables and outcomes - Identifies specific reform projects and establishes indicative project budgets - Sets priorities and sequencing within an implementation timeline - Approval: by head of tax administration; may require higher authority approval when large budgets, legislative changes, cross-agency reforms, or major taxpayer impacts are involved - IT feature: Information technology tends to feature strongly; attention required for broader impacts on work practices, staffing, skills, and external stakeholders - Scale: countries with low administrative and financial capacity tend to have smaller targeted programs rather than sweeping agendas ### Reform Project — Definition - A reform project: body of work to implement a specific product or service (deliverable); defined start and finish date and unique scope - Carried out by a project team headed by a project manager - May include development and implementation of new compliance and service initiatives or introduction of a new tax ### Linking the Reform Program to the Strategic Plan - Reform program must be anchored in and consistent with the tax administration strategic plan; require a “clear line of sight” from lower-level plans to higher-level plans - If no strategic plan exists, the reform program becomes a de facto strategic plan - Typical reform drivers (examples): improved compliance levels; reducing taxpayers’ compliance costs; more efficient use of resources; delivery of a government initiative - Strategic-plan hierarchy (illustrative): - Government Plan (Medium-Term (4−6 years)) - Ministry of Finance’s Strategic Plan (Medium-Term (3−5 years)) - Tax Administration’s Strategic Plan (Medium-Term (3−5 years)) - Tax Administration’s Multiyear Focused Plans (e.g., Reform Program, Compliance Risk Management Plan, Information Technology Plan, Human Resources Plan) - Tax Administration’s Annual Plans - Local Operational Plans (Field Office Plans, Division/Unit/Team Plans, Individual Plans) - Reform themes, activities, or projects must not compete with or conflict with the strategic plan ### What a Reform Program Should Exclude - Exclude: - Operational activities (day-to-day work: registration, filing, payments, reporting, audits, collections) - Annual system changes or continuous improvement projects (routine or cyclical IT updates or incremental process modifications) - Operational activities must be maintained during reform and managed separately; do not implement reforms as “business as usual” - Routine or cyclical work is not reform; bundling routine changes into a reform program indicates misunderstanding ### Developing the Reform Program — Overview and Six Steps - Purpose: provide detail on projects required, sequencing and priority, timeline, and costs to deliver strategic goals - Development sequence: Drivers for reform → Strategic plan reflects reform goals → Reform program sets out plan to deliver reforms - Establish a small team to develop the detailed reform program; this team may form the nucleus of the Reform Program Management Unit - Six iterative steps: 1. Establish the reform goals and objectives and determine reform timeline 2. Identify the projects needed, priorities, dependencies, and interrelationships 3. Finalize high-level costings and prepare the business case 4. Approve the reform program 5. Establish governance arrangements 6. Communicate the approved reform program Step 1 — Establish Reform Goals, Objectives, and Timeline - Goals: outcome statements derived from reform drivers (example: “modernize the tax administration”) - Objectives: building blocks under each goal; each objective must have success criteria - Identify high-level projects for high-level costing; detailed plans follow program approval - Timeline considerations: - Time for projects plus administrative approvals, procurement, legal changes, financing - Typically three to five years - If > five years, break into phases and determine focus for each phase (example phases): - Phase 1 (years one to four): Establish foundations (new core tax administration IT system, improvements to headquarters) - Phase 2 (years five to seven): Build on foundations (risk-based compliance processes, stronger central management of field operations) - Reforms can be managed over a three-to-five-year horizon, or incrementally over 10–20 years through a series of smaller targeted programs - Follow same steps if expected completion in less than three years Step 2 — Identify Projects, Prioritize, and Map Dependencies/Interrelationships - Each project must have a dedicated project manager, timeframe, resource allocation, and approved scope - Prioritization framework (four-criteria approach): - Mandatory Projects: required by legislation or government policy; building blocks - High Priority: reform-critical projects; essential enabling projects - Medium Priority: important but reform objectives could be achieved (to a lesser degree) without them - Low Priority: desirable but reform objectives can be met without them - Consider relative cost and benefit, implementation capacity, short-term gain projects to demonstrate success - Dependencies: tasks or projects that must be completed by others (example: VAT IT system depends on enactment of VAT law) - Interrelationships: projects requiring enabling capabilities from other projects (example: business readiness interrelated with IT changes) - Develop timelines after mapping dependencies and interrelationships; use a dependency matrix Step 3 — High-Level Cost Estimates and Business Case - Cost estimate categories: - Direct Project Costs (examples: salaries for project managers and staff; hardware and software; external contractor costs; costs for program monitoring and reporting) - Indirect Project Costs (examples: accommodation and equipment; travel; program assurance and reviews) - Contingency (generally a percentage of total direct and indirect costs; typically 5 percent–10 percent, but can be higher depending on risk) - Aggregate costing: sum direct, indirect, and contingency for all projects to get overall program cost - Business case: demonstrates cost can be met and articulates benefits; may require Ministry of Finance proposals or donor financing - Business case components: - Benefits: tangible and intangible - Costs: estimated cost to deliver the reform - Typical financial/tangible benefits: - Staff savings - Hardware and software savings - Productivity improvements - Cost avoidance - Increased compliance or revenue - Typical intangible benefits: - Increased electronic take-up - Ease of use of system - Increased user satisfaction - Risk mitigation Step 4 — Approving the Reform Program - Submit reform program to ELT for review and endorsement; may require multiple sessions - Keep ELT informed to ensure alignment and ownership - Final decision by head of tax administration or appropriate authority - Formal reform program document may be published; detailed costings and business case submitted separately (may include commercial-in-confidence information) - High-level program cost and intended benefits can be communicated as required Step 5 — Establish Governance Arrangements - Approval of program should establish governance arrangements and a Reform Program Management Unit - The small team that developed the program generally forms the nucleus of the Reform Program Management Unit - Early tasks include identifying program risks and mitigation actions - Governance structure and risk management detailed in Chapter 3 Step 6 — Communicating the Reform Plan - Reform Program Management Unit assists ELT to inform staff and key stakeholders - Reform roadmap: effective communication tool; based on reform program plan and captures: - Reform goals and objectives - Current state of the tax administration - How the revenue agency will make the changes - Future state when reforms are implemented - Roadmap is typically a one- or two-page diagrammatic summary ### Program Management Framework and Critical Success Factors - Reform program management: centralized arrangements to control and coordinate multiple related reform projects holistically; includes oversight and management to ensure adherence to approved goals, objectives, scope, timelines, priorities, sequencing, budgets, and quality standards - Reform programs are complex, riskier, and harder to manage than day-to-day operations; require specialist management skills and approaches - Critical success factors: - Strong support from government (e.g., Cabinet and the Ministry of Finance) - Visible commitment and determination by the ELT - Wide agreement and understanding among managers of the program’s scope, objectives, deliverables, schedule, and costs - Adequate funding and resources - Clearly defined roles, responsibilities, and accountabilities - Close attention to project planning, change control, risk management, and resource use - Rigorous monitoring and reporting of progress and project spending - A committed donor-partner such as an international development agency - Proactive communication and consultation preparing staff and external stakeholders ### Program Management Responsibilities and the Constraints Triangle - Disciplined oversight over: 1. Scope of work (as defined in approved reform program) 2. Time available to deliver reform products and services 3. Cost of the program (money and other resources) 4. Quality of end products, services, and outcomes - Constraints Triangle: Time, Cost, Scope constrain Quality; changes in Time, Cost, or Scope require corresponding changes in others to preserve Quality - Program management delivers savings by: - Monitoring progress and spending against approved plans - Stopping activities that do not align with objectives (“scope creep”) - Minimizing duplication through common processes, methods, and tools - Deploying right resources to right projects at right time - Assessing program risks and developing mitigation strategies and contingency plans - Resolving conflicts and issues quickly - Paying attention to project sequencing and interdependencies ### Organizational Roles in Practice - Key player categories: - Reform leadership - Program governance - Project management Reform leadership - Key players: Minister (or other government oversight body); Tax administration head; Executive leadership team (ELT) - ELT responsibilities: - Commission preparation of the reform program, give direction on priorities, explore funding - Approve program, establish governance arrangements (steering committee, reform program head) - Routinely seek assurance from steering committee that program is on track - Keep Minister informed through tax administration head - Engage staff and external stakeholders to sell benefits and prepare for changes - Receive program post-implementation evaluation report at program conclusion Program governance - Key players: Reform program head; Reform program steering committee; Reform program management unit Reform program head - Typically senior-level; for large programs equivalent to deputy head and full-time; for smaller programs may be added to existing role - Responsibilities: - Control and coordinate major reform activity; all reform project managers report to the reform program head - Wide-ranging authority to direct priorities and redeploy resources - Make key decisions within agreed boundaries; involve steering committee in serious situations - Resolve conflicts and issues that put program at risk - Report to and be full voting member of the steering committee; supported by the management unit Reform program steering committee - Principal oversight and decision-making body - Recommended size: - No larger than eight to ten members; any more makes it harder to manage - For smaller tax administrations, four to five members are recommended - Potential composition: - Reform program head; deputy head; HQ department heads (“business owners”); head of a major field office; senior advisors as required - Typical practices: - Head of tax administration often member and chairperson - Meets regularly (e.g., monthly) - Key governance functions: - Approve project initiation documents (baseline for scope, schedule, budget) - Seek assurance program is on track to deliver benefits and outcomes - Ensure program focus on strategic goals; stop unaligned activities - Decide on “change requests” materially affecting scope, timeline, or budget - Sign off on critical phases and approve significant funding drawdowns - Ensure program and project risk assessments and contingency plans are in place - Ensure staff and external stakeholders are prepared for changes - Resolve conflicts and approve project closures Reform program management unit - Full-time staff with adequate budget and facilities; supports reform program head and steering committee - Acts as guardian of approved reform program by: - Ensuring project plans align to program objectives and deliverables - Routinely monitoring project progress, dependencies, and critical path; gathering monthly progress reports and producing an executive dashboard - Performing secretariat role for steering committee (agendas, briefing papers, finance reports, recording decisions) - Monitoring project spending and resource usage against approved budgets - Ensuring compliance with quality assurance processes, standardized methods and tools - Administering change control and issues resolution - Ensuring risk assessments and mitigation strategies, coordinating donor partners and technical assistance - Negotiating and managing external supplier contracts, ensuring procurement compliance and integrity - Definition: critical path as sequence of projects with dependencies essential to delivering overall program on time and within budget ### Project Management: Key Players and Structures - Project-level key players: - Reform project managers - Project-level steering committee or business reference group (for large/high-risk projects) - Project sponsor Reform project managers - Full-time project managers responsible for delivering products and services within approved time, budget, quality, and scope constraints; overseen by reform program head and assisted by management unit - Responsibilities: - Lead day-to-day project management - Develop detailed project plans - Monitor and report progress against milestones and project critical path - Manage project budgets and deploy resources - Manage project risks, issues, and change control - Implement quality assurance and program documentation requirements - Collaborate with related projects to monitor dependencies - Keep business owners and stakeholders informed; escalate significant issues to reform program head Project-level steering committee or business reference group - Large/high-risk projects may require either; steering committee decided by reform program steering committee - Business reference group functions: - Provide assurance of project deliverable design - Provide assurance that testing reflects operational work - Assist in resolving design issues during development and test - Assist implementation of change management strategy, including staff upskilling - Advise and guide resolution of issues - Project-level steering committee considerations: - Introduces extra management layer and potential complexity; business reference group is preferred in many cases (noting IT-related projects as common exceptions) - Keep size small; maximum of five members recommended - Chair should be project sponsor (manager of operational area most affected) - Project sponsor responsibilities: - Oversee and sign-off business case and project plan - Champion and lead communication about the project - Maintain close relationship with project manager and monitor progress to ensure focus on agreed business objectives and benefits ### Project Lifecycle: Phases and Key Practices - Project is temporary with defined start/finish and unique scope; lifecycle comprises five phases: - Project Initiation - Project Planning - Project Execution - Project Closure - Evaluation Project Initiation - Purpose: identify projects needed to deliver reform goals and provide details per project: scope, new products/services, timeline, resources, estimated cost - Conditions to commence Project Planning: 1. A project manager must be appointed (usually by reform program head in collaboration with steering committee and project sponsor) 2. Steering committee must decide whether a project-level steering committee or business reference group is needed Project Planning - Purpose: plan work in enough detail to ensure clarity - Key planning questions: - WHY: objectives and benefits - WHAT: project deliverables - WHAT: scope (in-scope and out-of-scope) - HOW MUCH: budget - WHO: project organization - WHAT IF: risk management - WHEN: dependencies, timelines, milestones - Best practice: develop a Project Initiation Document (PID) to answer key questions and act as baseline for performance, scope, schedule, and budget - PID characteristics and typical components for large projects: - Project objectives (measurable) - Project scope (in-scope and out-of-scope, workstreams, boundaries) - Project deliverables (clearly defined) - Project benefits (quantified and measurable) - Project budget (explain variances from initial estimates) - Project timeline (Gantt Chart with activities, start/finish dates, milestones, dependencies, current status) - Project change control (controls to manage scope, cost, time, and quality changes) - Project risk management (summary of known risks and risk register with likelihood, impact, and management actions) - Project approach (development methodology; examples: “waterfall” or “agile”) - Project organization (team structure, workstream allocation, roles/responsibilities) - Quality assurance (compliance with quality standards) - Stakeholder engagement (identify stakeholders, assess interest/influence, align communications with reform program strategy) - Major dependencies (describe significant dependencies and treat external uncertainty as a risk) - Human resources (assess required skills, timing, and resource sources) Project Execution - Focus: creation and implementation of new products and services within PID constraints - Project manager responsibilities during execution: - Ensure proper resourcing and clarity of expected achievements and standards - Monitor spending, timelines, and milestones; report regularly to reform program head and steering committee - Ensure design can deliver expected benefits; obtain sponsor sign-off - Enforce formal change control to manage deviations from PID - Keep risks and issues under control and escalate as necessary - Ensure tax administration can support new products/services after completion and that change management prepares staff and stakeholders - Phase completion criterion: handover of new products/services to end-users and formal acceptance of deliverables; upon end-user confirmation, steering committee can approve transition to Project Closure Project Closure - A project can be closed once any of the following are confirmed: - Acceptance of the project’s deliverables - Achievement of PID objectives - Acknowledgment that the project has nothing more to contribute (early closure) - Project manager closure activities: - Review performance against the PID and prepare a project closure report for steering committee approval - Plan for an objective post-implementation evaluation - Assist with reallocation of project team members to other reform projects or operational roles Post-implementation Evaluation (Evaluation phase) - Purpose (project and program levels): - Evaluate whether PID objectives were met - Determine how effectively the project was run - Identify improvements for the future - Evaluation principles: - Accountability central; evaluation should be objective, constructive, and undertaken by an independent person not directly involved in project activities - Timing: - Ideally conducted as close to project end as possible while memories remain fresh - If too early to assess effectiveness for some deliverables, conduct evaluation in two stages: 1. Stage 1: evaluate project management aspects (time, cost, scope, quality) and note lessons learned 2. Stage 2: assess effectiveness in meeting objectives and achieving the benefits set out in the PID *Source: vitara002ea* ### CHAPTER 1. ### CHAPTER 1. ### Features of Good Reform Management - Attainment of political support for the reform program - Strong commitment and active involvement by the Executive Leadership Team (ELT) in the development and execution of the reform program - An effective reform management infrastructure with clear roles and responsibilities of key players; reform programs require different governance and management arrangements than those used in managing a tax administration’s day-to-day operations - Close attention to project planning, change control, and management of project risks - Adequate funding and effective use of resources - Rigorous monitoring and reporting of progress - Attention to stakeholder engagement and involvement—including internal and external communication and consultation—to ensure tax administration staff and external stakeholders are well prepared and ready for the changes when they happen ### Key Terms and Definitions — "Reform" and Characteristics - Reform means improving or changing something that is not working well, out-of-date, or failing to meet desired objectives. - Reform is transformational and yet durable, since it is intended to have an enduring effect. - Reform can be described as: - A process of modernization, bringing processes, working methods, and services up to speed with current knowledge and technologies - Far-reaching or sweeping, with changes having a wide impact both within an organization and the environment in which it operates - Fundamental, involving the most basic and important parts of an organization ### Role of Senior Management in Reform - Taking a fresh look at the way things are done - Having an open mind to opportunities for improvement - Challenging the way the organization has always done things—for example, existing structure, processes, procedures, service orientation, and approaches to audits - Bringing together the resources to innovate ### Nature and Scope of Tax Administration Reform - Tax administration reform involves making fundamental changes to a tax administration and its systems of administration to: - improve collection - improve transparency - increase the scope of its mandate and functions - increase the overall performance - Reform typically crosses organizational boundaries and impacts staff across the organization, and often impacts the business community and taxpayers. ### Typical Reform Areas (selected examples) - Organizational structure—i.e., the way the tax administration is organized and managed at headquarter and field office levels - IT systems, including hardware, software, and data - External relationships, particularly in the way the tax administration interacts with business and other taxpayers, and their advisors - Human resource management (HRM) practices, including changing organizational culture (e.g., to become more service-oriented) - Core functions, work processes, and jobs performed by staff - Legal framework for administering taxes ### Drivers of Reform - External drivers: - Government initiatives, such as tax policy changes (which may involve introduction of a new tax or taxes), e-government programs, and civil service reforms (e.g., specific measures aimed at improving efficiency, accountability, and governance of government agencies, including addressing corruption and strengthening the professionalism of tax administrations) - The need for tax administrations to adopt new technologies to keep pace with the way business is done in the digital age - Community demands for better services and support from their tax administrations - Pressure on tax administrations to continually modify their approaches to keep abreast with the growing complexity of business arrangements and transactions - Major shocks to the economy such as natural disasters or “pandemics” - Internal drivers: - The desire of senior management to pursue reform opportunities identified during a tax administration’s strategic planning process - Suboptimal performance results - The decision of senior management to adopt international good practices in the tax administration to address weaknesses identified by diagnostic assessments of the tax administration’s performance (e.g., evaluations using the Tax Administration Diagnostic Assessment Tool [TADAT]) ### Reform Program — Definition and Objectives - A reform program is a comprehensive plan of reform activities to be done within a medium-term timeframe, generally three to five years. - Specifically, a reform program: - Maps out the specific areas of reform necessary to achieve the tax administration’s strategic goals as set out in its strategic plan - Establishes the reform objectives and describes the products and services to be delivered (commonly referred to as reform deliverables) and outcomes to be achieved - Identifies the specific reform projects toward achieving the objectives and deliverables and establishes indicative project budgets - Sets the priorities and sequencing for development within an implementation timeline - Reform programs are approved by the head of the tax administration but may require approval by a higher authority (e.g., the Minister, Cabinet, or other oversight body), especially where a large budget is involved, legislative changes are required, reforms involve another agency (e.g., Customs), or a major impact on taxpayers is expected. - Information technology tends to feature strongly in most tax administration reform programs; attention is required to the broader impact of information technology on work practices, staffing levels, jobs, skill requirements, and the effect on external stakeholders. - The scale of reform programs varies from country to country. Countries with low administrative and financial capacity tend to have smaller targeted reform programs rather than sweeping reform agendas. ### Reform Project — Definition - A reform project comprises the body of work to be done to implement a specific product or service (deliverable)—or in some cases, several deliverables—identified in the reform program. - Each reform project within the reform program has a defined start and finish date and unique scope of work. - The work is carried out by a project team headed by a project manager. - A reform project may include development and implementation of new compliance and service initiatives, or even the introduction of a new tax. *REFORM MANAGEMENT FUNDAMENTALS: SETTING UP A REFORM PROGRAM—Introduction* ### CHAPTER 2. ### CHAPTER 2. ### Linking the Reform Program to the Strategic Plan - The reform program must be anchored in, and consistent with, the tax administration strategic plan; there must be a “clear line of sight” from lower-level plans to higher-level plans. - If no strategic plan exists, the reform program becomes a de facto strategic plan; in that case the driver for change is the starting point. - Typical reform drivers include: - Improved compliance levels - Reducing taxpayers’ compliance costs through improved taxpayer service and minimizing the intrusion of tax officials in taxpayer business operations - More efficient use of resources - Delivery of a government initiative - A combination of two or more of these or other areas - The strategic-plan hierarchy (illustrative) shows planning from government to individual levels: - Government Plan (Medium-Term (4−6 years)) - Ministry of Finance’s Strategic Plan (Medium-Term (3−5 years)) - Tax Administration’s Strategic Plan (Medium-Term (3−5 years)) - Tax Administration’s Multiyear Focused Plans (e.g., Reform Program, Compliance Risk Management Plan, Information Technology Plan, Human Resources Plan) - Tax Administration’s Annual Plans - Local Operational Plans (Field Office Plans, Division/Unit/Team Plans, Individual Plans) - Reform themes, activities, or projects must not compete with or conflict with the strategic plan. ### What a Reform Program Should Exclude - Two types of work should not be classified as reform: - Operational activities (day-to-day work: registration, filing, payments, reporting, audits, collections) - Annual system changes or continuous improvement projects (routine or cyclical IT updates or incremental process modifications) - Operational activities: - Must be maintained during reform and managed separately from reform projects. - Subject matter experts will be in demand by both operational and reform streams. - Operational areas will implement the new ways of working after reforms are developed. - Reforms should not be implemented as “business as usual” because operational pressures will overwhelm reform delivery. - Example: allocating a reform project to an operational registration unit without extra staff risks missed project deadlines and nondelivery. - Annual system changes vs. reform: - Reform implies transformational changes; routine or cyclical work is not reform. - Bundling routine changes into a reform program indicates a misunderstanding or an attempt to maintain the status quo. ### Developing the Reform Program — Overview - Purpose: provide detail on projects required, sequencing and priority of projects, timeline, and costs to deliver the strategic goals. - Sequence of developing the reform program: Drivers for reform → Strategic plan reflects the reform goals → Reform program sets out the plan to deliver the reforms. - A small team should be established to develop the detailed reform program; these staff may form the nucleus of the Reform Program Management Unit. ### Six Steps in Developing a Reform Program - The six steps are iterative; new steps can require revising earlier steps. The steps are: 1. Establish the reform goals and objectives and determine reform timeline 2. Identify the projects needed, priorities, dependencies, and interrelationships 3. Finalize high-level costings and prepare the business case 4. Approve the reform program 5. Establish governance arrangements 6. Communicate the approved reform program Step 1 — Establish Reform Goals, Objectives, and Timeline - Goals: outcome statements derived from reform drivers (example goal: “modernize the tax administration”). - Objectives: building blocks under each goal (example objectives under modernization: improve use of technology; strengthen headquarters). - Each objective must have success criteria to evaluate achievement. - After goals and objectives, identify high-level projects sufficient for high-level costing; detailed project plans come after program approval. - Timeline considerations: - Time to do projects plus time for administrative approvals, procurement, legal changes, financing. - Typically, the timeline is three to five years. - If timeline > five years, break into phases and determine a focus for each phase (example phases): - Phase 1 (years one to four): Establish foundations (new core tax administration IT system, improvements to headquarters). - Phase 2 (years five to seven): Build on foundations (risk-based compliance processes, stronger central management of field operations). - Reforms can be managed over a three-to-five-year horizon, or incrementally over 10–20 years through a series of smaller targeted programs. - Note: In situations where a reform is expected to be completed in less than three years, the same steps should still be followed. Step 2 — Identify Projects, Prioritize, and Map Dependencies/Interrelationships - Projects are the delivery mechanism: each must have a dedicated project manager, timeframe, resource allocation, and approved scope. - Projects may be eliminated if costs do not justify benefits. - Produce a Reform Program Plan grouping projects under goals and objectives; projects are formally initiated after program approval. - Prioritization framework (four-criteria approach): - Mandatory Projects: must be completed due to legislative or government policy requirements; building blocks for reforms. - High Priority: reform-critical projects; cannot achieve reform without these; essential enabling projects. - Medium Priority: important but reform objectives could be achieved (to a lesser degree) without the project. - Low Priority: desirable but reform objectives can be met without the project. - Additional considerations to finalize project candidates: - Relative cost and benefit (further established in Step 3). - Assessment of implementation capacity; limited capacity may require external assistance and extra cost. - Projects that can deliver short-term gains to demonstrate success while keeping the medium-term agenda on track. - Dependencies: - A project cannot be completed unless another project or task is completed (e.g., VAT IT system depends on enactment of VAT law). - Dependencies commonly relate to deliverables, infrastructure supply, or resources. - Failure to manage dependencies results in nondelivery of projects. - Interrelationships: - Projects requiring enabling capabilities from other projects (e.g., business readiness interrelated with IT changes). - Failure to manage interrelationships will likely result in suboptimal program outcomes. - Develop timelines after mapping dependencies and interrelationships (dependency matrix recommended). Step 3 — High-Level Cost Estimates and Business Case - Cost estimates include three categories: - Direct Project Costs (examples: salaries for project managers and staff; hardware and software; external contractor costs; costs for program monitoring and reporting) - Indirect Project Costs (examples: accommodation and equipment; travel; program assurance and reviews) - Contingency (generally a percentage of total direct and indirect costs; typically 5 percent–10 percent, but can be higher depending on risk) - Aggregate costing approach: - Estimate direct costs plus contingency for each project. - Sum individual project costs (direct, indirect, plus contingency) to get overall program cost. - Business case: - Demonstrates that the cost of the reform program can be met and articulates benefits. - Reform is an investment by the government or tax administration; may require proposals to Ministry of Finance or other ministries, or donor financing. - Business case components: - Benefits of the investment: tangible and intangible benefits. - Cost of the investment: estimated cost to deliver the reform. - Typical financial/tangible benefits: - Staff savings - Hardware and software savings - Productivity improvements - Cost avoidance - Increased compliance or revenue - Typical intangible benefits: - Increased electronic take-up - Ease of use of system - Increased user satisfaction - Risk mitigation - A guide to key business case elements is provided in Appendix 2 (document reference in source). Step 4 — Approving the Reform Program - Submit the reform program to the Executive Leadership Team (ELT) for review and endorsement; this may require several sessions. - Keep ELT informed at each step to ensure alignment and ownership. - Final decision made by the head of the tax administration or the appropriate authority. - Formal reform program document (for staff and external stakeholders) may be published; detailed costings and business case should be submitted separately and may include commercial-in-confidence information. - High-level program cost and intended benefits can be communicated as required. Step 5 — Establish Governance Arrangements - Reform programs require governance and management arrangements different from day-to-day operations. - Approval of the program should entail establishing governance arrangements and a Reform Program Management Unit. - The small team that developed the program generally forms the nucleus of the Reform Program Management Unit. - Early tasks include identifying program risks and mitigation actions. - Governance structure and risk management are covered in more detail in Chapter 3. Step 6 — Communicating the Reform Plan - The Reform Program Management Unit assists the ELT to inform staff and key stakeholders. - A reform roadmap is an effective communication tool; it is based on the reform program plan and captures: - Reform goals and objectives - Current state of the tax administration that will be the focus of the reform - How the revenue agency will make the changes - Future state of the tax administration when the reforms are implemented - The roadmap is typically a one- or two-page diagrammatic summary of the reform program. *Source: CHAPTER 2. Developing the Reform Program (vitara002ea - CHAPTER 2.)* ### CHAPTER 3. ### CHAPTER 3. Establishing a Program Management Framework ### Context and importance of reform program management - Reform program management consists of centralized management arrangements designed to control and coordinate the work of multiple related reform projects in a holistic way. - It entails oversight (often referred to as “governance”) and management of the entire reform program to ensure that all reform projects and activities adhere to the goals, objectives, scope, timelines, priorities, sequencing, budgets, and quality standards set out in the approved reform program. - Reform programs are complex, riskier and harder to manage than normal day-to-day operations and require specialist management skills and approaches. - Without effective program management, reform programs are likely to falter or fail, leading to wasted public money, missed delivery deadlines, and loss of confidence from government, donors, and development partners. - Success is achievable with the right management framework; examples include implementation of a new “revenue authority” or large-scale IT system. ### Critical success factors for reform - Strong support for the reform program from the government (e.g., Cabinet and the Ministry of Finance) - Visible commitment and determination to reform by the tax administration’s ELT - Wide agreement and understanding among managers of the tax administration’s reform program—its scope, objectives, deliverables, implementation schedule, and costs - Provision of adequate funding and other resources to implement the reforms - Clearly defined roles, responsibilities, and accountabilities of all key players - Close attention to project planning, change control, risk management, and effective use of resources - Rigorous monitoring and reporting of progress and project spending - A committed donor-partner such as an international development agency - Proactive communication and consultation that prepares the tax administration staff and external stakeholders for the upcoming changes ### Program management responsibilities and the Constraints Triangle - Program management requires close monitoring of: - Preparations to get the tax administration and stakeholders ready for change - Timely responses to program risks - Efforts to ensure relationships with government and development partners remain intact - Processes and actions to keep the reform program on track to deliver outcomes - Disciplined oversight required in relation to four things in particular: 1. Scope of work to be done (as defined in the approved reform program) 2. Time available to deliver the expected reform products and services 3. Cost of the program (in money and other resources) 4. Quality of the end products, services, and outcomes - Constraints Triangle (Figure 3.1): Time, Cost, Scope constrain Quality. Changes to Time, Cost, or Scope necessitate corresponding changes in the others to preserve Quality. - Ways good program management delivers savings in time and costs: - Tightly monitoring progress and spending against approved project plans - Stopping activities that do not align with the reform program’s objectives or fit within the approved scope (“scope creep”) - Minimizing duplication of effort by using common processes, methods, and tools across all reform projects - Deploying the right resources to the right projects at the right time - Avoiding costly surprises by assessing program risks and developing mitigation strategies and contingency plans - Resolving conflicts and issues quickly - Delivering results faster by paying close attention to project sequencing and interdependencies ### How reform program management works in practice: organizational roles - Key player categories: - Reform leadership - Program governance - Project management Reform leadership - Key players: - Minister (or other government oversight body) - Tax administration head - Executive leadership team (comprising the tax administration head and deputy heads) - ELT commissions preparation of the reform program, gives direction on reform priorities, and explores funding options. - Once finalized, the reform program is approved by the tax administration head and submitted to the Minister or other oversight body for endorsement. - Post-endorsement actions for ELT: - Establish governance arrangements, including a reform program steering committee and appointing a reform program head - Remain a key player in reform efforts and routinely seek assurance from the steering committee that the reform program is on track to deliver agreed benefits and outcomes - Keep the Minister informed of reform progress through the tax administration head - Engage with tax administration staff and external stakeholders to sell benefits of reform and prepare them for changes - At program conclusion, the tax administration head and ELT should receive a program post-implementation evaluation report (see Chapter 4) and act upon findings and lessons learned. Program governance - Key players: - Reform program head - Reform program steering committee - Reform program management unit Reform program head - Typically at a senior level; for large reform programs often equivalent to a deputy head and undertaken as a full-time role; for smaller programs may be added to an existing senior-level role. - Responsibilities: - Control and coordinate all major reform-related activity; all reform project managers report to the reform program head - Wide-ranging authority (e.g., directing priorities and redeploying reform program resources) - Key decision-maker within boundaries agreed with the tax administration head and steering committee - Consider options and decide remedial action for off-track activities; involve the steering committee in serious situations - Resolve conflicts and issues that put the reform program at risk - Reports to and is a full voting member of the reform program steering committee; supported by the reform program management unit and collaborates with ELT and HQ department heads. Reform program steering committee - Principal oversight and decision-making body on reform-related matters. - Recommended size: - No larger than eight to ten members; any more makes it harder to manage. - For smaller tax administrations, four to five members are recommended. - Potential composition in addition to reform program head: - A deputy head of the tax administration - HQ department heads (“business owners”) responsible for preparing their staff for changes - The head of a major field office - Senior advisors, as required - Typical practices: - In many administrations the head of the tax administration is also a member and performs the role of chairperson. - Meets on a regular (e.g., monthly) basis. - Key governance functions: - Approving project initiation documents (establishing baseline for scope, schedule, and budget for each project) - Seeking assurance that the program is on track to deliver agreed benefits and outcomes - Ensuring program focus on strategic goals; stopping activities unaligned to strategic directions and approved reform program - Considering and deciding on “change requests” that materially affect a project’s scope, timeline, and/or budget - Signing off on critical phases completed and approving significant funding drawdowns and assignment of resources - Seeking assurance on program and project risk assessments, mitigation strategies, and contingency plans - Ensuring preparation of tax administration staff and external stakeholders for upcoming changes - Resolving conflicts and approving project closures Reform program management unit - Comprising full-time staff with adequate budget and facilities; provides support to the reform program head and steering committee. - Acts as guardian of the approved reform program by: - Ensuring all project plans have a clear line of sight to reform program objectives and deliverables - Routinely monitoring progress of reform projects, including oversight of dependencies and the program critical path - Gathers monthly progress reports from project managers, collates into an executive dashboard, and highlights issues requiring decision by the reform program head and/or steering committee - Performs secretariat role for the steering committee, preparing agendas, briefing papers, finance reports, and recording decisions - Monitoring project spending and resource usage against approved budgets - Ensuring compliance with quality assurance processes and other program requirements, including use of standardized processes, methods, and tools - Administering change control and issues resolution processes - Ensuring risk assessments are completed for all projects and the overall reform program and that mitigation strategies and contingency plans are prepared and implemented, when needed - Coordinating activities of donor partners and technical assistance providers - Negotiating and managing external supplier contracts, ensuring compliance with government procurement guidelines and maintaining integrity standards - Note: The critical path is defined as the sequence of projects that have dependencies across those projects, which collectively are essential to delivering the overall program on time and within budget. The critical path determines the overall timeframe needed to deliver the reform program. ### Project management: key players and structures - Key players at project level: - Reform project managers - Project-level steering committee (relevant for large-scale and high-risk projects) - Project sponsor Reform project managers - Full-time project managers are responsible for delivering reform products and services within approved time, budget, quality, and scope constraints; their work is overseen by the reform program head and assisted by the reform program management unit. - Responsibilities: - Lead and manage reform projects day-to-day - Develop detailed project plans - Monitor and accurately report progress against key milestones and the project’s critical path to the reform program head - Manage project budgets and deploy resources - Manage project risks, issues, and changes to project constraints (scope, time, cost, and quality) - Implement quality assurance processes and meet program documentation and other requirements - Collaborate with related projects to ensure dependencies are monitored - Keep tax administration ‘business owners’ and other stakeholders informed and consult on design and implementation issues - Escalate significant issues to the reform program head for decision Project-level steering committee or business reference group - Large-scale and high-risk projects may require either a separate project-level steering committee or a business reference group; the reform program steering committee decides if needed. - Business reference group functions: - Provide assurance of the design of the project deliverable - Provide assurance that testing processes adequately represent operational work - Assist in resolving design issues detected in development and test phases - Assist with implementation of the change management strategy, including planning for upskilling staff - Advise and guide in resolving issues - Project-level steering committee considerations: - Adds an extra layer of management and may introduce unnecessary complexity; business reference group is the preferred alternative in many cases (noting IT-related projects as common exceptions). - If established, keep size as small as possible; a maximum of five members is recommended. - The project steering committee should be chaired by the project sponsor (manager of the operational area most affected by the reform). - Project sponsor responsibilities: - Oversee and sign-off on the business case for the project and the project plan - Champion and lead communication about the project internally and externally - Maintain close relationship with the project manager and monitor progress to ensure the project focuses on achieving agreed business objectives and benefits *CHAPTER 3. Establishing a Program Management Framework* ### CHAPTER 4. ### CHAPTER 4. Planning and Managing a Reform Project ### Project management lifecycle (overview) - A reform project is a temporary activity with a defined start and finish date and a unique scope of work; it ends once it has delivered the reforms it was established to develop and implement. - Examples of reform projects include development and implementation of: - “a new information technology system,” - “new work processes,” - “a new tax,” - “new ways of interacting with taxpayers.” - A reform project is carried out by a project team and led by a project manager. - The project management lifecycle comprises five key phases: - Project Initiation - Project Planning - Project Execution - Project Closure - Evaluation ### Project Initiation - Purpose: identify the projects needed to deliver reform goals and objectives and detail for each project: - Scope of work to be done - New products and services to be delivered - Timeline to deliver - Resources to be allocated - Estimated cost - The reform program should identify project interrelationships, dependencies, and implementation priorities to establish milestones for deliverables. - Conditions to commence Phase 2 (Project Planning) for each project: 1. A project manager must be appointed (usually by the reform program head in collaboration with the reform program steering committee and the project sponsor). 2. The reform steering committee must decide whether a project-level steering committee or business reference group is needed. ### Project Planning - Purpose: plan the work in enough detail to ensure clarity on what is required. - Key planning questions (Figure 4.2): - WHY does the project need to be done? (objectives and benefits) - WHAT specific products and services will be delivered? (project deliverables) - WHAT is the project’s scope of work? (in-scope and out-of-scope) - HOW much will the project cost? (budget) - WHO will do the work? (project organization) - WHAT IF things go wrong? (risk management) - WHEN will critical work be completed? (dependencies, timelines, and milestones) - Best practice: develop a Project Initiation Document (PID) to formally answer the key planning questions. - The PID: - Acts as a refined project description clarifying purpose and importance. - Forms the baseline for assessing the project manager’s performance once approved by the steering committee. - Is the baseline for scope, schedule, and budget; material changes require approval by the reform program head and reform steering committee. - PID characteristics: - May be a suite of related documents for larger projects. - Content varies by project size; large-scale/high-risk PIDs are comprehensive; smaller projects’ PIDs may be a summary of no more than a few pages. - Typical components of a large-project PID: - Project objectives: restate relevant objectives from the approved reform program and ensure they are sufficiently measurable for post-implementation evaluation. - Project scope: define in-scope and out-of-scope work, describe scope per workstream, and explain boundaries with other reform projects to prevent overlaps and gaps. - Project deliverables: clearly define deliverables (examples provided, e.g., “a new information technology system for managing tax arrears”). - Project benefits: quantify and define benefits in precise and measurable terms to facilitate evaluation. - Project budget: explain material variances from initial high-level estimates provided at reform program approval. - Project timeline: often represented by a Gantt Chart showing activities, scheduled start and finish dates, key milestones, dependencies, and current status. - Project change control: describe controls to manage changes to scope, cost, time, and quality; emphasize prevention of “scope creep” and require approval of material changes by the reform program head or steering committee. - Project risk management: include a summary of known risks and the process to identify, assess, and mitigate material risks, including use of a risk register to record likelihood, impact, and management actions. - Project approach: describe the development methodology (program-level methodology to ensure consistency across projects). Example methodologies: - “waterfall” approach (sequential stages) - “agile” approach (concurrent stages with multiple iterations) - Project organization: describe team structure, workstream allocation, and roles/responsibilities (illustrated by an organizational diagram, Figure 4.3). - Quality assurance: deliver in compliance with quality standards set or adopted by the tax administration; standards vary by country and may be guided by published industry and/or government standards. - Stakeholder engagement: identify key stakeholders and assess interest and influence; develop a stakeholder engagement and communications plan aligned with the reform program strategy. - Major dependencies: describe significant dependencies (things the project depends on others to provide and things others depend on the project to provide); treat uncertainty about external dependencies as a risk. - Human resources: assess required skills and experience, timing of needs, and source of resources (internal and external). ### Project Execution - Focus: creation and implementation of new products and services within the scope, time, budget, and quality constraints set out in the PID. - Project manager responsibilities during execution: - Ensure the project is properly resourced and clear about expected achievements and standards. - Monitor project spending, timelines, and milestones; provide regular progress reports to the reform program head and steering committee. - Ensure design of new products and services can deliver expected benefits defined in the PID; product/service designs generally require sponsor sign-off. - Tightly monitor deviations from the PID scope and enforce formal change control procedures. - Keep risks and issues under control and escalate decisions to the reform program head and steering committee when necessary. - Ensure the tax administration can support new products and services after project completion and that change management prepares staff and stakeholders. - Phase completion criterion: complete handover of new products and services to end-users and obtain their formal acceptance of deliverables; upon end-user confirmation of satisfaction, the reform steering committee can approve transition to Project Closure. ### Project Closure - A project can be closed once any, or all, of the following are confirmed: - Acceptance of the project’s deliverables - Achievement of the objectives set out in the PID - Acknowledgment that the project has nothing more to contribute (early closure) - Project manager activities during closure: - Review project performance against the PID and prepare a project closure report for steering committee approval. - Plan for an objective post-implementation evaluation. - Assist with reallocation of project team members to other reform projects or operational roles. ### Post-implementation Evaluation (Evaluation phase) - Purpose (project and program levels): - Evaluate whether the objectives outlined in the PID were met. - Determine how effectively the project was run. - Identify improvements for the future. - Evaluation principles: - Accountability is central; evaluation should be objective and constructive and undertaken by an independent person not directly involved in project activities. - Timing: - Ideally conducted as close to the end of the project as possible while memories remain fresh. - If too early to assess effectiveness for some deliverables, conduct evaluation in two stages: 1. Stage 1: evaluate aspects of project management (time, cost, scope, quality) and note lessons learned. 2. Stage 2: assess effectiveness in meeting objectives and achieving the benefits set out in the PID. *Source: vitara002ea - CHAPTER 4.* --- _Source: https://www.imf.org/-/media/files/publications/manuals-and-guides/2024/english/vitara002ea.pdf_