## 1. RA Survey Population and Response

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### Survey methodology, population, and response
- Questionnaires and instruments:
  - Two country questionnaires (Annex II) and a detailed HR questionnaire (Annex III).
  - First questionnaire sent spring and summer of 2005; sample: 21 countries (including two non-RAs as control).
  - Second questionnaire sent early 2006 to non-responding RAs and an additional 12 countries.
  - HR-focused follow-up probed recruitment, remuneration, performance pay, retention, internal staffing, control over organizations/positions, training and development, integrity.
- Response rates and samples:
  - From the 29 RA countries solicited through the first and second questionnaires, 23 responses were received — overall response rate close to 70 percent.
  - Twelve detailed replies to the implementation questionnaire (first round) were received.
  - Four non-RA comparator countries provided information: Brazil, Chile, Ireland, and Norway.
- Data limitations noted:
  - Time-series multi-year datasets, especially pre-reform data, were “extremely hard to obtain.”
  - Many respondents could not provide complete quantitative datasets; qualitative responses varied in completeness and introduced subjectivity.
  - No country provided information about the costs of the transition to an RA; implementation often took two to three years.

### Key definitions and governance concepts used in the survey
- Working definition (verbatim concept preserved): an RA is a governance model for revenue administration where ministry departments (tax and usually customs) are established with a degree of autonomy from government and independence from standard public service policies.
- Preserved definitions:
  - Autonomy — degree an agency operates independently from government (legal form, funding/budget flexibility, financial and human resources policies).
  - Accountability — clarity of roles/responsibilities, delegation of authority, and holding decision-makers responsible.
  - Governance regime — institutional/structural framework determining responsibility, authority, and accountability.
  - Government control — degree of central government involvement in agency decision-making (program and administrative).
- Governance spectrum and placement:
  - Revenue administrations occupy left-to-middle portion: either normal departments of government or semi-autonomous agencies; all RAs in this review are considered semi-autonomous.
  - Examples cited: Low relative autonomy—France, Cambodia; semi-autonomous examples—United States Internal Revenue Service, South Africa Revenue Service (SARS), Canada, Peru, Kenya.

### Survey structure and requested quantitative indicators
- Questionnaire sections (revised):
  - I. Basic information on the revenue authority (enabling law, organization charts, degree of autonomy, governance framework, scope).
  - II. Original rationale for adopting the RA (ranking of reasons).
  - III. Self-assessment of RA effectiveness (scale 0–10 across 16 reform areas).
  - IV. Practical results of human resources autonomy (recruitment, remuneration, performance pay, retention, internal staffing, organization and positions, training, discipline).
- Requested time‑series quantitative indicators (1995–2004 where possible), exact headings preserved:
  - Tax revenues (percent of GDP): Total; Corporate income tax; Personal income tax; Excises; Customs; VAT; Other.
  - Arrears (at year end): Nominal; Percent of annual collections.
  - Registration (# of taxpayers) by tax type.
  - Income tax returns (total returns, average processing time, returns filed electronically).
  - Customs: declarations filed electronically; average release time; percent subject to physical inspection.
  - Administrative costs: Total expenditures (not including donor financing); Donor funded expenditures.
  - Dispute resolution: objections (internal) average completion time; appeals average completion time.
  - Human resources: Staffing levels at year end.

### Brief history and prevalence of RAs (survey findings)
- Timeline and prevalence:
  - First RA creation: mid-1980s.
  - Oldest RA in survey population: Peru (legislation passed in 1988).
  - Most recent RA in survey population: Mauritius (2004).
  - Current count (context in paper): close to 40 RAs worldwide, largely in Africa and Latin America.
  - Countries that opted for an RA represent a little over 20 percent of IMF membership (as stated).
- Development agency involvement: DFID, USAID and private consultants were active promoters/supporters in some periods.

### Legal, funding, governance and scope summary (Annexes V–VIII aggregated findings)
- Legislative base:
  - A legislative instrument (law or decree) used to establish the RA in all cases in the survey.
  - A majority (14 of 21) introduced subsequent revisions to enabling RA legislation.
  - About 80 percent of the RAs (17 of 21) described as having separate legal status (“body corporate” or “legal personality”).
- Funding arrangements (exact counts preserved):
  - Normal budget and appropriation funding only (PEM)—40 percent or 8 of 20.
  - Normal budget and appropriation funding with an option for a percentage of revenue normally as incentive payment—30 percent or 6 of 20.
  - Funding based on a percentage of tax collection—30 percent or 6 of 20.
- External audit and asset ownership:
  - Almost all RAs have arrangements for external audit, usually by the auditor general (17 of 20).
  - Most RAs are able to own assets.
- Governance framework (Annex VII):
  - Boards present in 75 percent of RAs (15 of 20); exceptions: Colombia, Ethiopia, Peru, South Africa, and Spain.
  - Of 15 RAs with boards:
    - Chair named by government in ten cases.
    - Chair specified in legislation in four cases.
    - In one case the board elects its own chairperson.
  - CEO appointment:
    - Appointed by the government in 11 of 20 cases.
    - Appointed by the government on recommendation of the board in 6 of 20 cases.
    - Appointed by the board in 3 of 20 cases.
  - In all cases except Zambia, CEOs are fully vested with powers in the revenue legislation and powers can be sub-delegated.
- Scope of activities (Annex VIII):
  - All RAs administer income tax and a value-added tax.
  - With two exceptions (Colombia and Singapore), all RAs administer excise taxes.
  - Less than 25 percent of the RAs (5 of 21) collect social security contributions.
  - Customs inclusion varies; exceptions where customs not included: Ethiopia, Singapore, Canada (customs removed from RA in 2004), Italy.

### RA governance design and scope considerations (Annex IV highlights)
- Key design elements affecting autonomy:
  - Legal form (corporate character versus non-corporate).
  - Provisions governing funding and financial management policies.
  - Human resources regime.
  - Organizational arrangements.
- Funding models:
  - Normal parliamentary appropriation (least autonomy) versus percentage-of-collection funding formula (insulating and incentivizing but with distortions).
- Human resources regime:
  - Autonomy over recruitment, salary schemes, performance assessment, discipline, and termination is a key differentiator cited.
- Governance roles:
  - Minister of finance, board, and CEO roles prescribe practical autonomy; balance needed to retain public-sector sensitivity while enabling managerial autonomy.

### Survey self-assessments and perceived impacts (Annex X aggregates)
- Self-assessment scoring (average scores across respondents; exact preserved values):
  - Integrate tax administration: 8.29
  - Increase tax revenues: 8.11
  - Provide a catalyst or momentum for reform: 8.00
  - Improve automation: 7.79
  - Improve services to the public: 7.53
  - Improve remuneration: 7.53
  - Improve human resources regime: 7.47
  - Improve compliance management: 7.42
  - Improve public confidence: 7.32
  - Simplify laws, regulations, procedures: 7.06
  - Improve budget provision: 6.89
  - Improve anti-corruption measures: 6.83
  - Introduce risk management: 6.76
  - Improve valuation, classification, origin: 6.21
  - Introduce taxpayer segmentation: 5.94
  - Introduce self-assessment: 5.92
- Overall perceived effectiveness:
  - Respondents assigned an average of 7.2 out of 10 for how effective the RA model was in contributing to specific aspects of reform (across 16 reform areas).
  - Frequency of response across the 16 reforms was more than 88 percent.

### Human resources autonomy: reported practical results (survey aggregates)
- Recruitment and staffing:
  - 19 of 21 countries confirm ability to recruit from outside.
  - 11 of 21 indicated improvement in outside recruiting times; close to 30 percent indicated increased staffing times.
  - All countries but one have the final say in acceptance of external recruits.
- Remuneration and pay:
  - 17 of 21 countries indicated salaries had improved as a result of moving to RA.
  - Twelve countries (57 percent) indicated they have performance pay plans; many of these are bonus plans related to revenue targets rather than individual performance pay.
- Retention and attrition:
  - More than half the countries (12) did not know or were unable to say whether attrition rates were declining.
  - Five of 21 (24 percent) stated attrition rates were not declining; four indicated attrition rates and employee retention were improving.
- Internal staffing and promotions:
  - Twelve of 21 either did not know or did not indicate whether timeframes for internal staffing had improved; of the remaining nine, eight indicated improved timeframes.
  - A third of countries indicated fewer restrictions for internal staffing under RA status.
  - 17 of 21 indicated merit was a factor for promotion, 11 of 21 indicated competencies were a basis, five countries indicated seniority remained a factor.
- Training and development:
  - 7 of 21 indicated the number of training days per employee had increased; three said training decreased; 11 did not know or did not say.
  - 17 of 21 indicated their RA has its own training institute.
  - Seven of 21 indicated they used specific measures to quantify training and development improvements attributable to the RA.
- Discipline and integrity:
  - All countries reported developments (codes of conduct, asset and interest disclosures, ethics officers, internal affairs units, integrity action plans, increased disciplinary dismissals); no country specifically attributed these developments to the RA governance structure.

### Comparative RA vs Non-RA flexibilities (OECD preliminary data)
- Sample description: Non-RA (population = 14); RA (population = 7).
- Table 4 (percent abilities preserved exactly):
  - Ability to establish and design internal structure: Non-RA 79  RA 86
  - Ability to allocate and re-allocate budget: Non-RA 86  RA 100
  - Ability to determine the level and mix of staff: Non-RA 86  RA 100
- Interpretation provided in source: RAs and traditional departments share roughly similar ability to design internal structures but diverge on budget allocation and staff level/mix in this limited sample.

### Selected country case highlights (excerpts preserved)
- Peru (SUNAT):
  - On establishment staff numbers reduced from 3,100 to 800; average salaries rose from US$ 50.00 in 1990 to US$ 1,000.00 in 1991.
  - Tax revenue collection increased from 5.9 percent of GDP in the first semester of 1991 to 14 percent of GDP in 2005.
  - Level of noncompliance fell from over 50-60 percent in the early 1990s to about 38 percent in 2005.
  - Budgetary note: SUNAT’s budget is a separate budget approved by congress equivalent in principle to 2 percent of total estimated annual tax collection; agency has not always been allocated two percent.
- Guatemala (SAT):
  - SAT established February 21, 1998; tax collections rose from 8.7 percent of GDP in 1998 to 10 percent in 2005.
  - SAT monitors about 75 percent of collections through a large taxpayer unit.
- Brazil (SRF):
  - SRF organized by function; all corporate tax returns and 97 percent of personal tax returns are filed electronically (modernization since 1995; first electronic filing 1991).
  - Tax to GDP ratio grew continuously, reaching approximately 36 percent in 2004; collections administered by SRF account for nearly half of this amount.
- Australian Taxation Office (ATO) staff remuneration summary:
  - ATO remunerates 20,000 staff within a four-tiered structure (head/deputies; Senior Executive Service ~200; Executive-level ~1,600; Lower-level ~19,000).
  - SES bonus scheme range: 5 percent (fully effective) to 15 percent (exceptional) of base pay.

### Performance attribution, quantification, and measurement challenges (consolidated findings)
- Fundamental measurement problem:
  - It is extremely difficult to measure the contribution of tax administration generally to particular outcomes because many exogenous influences exist (economy, tax policy changes, regional growth trends, oil prices, demographics, political commitment, resource levels).
  - It is virtually impossible to isolate and measure the contribution of the RA governance model specifically.
- Literature and survey synthesis:
  - Many studies and respondents assume autonomy is beneficial and that “more autonomy is better,” but direct causal evidence is limited and largely anecdotal.
  - Where quantifiable variables are presented, they are often measures of reform progress rather than direct attribution to governance form.
- Quantitative reporting in respondent data:
  - Of 12 countries that provided tax-to-GDP data over the life of the RA: one country reported static tax-to-GDP revenue; four reported a decline; seven reported an increase (five saw growth of less than 2 percent; Argentina and Colombia reported growth of 3.5 percent and 6.2 percent respectively).
  - Given limited and inconsistent data, substantive assessment of trends attributable to RA status is not practical.

### Conclusions (numbered findings preserved)
- Defining an RA:
  1. A generally accepted or approved definition of an RA does not exist.
- RA and performance:
  2. The proposition that RAs have led to better revenue administration performance compared to what would have been the case had they remained a traditional department of government has neither been proved nor disproved.
  3. There is a great deal of difficulty in attributing changes in performance (outcomes) to a particular governance framework.
- Reform and modernization:
  4. There is no basis to conclude that reform and modernization of revenue administration is more likely within an RA governance framework than without.
  5. Amongst countries with an RA, many see the existence or creation of the RA governance model as a catalyst to promote and extend reform.
- Autonomy:
  6. The general case has not been made that the degree of autonomy can be specifically related to improvements in performance or the ability to undertake reform and modernization.
  7. RAs remain closely linked to government in terms of the role of the minister and accountability to the executive and to parliament.
  8. RAs frequently have substantial administrative autonomy (finance, budget, asset control), but the comparative advantages may be less significant than thought; public service-wide treasury decisions may take precedence over RA budget “guarantees.”
  9. HR autonomy is almost always accepted as desirable for an RA to address poor performance; however, alternative solutions may not be sufficiently considered.
  10. RA countries have received significant HR autonomy and used it to improve HR performance, but quantifying performance improvements and linking them to HR autonomy has proved difficult.
- Cost-benefit:
  11. Cost-benefit analyses were not and are not being undertaken with respect to the implementation of RAs, nor has an attempt been made to assess the opportunity cost associated with setting up the RAs.
- Perceptions:
  12. The case for establishing RAs has been largely intuitive.
  13. Notwithstanding the lack of a demonstrated basis for establishing an RA, there is a strong perception among adopters that the governance model has made a significant contribution to reform and improved performance.

### Policy recommendations and suggested further research (verbatim preserved emphasis)
- Core advice to countries considering establishing an RA:
  1. Establishing an RA should not be viewed as a panacea—creating an RA is clearly expensive, may take a long time and require significant effort, and does not actually improve tax administration effectiveness.
  2. Before considering a choice of governance model, revenue administrations should clearly identify and articulate problems and deficiencies, and consider strategies for reform and modernization based on international best practice.
  3. Only after a proper diagnosis is undertaken should a full assessment be made of the extent to which the RA governance model might satisfy the problems and reform strategies identified.
  4. Whatever the governance model, continuing political commitment is of the utmost importance in establishing and maintaining a professional and effective revenue administration.
  5. The RA model alone does not lead to improved effectiveness and taxpayer compliance—its establishment must be coupled with a serious commitment and plan for reform; modernization is ultimately the result of improvements in organizational structures, systems, and processes, including well designed programs of services and enforcement, sound allocation of resources, and effective management.
- Suggested areas for further research (items as listed):
  - Developing an “index” to determine relative autonomy or degree of autonomy of RAs.
  - Correlating such autonomy to external measures, such as changes in the Transparency International corruption index or other measurable data.
  - Using political economy analysis with detailed case studies to further explore specific attribution problems.
  - Undertaking comparative studies with governance changes in other domains (such as the central banks).
  - Assessing “actual” autonomy versus the autonomy prescribed by law.
  - Reviewing the actual operations and contributions of RA boards to determine effectiveness.
  - Assessing the nature of customs operations within the RA, and examining the extent of customs-tax integration actually occurring.

*Source: IMF working paper chapter “1. RA Survey Population and Response” (excerpted from _wp06240 PDF).*

### 1. RA Survey Population and Response ..................................................................................2

### 1. RA Survey Population and Response

### Survey Content and Structure
- Sections covered in this unit:
  - "1. RA Survey Population and Response ..................................................................................22"
  - "2. Ranking—Reasons for Initially Establishing the RA ..........................................................27"
  - "3. Ranking—Perceived Impact of RA Model on Reform........................................................30"
  - "4. RA/Non-RA Comparison on Ability to Design Internal Structure, Allocate/Re-Allocate Budget, and Determine Level and Mix of Staff.......................................................................37"

### Figures Listed
- Figure 1: "Typical National Government Structures ............................................................................12"
- Figure 2: "Revenue Administrations.....................................................................................................13"

### Boxes Listed
- Box 1: "RAs: Design and Scope Issues.............................................................................................14"
- Box 2: "Peru: National Superintendency of Tax Administration (SUNAT).....................................28"
- Box 3: "Uganda Revenue Authority..................................................................................................32"
- Box 4: "Brazil: Federal Tax Administration .....................................................................................36"
- Box 5: "The Canada Revenue Agency ..............................................................................................40"
- Box 6: "Guatemala: Superintendency of Tax Administration Superintendencia de Administración Tributaria (SAT) ......................................................................................................................41"

*Source: _wp06240 - 1. RA Survey Population and Response ..................................................................................2*

### 7. Australian Taxation Office Staff Remuneration ..................................................................49

### 7. Australian Taxation Office Staff Remuneration

### I. Introduction — purpose and framing
- Objective: advance the discussion and evaluation of revenue authorities (RAs) as governance models for revenue administration and their association with improved performance and compliance.
- Working definition: an RA is a governance model for revenue administration where ministry departments (tax and usually customs) are established with a degree of autonomy from government and independence from standard public service policies.2
- Observations:
  - RAs are promoted as solutions to poor revenue performance, low compliance, ineffective staff, and corruption.
  - The literature often assumes a direct link between RA governance models and improved performance, but attribution is challenging.
- Paper approach: compile descriptive and subjective information on RAs (legal form, mandate, practical use of autonomy), explore similarities, differences, trends, and present findings to inform IMF Fiscal Affairs Department (FAD) advice.

### II. Nature and scope — limits of quantitative assessment
- Ideal empirical approach: panel data analysis comparing RA countries (target) and non-RA countries (control), before-and-after comparisons.
- Practical impediments to rigorous econometric assessment:
  - Data availability: “extremely hard to obtain” multi-year datasets; pre-reform data especially scarce.
  - Exogenous influences on broad performance indicators (examples listed): economy, national statistics quality, tax policy changes, regional growth trends, oil prices, population demographics, political commitment, resource levels.
  - Governance heterogeneity: “RA” covers a broad spectrum of governance choices, complicating simple RA vs. non-RA comparisons.
- DFID summary (February 2005): identifies three major problems for econometric/quantitative research on autonomous RAs:
  - Measuring autonomy is tricky and would require subjective weighting if compressed into an index.
  - Data limitations constrain before-and-after comparisons.
  - Establishing causality is difficult without panel data and a very large dataset.
- Conclusion: assessments will necessarily rely on qualitative inputs, perceptions, and subjective criteria where quantitative isolation of RA effects is infeasible.

### III. Methodology — information sources and questionnaires
- Information channels used:
  - Literature review (including six seminal papers summarized in Section III; full bibliography in Annex I).
  - FAD experience advising countries on RA implementation.
  - Legislative and reference documents analysis.
  - Two country questionnaires (Annex II) and a detailed HR questionnaire (Annex III).
  - Preliminary OECD comparative data on revenue administration.
- Questionnaires:
  - First questionnaire (sent spring and summer of 2005) covered four major components:
    - Basic information (legal status, autonomy, governance, organization, scope).
    - Original rationale for adopting an RA (value proposition, expected benefits, success metrics).
    - Implementation (duration, project management, consultants, costs).
    - Self-assessment of RA effectiveness (contribution to tax administration modernization).
  - Additional request for time-series analytical background data on quantitative and qualitative performance measures.
  - Sample: 21 countries included in first questionnaire population (including two non-RAs as control).
  - Responses: detailed replies from 12 countries; dataset incomplete, prompting a second, shorter questionnaire.
  - Second questionnaire (sent early 2006) targeted non-responding RAs and an additional 12 countries to enhance the database.
  - HR-focused questionnaire: probed recruitment, remuneration, performance pay, retention, internal staffing, control over organizations/positions, training and development, integrity.
- Note on non-RA comparators: small number of traditional department countries were surveyed to contrast HR developments and other advances.

### IV. Brief history and prevalence of RAs
- Timeline and prevalence:
  - First RA creation: mid-1980s.
  - Oldest RA within survey population: Peru (legislation passed in 1988).
  - Current count: close to 40 RAs worldwide, largely in Africa and Latin America.
  - Proportion of IMF membership: countries that opted for an RA represent a little over 20 percent of IMF membership.
  - Development agency involvement: DFID, USAID and others have at times promoted RAs; private consultants active in 1980s–1990s in Africa.
- Comparative government reform trend:
  - Quasi-autonomous agencies account for close to 25 percent of all government expenditure in the United Kingdom since the 1990s.
  - Similar agency approaches used in Canada and New Zealand across diverse government functions.

### V. Key definitions and governance concepts
- Defined terms used in the paper (verbatim concepts preserved):
  - Autonomy — degree an agency operates independently from government (legal form, funding/budget flexibility, financial and human resources policies).
  - Accountability — clarity of roles/responsibilities, delegation of authority, and holding decision-makers responsible; individual and organizational accountability possible.
  - Governance regime (or model)8 — institutional/structural framework determining responsibility, authority, and accountability for a government institution; in RAs it dictates relative autonomy and applicability of public service policies.
  - Government control — degree of central government involvement in agency decision-making (program and administrative).
- RA placement on a governance spectrum:
  - Spectrum illustrated conceptually from left (department within a ministry) to right (semi-autonomous agencies, autonomous regulatory bodies, state-owned enterprises, privatized activities).
  - Revenue administrations occupy the left-to-middle portion: either normal departments of government or semi-autonomous agencies; all RAs are considered semi-autonomous by this definition.
  - Examples (relative autonomy continuum referenced in paper):
    - Low relative autonomy: France, Cambodia.
    - Semi-autonomous examples with varying autonomy: United States Internal Revenue Service (less autonomy within group), South Africa Revenue Service (SARS), Canada, Peru, Kenya.
- Core conclusion on definition:
  - For this review, an RA = a revenue administration operating within any governance model providing greater autonomy than a standard department of government.

### VI. Design and scope considerations
- Design and scope determine where an RA falls on the autonomy continuum.
- Important policy choices (overview only; detailed options discussed in Annex IV) affect:
  - Legal form and character.
  - Mandate and scope of activities (tax, customs, and related functions).
  - Budget autonomy and financial arrangements.
  - Human resources policies and flexibility.
  - Governance arrangements and accountability mechanisms.
- Practical implication: policy choices during RA design materially influence achievable autonomy and the RA’s potential to address identified performance issues.

*Source: IMF working paper chapter “7. Australian Taxation Office Staff Remuneration” (from _wp06240 PDF)._

### Box 1. RAs: Design and Scope Issues

### Box 1. RAs: Design and Scope Issues

### Design
- Includes degree of autonomy or independence, and related governance framework and subsequent accountability structures.

### Degree of autonomy
- Legal form and status—legislation could establish an agency relatively similar to a normal government organization, or set up a corporate body with considerable independence from government.
- Funding—could range from normal funding via parliamentary appropriations to direct retention of a percentage of collected revenues.
- Budget flexibility—from limited flexibility to the complete flexibility of a one-line budget.
- Financial policies (such as accounting, asset ownership and management, procurement)—subject to standard civil service laws and regulations or as determined by “corporate body” status.
- Human resources—within the civil service control framework, or outside it.

### Governance framework
- Role of the minister of finance—direct supervision of the authority by the minister, or role limited to appointment of board or board chair only.
- Role of the board—advisory, or fully empowered in legislation to take management decisions.
- Role of director general—coordinating role only, or full responsibility for revenue operations with all vested powers from revenue laws.

### Accountability
- Reporting to the government and parliament—part of general government reporting, or special requirements specified in legislation.
- External audit—responsibility of auditor-general, or the board selects private sector external auditor.

### Scope
- Refers to the scope of taxes and taxing agencies to be included ranging from direct and indirect taxes at the national level to the inclusion of customs administration and agencies or units that collect local taxes or fees.

### III. REVIEW OF SELECTED LITERATURE — Overview
- Literature focuses on: overall concept of the RA, the case for autonomy and how to measure it, and RA performance based on case studies.
- Many descriptive pieces exist; relatively few analytical assessments of RA performance.
- Six papers selected to illustrate areas of particular interest: Jenkins (1994); Taliercio (2004); Mann (2004); Delay, Devas, and Hubbard (1999); Gray and Chapman (2001); Di John and Putzel (2005).
- Common issue across studies: difficulty of measuring RA performance and isolating the impact of the RA governance model.

### Jenkins (1994) — main observations and recommendations
- Context: changes in public administration thinking by early 1990s; tax law/policy only as good as its administration.
- Problem diagnosis: tax administrations traditionally part of the general civil service → low salaries, poor staff qualifications, political patronage, rent-seeking, diminished voluntary compliance.
- Prescription: restructure revenue administrations to provide independence similar to central banks:
  - appointment of a CEO for a specified term;
  - authority to establish operating policies;
  - clear and transparent objectives;
  - a measure of financial independence;
  - full responsibility for recruitment, training, and salary structure.
- Revenue board concept: boards should have specific administrative responsibilities as a policy committee to:
  - ensure revenue departments enforce the laws;
  - establish human resources policies;
  - ensure sharing of information;
  - provide resource allocation direction;
  - recommend legislative changes;
  - provide revenue forecasts;
  - set up internal audit.
- Governance model evolution noted: early RAs had CEO supporting board without line authority over heads of revenue departments; modern practice moved to a fully empowered CEO, especially with integrated, function-based organizations.

### Taliercio (2004) — findings and measurement approach
- Case studies assessed: Peru, Mexico, Venezuela, Kenya, Uganda, South Africa.
- Two main findings:
  - (1) performance improved most where the RAs had comparatively more autonomy;
  - (2) performance improved where autonomy was stable.
- Assessment criteria:
  - Management: retrenchment and re-application at establishment, skill and salary levels, total wages, grading structures, retention, turnover, corruption levels; financial management: collection costs, adequacy of funding, investments in training and IT; decentralization, standards, private sector relations.
  - Performance: revenue collection, compliance, taxpayer registration and services, tax revenues as a share of GDP, growth rates in arrears, VAT productivity, audit coverage.
- Methodological caveats: data availability problems; lack of rigorous methodology controlling for exogenous variables; difficulty “measuring” autonomy and sustainability of reforms.
- Observations:
  - Autonomy enabled internal management reforms (example: staff improvements and reduced corruption in the Kenya Revenue Authority).
  - More autonomous RAs tend to have reasonably low collection costs (expenditures as a percent of revenues collected), but cross-country comparisons are fraught with exogenous factors.
- Arguments for autonomy:
  - solves administrative and corporate governance problems;
  - addresses low pay, low quality staff, low retention, patronage-based recruitment;
  - limits political intervention through independence from executive branch;
  - can provide adequate funding (e.g., percentage-based cost-of-collection formula).
- Potential arguments against RAs:
  - enclave approach to reform — raises question about reform of the rest of government;
  - negative externalities for other government functions;
  - insufficient accountability risk (“bureaucracy run amok”);
  - possible diversion from core operational functions of tax administration.

### Mann (2004) — synthesis of advantages/disadvantages and recommendations
- Advantages listed:
  - enhanced revenues;
  - greater efficiency;
  - more competent staff;
  - de-politicization of tax administration;
  - reduced corruption;
  - improved services;
  - more professional work ethic;
  - comprehensive accounting for tax revenues;
  - integration of databases.
- Additional disadvantages:
  - potential inherent conflict with the ministry of finance;
  - possibility of creating an “unnecessary” organization where existing departments could be upgraded given political will and resources.
- Key recommendation: carry out cost-benefit analyses when considering creation of an RA.
- Governance recommendations: maximum autonomy possible presented as best practice; focus on appointment processes for board and CEO.
- Quantitative indicators used for evaluation: VAT compliance and productivity rates, general tax-to-GDP ratios — with caveats about exogenous influences and attribution.
- Conclusion: RAs neither uniformly lived up to expectations nor uniformly failed; they provide a platform for generating tax administration efficiencies but establishment alone does not guarantee success.

### Delay, Devas, and Hubbard (1999) — DFID-funded project review
- Conclusions regarding RAs:
  - RAs have much to offer, especially where civil service management inhibits proper HR management.
  - RAs are not a panacea, do not prevent political interference, and do not guarantee against incompetence or malpractice.
  - Urgency to mobilize revenues can make the RA model attractive; institutional change may carry symbolic “fresh start” value.

### Gray and Chapman (2001) — DFID evaluation of Uganda and Zambia
- Project objectives: increase revenue/GDP ratio for Uganda; prevent deterioration of revenue/GDP ratio in Zambia.
- Findings:
  - Both projects considered a success on revenue objectives, but no direct causal link to RA structure established.
  - For Uganda, increase in revenue/GDP ratio attributed in part to DFID support; ratio “stagnated (when) DFID’s support was scaled down.”
  - Confirmed attribution problems: revenue/GDP ratio sensitive to many influences.
  - Specific RA-related conclusions:
    - (1) de facto degree of adoption of the RA framework varied from country to country;
    - (2) RAs have led to more flexibility in allocation of RA budgets, but have not brought independence from the state budget;
    - (3) the RA framework has not led to significant easing of enforcement problems.

### Di John and Putzel (2005) — political economy analysis (Uganda case)
- Focus: political economy analysis of the Uganda Revenue Authority.
- Observations:
  - IFIs and aid donors propose that in weak states RAs operating autonomously as commercial entities at arms length from government are more effective.
  - Questions sustainability of autonomy given critical interdependencies (e.g., between tax policy and tax administration).
  - Emphasizes importance of political and economic realities for RA operation and autonomy:
    - macroeconomic crises;
    - existence of conditions for successful reform such as political support;
    - public communications and perceived legitimacy of a tax and its administration;
    - vulnerability to shifting political attention.
- Contribution: highlights limits to “true autonomy” and the role of political economy factors in sustaining RA reforms.

*Source: _wp06240 - Box 1. RAs: Design and Scope Issues*

### Conclusion

### Conclusion

### Common themes and measurement challenges
- With the exception of Jenkins, all the papers grapple with the problem of quantification and how to measure RA performance to assess whether the RA governance model made a difference.
- No author was able to present or to propose an analytical model that would produce measurable results for the RA.
- Where quantifiable variables are presented, they are designed to measure the progress of reform—whether through an RA or through a traditional department of government.
- Many writers on RAs articulate objectives for the RA that are in fact objectives for any modernization program, making it difficult to isolate the contribution of the RA governance regime to overall modernization progress.
- Autonomy is commonly assumed to be beneficial (and that more autonomy is better) based on analogies with central bank governance, but:
  - The basis for this conclusion remains unclear and largely anecdotal.
  - There are few descriptions of specific and practical results directly attributable to autonomy beyond generally indirect benefits (e.g., ability to pay higher wages, more professional staff).
  - If autonomy cannot be directly linked to improved performance, the “more is better” argument is difficult to accept.
- The fundamental problem in the literature is measurement:
  - It is extremely difficult to measure the contribution of tax administration generally to particular outcomes because there are many influences on any one outcome.
  - It is virtually impossible to measure the contribution of the RA governance model specifically to these outcomes.
  - Many assessments labeled as evaluating RAs are effectively discussing tax administration generally, not the RA governance model specifically.
  - Example presented: “the revenue authority has increased revenues by 2 percent of GDP over a four-year period.” This statement alone does not indicate the performance of the RA as a tax administration nor the contribution of the RA governance model, because dozens of factors contribute to such an outcome.

### The questionnaire responses and other data — overall response
- From the 29 RA countries that were solicited through the first and second questionnaires, 23 responses were received for an overall response rate of close to 70 percent.
- Information was also sought from four countries that have not opted for the RA governance model—Brazil, Chile, Ireland, and Norway.
- Many countries invested considerable time and effort in preparing responses, aiding the development of the paper.

### Organization and presentation of the data
- Two questionnaires and other information requests generated significant data including factual information and qualitative evaluations of reasons for adopting the RA model and perceived effectiveness.
- FAD experience in technical assistance and reform support supplemented questionnaire information.
- A series of tables was prepared to compile related data elements (legislative base, general features, governance framework, scope, reasons for establishment, assessment of effectiveness, HR autonomy results). These tables form the basis for findings discussed in Section VI.
- The quality and completeness of responses varied considerably:
  - Responses depend on record keeping and corporate memory.
  - Qualitative questions introduce subjectivity.
  - While 23 RA countries answered, data from all 23 may not be included in every table because complete answers were not provided in every case.

### Summary of findings — Basic information on RAs (from Annexes V–VIII)
From Annex V: Legislative base for RA
- A legislative instrument (law or decree) was used to establish the RA in all cases.
- The earliest RA is 1988 (Peru), the most recent is 2004 (Mauritius).
- A majority of countries (14 of 21) has introduced subsequent revisions to their enabling RA legislation.
- About 80 percent of the RAs (17 of 21) in the survey were described as having separate legal status (established as a “body corporate” or having “legal personality”).
- Almost all RAs have mandates equivalent to assessing and collecting tax and administering and enforcing the revenue laws, and almost all have a mandate to provide advice on tax laws to the minister of finance.

From Annex VI: General features of the RA
- The minister of finance or equivalent minister is considered to have at least general supervision and oversight of the RA in most cases (possible exception: Guatemala, although the minister of finance is named president of the board of directors in the law).
- Seventy percent of the RAs (14 of 20) are outside the normal public service, with at least a minimum level of exemption from the normal public service regime.
- Colombia, Ethiopia, Italy, Spain, and, to some extent, Mexico remain in effect part of the public service.
- A slight majority of the RAs (11 of 20) has the authority to borrow; in four of the 11 cases, approval of the minister of finance is required.
- Most RAs are able to own assets.
- Funding arrangements:
  - Normal budget and appropriation funding only (PEM)—40 percent or 8 of 20.
  - Normal budget and appropriation funding with an option for a percentage of revenue normally as incentive payment—30 percent or 6 of 20.
  - Funding based on a percentage of tax collection—30 percent or 6 of 20.
- Almost all RAs appear to have the flexibility of a one-line budget and most include some provision for the carryover of unused funds.
- All RAs have arrangements for external audit, usually by the auditor general (17 of 20). In three cases (Botswana, Lesotho, and Zambia), the external auditor can be appointed by the Board (Lesotho: government can request auditor general to audit).

From Annex VII: RA governance framework
- Seventy-five percent of RAs (15 of 20) have boards (exceptions: Colombia, Ethiopia, Peru, South Africa, and Spain).
- All except Zambia are empowered management boards with specific responsibilities and oversight functions. Zambia’s law establishes the board of directors as an operational board vesting powers and functions normally vested in the CEO.
- Boards range in size from 5 to 15 members and all have private sector representation.
- Of 15 RAs with boards:
  - The chair is named by the government (minister or head of state) in ten cases.
  - The chair is specified in legislation in four cases.
  - In one case the board elects its own chairperson.
- In all cases except Zambia, CEOs are fully vested with powers in the revenue legislation and powers can be sub-delegated.
- CEO appointment:
  - Appointed by the government in 11 of 20 cases.
  - Appointed by the government on recommendation of the board in 6 of 20 cases.
  - Appointed by the board in 3 of 20 cases.

From Annex VIII: RA scope of activities
- All RAs administer income tax and a value-added tax.
- With two exceptions (Colombia and Singapore), all RAs administer excise taxes.
- Almost all RAs (19) administer some other types of tax (stamp tax (12), gaming tax (6), property tax (4), and combinations of other taxes including motor vehicle licensing and transport fees).
- Less than 25 percent of the RAs (5 of 21) collect social security contributions.
- Generally, the RA model includes customs administration; exceptions: Ethiopia, Singapore, Canada (customs removed from RA in 2004 to form part of a border services organization), and Italy (separate RA for customs).

From data on establishment and organizational reform
- The initial transition to an RA does not appear to have precipitated organizational change except for creation of a board with certain management responsibility and creation of common service organizations.
- The shift to the RA model does not appear to lead to new reporting lines, organizational layers, or new organization types.
- More significant changes often occurred within a few years of establishment, including:
  - Move to function-based organization.
  - Integration of direct and indirect tax administration.
  - Organization based on taxpayer segmentation beginning with large taxpayer offices.
- RA organizations resemble non-RA organizations except for boards and common support services.

### Summary of findings — Original rationale for considering and adopting an RA (Annex IX)
- Respondents ranked reasons for initial establishment; aggregated results summarized in Table 2 (Ranking—Reasons for Initially Establishing the RA):
  - Rank 1: Low effectiveness of tax administration and poor levels of compliance — Average Ranking 1.8
  - Rank 2: Need for a catalyst to launch broader revenue administration reform (modernized operations, improved automation, integrated and function-based structures, and so on) — Average Ranking 2.73
  - Rank 3: Impediments caused by poor civil service human resources policies (recruitment, remuneration, promotion, training, discipline) — Average Ranking 2.9
  - Rank 4: Poor communication and data exchange among the existing revenue departments (e.g., income tax, sales tax, customs) — Average Ranking 4.21
  - Rank 5: Desire to create “islands of excellence” within the public sector — Average Ranking 4.54
  - Rank 6: Perceptions of political/ministerial interference — Average Ranking 4.55
  - Rank 7: High levels of corruption — Average Ranking 4.67
- Observations drawn:
  - No single reason was identified by all respondents as the main motivating factor.
  - Highest priority reason was low effectiveness of tax administration and poor levels of compliance (cited by 16 of 17 respondents; of the 16, 11 rated it the highest priority).
  - Second highest was need for a catalyst to launch broader reform (16 of 17 cited it; 7 of 16 rated it highest or second highest).
  - Third ranked was impediments caused by poor civil service HR policies (12 of 16 respondents rated it first, second, or third).

*Source: _wp06240 - Conclusion*

### 1990. The guerrilla movements made it very difficult to enforce the tax laws, and the average salary of tax department

### _wp06240 - 1990. The guerrilla movements made it very difficult to enforce the tax laws, and the average salary of tax department

### Background and context
- In 1990 the average public sector salary was US$ 50/month; tax department staff were frequently on strike (in one year tax administration staff were on strike for a total of 5 months).
- Creation of the SUNAT (and SUNAD) occurred during major political and economic changes; SUNAT followed a modernization strategy suggested by FAD focused on: simplifying the tax system, strengthening VAT administration, setting up a large taxpayer unit, and transferring processing of tax returns and payments to the banking system.
- Senior government authorities, including the president, fully supported SUNAT from its early days.
- SUNAT experienced a difficult period in 1999-2001 when political support waned, audit activities were drastically reduced, and taxpayer database quality deteriorated; this trend has since been reversed but continued efforts are needed in enforcement and information technology.

### Nature of RA autonomy (SUNAT legal and budgetary features)
- SUNAT is defined by law as a decentralized public institution of the economic and financial sector.
- The law endows SUNAT with autonomy to manage its budget and human resources, including the ability to determine personnel salaries on the basis of staff evaluations independently of the rest of the public sector.
- On establishment, staff numbers were reduced from 3,100 to 800 and new staff were hired on a merit-based system.
- Average salaries rose from US$ 50.00 in 1990 to US$ 1,000.00 in 1991.
- SUNAT’s budget is not a line item of the general government budget but is a separate budget approved by congress that is, in principle, equivalent to 2 percent of total estimated annual tax collection; however, the agency has not always been allocated two percent of total tax collection.
- Since 1998 SUNAT is subject to a budget law which bars it from increasing salaries or introducing new salary scales; salaries of staff hired after 1998 are frozen and are approximately half of those of old staff.

### Main results of SUNAT introduction (performance and modernization)
- Human resources and infrastructure:
  - SUNAT now has a much stronger and more skilled team of officials recruited from top graduates of Peru’s best universities.
  - The agency has modern office buildings and modern IT systems, a modern web site, and more than 60 percent of tax returns are filed electronically.
- Revenue and compliance outcomes:
  - Tax revenue collection increased from 5.9 percent of GDP in the first semester of 1991 to 14 percent of GDP in 2005.
  - Level of noncompliance fell from over 50-60 percent in the early 1990s to about 38 percent in 2005.
- Attribution caveat:
  - It is difficult to gauge what percentage of the revenue improvement can be attributed to SUNAT’s administrative improvements because some tax rates increased and new taxes were introduced.

### Implementation of RA model (survey findings)
- Survey response and general observations:
  - Twelve replies were received to the implementation questionnaire; answers about implementation were incomplete.
  - The transition from being a ministerial department to an RA is likely to take two to three years (focus predominantly on the legislative process).
  - Nine of the 12 responding countries used consultants to assist in establishing the RA, mainly for research, building the case for change, and preparing legislative issues.
  - None of the countries provided information about the costs of the transition to RA.
- Common implementation shortcomings:
  - Respondents focused on legislative issues and gave little attention to project management, critical stages, techniques, and costs.

### Self-assessment of RA effectiveness (ranking of reform areas)
- From Annex X, Table 3—Ranking—Perceived Impact of RA Model on Reform (Average Degree of Impact):
  1. Integrate tax administration: 8.29
  2. Increase tax revenues: 8.11
  3. Provide a catalyst or momentum for reform: 8.00
  4. Improve automation: 7.79
  5. Improve services to the public: 7.53
  6. Improve remuneration: 7.53
  7. Improve human resources regime: 7.47
  8. Improve compliance management: 7.42
  9. Improve public confidence: 7.32
  10. Simplify laws, regulations, procedures: 7.06
  11. Improve budget provision: 6.89
  12. Improve anti-corruption measures: 6.83
  13. Introduce risk management: 6.76
  14. Improve valuation, classification, origin: 6.21
  15. Introduce taxpayer segmentation: 5.94
  16. Introduce self-assessment: 5.92
- Observations:
  - Countries ranked integration, increased tax revenues, and catalytic reform highest, but respondents did not describe how governance model produced these impacts.
  - Improving the HR regime ranked seventh; anti-corruption impact was 12th.
  - Respondents generally described outcomes but did not provide direct causal links between the RA governance model and specific reform areas.
- Evaluation practices:
  - Specific objectives were set (quantitative and qualitative) but no methods for evaluation were commonly identified.
  - Annual reports are frequently used as the vehicle for evaluating RA performance; only Canada undertook a formal review required by RA-establishing legislation.

### Human resources—practical results and country responses (survey aggregates)
- Recruitment and staffing:
  - 19 of 21 countries confirm they have the ability to recruit from outside.
  - 11 of 21 indicated an improvement in outside recruiting times; close to 30 percent indicated increased staffing times.
  - All countries but one have the final say in acceptance of external recruits.
- Remuneration and pay:
  - 17 of 21 countries indicated salaries had improved as a result of moving to RA.
  - Twelve countries (57 percent) indicated they have performance pay plans; many of these are bonus plans related to revenue targets rather than individual performance pay.
- Retention and attrition:
  - More than half the countries (12) did not know or were unable to say whether attrition rates were declining.
  - Five of 21 (24 percent) stated attrition rates were not declining; four indicated attrition rates and employee retention were improving.
- Internal staffing and promotions:
  - Twelve of 21 either did not know or did not indicate whether timeframes for internal staffing had improved; of the remaining nine, eight indicated improved timeframes.
  - A third of countries indicated fewer restrictions for internal staffing under RA status.
  - 17 of 21 indicated merit was a factor for promotion, 11 of 21 indicated competencies were a basis, five countries indicated seniority remained a factor.
- Organization, classifications, and training:
  - 15 of 21 countries have authority to determine their own organizational structure.
  - Only seven of 21 indicated the number of training days per employee had increased under the RA regime; three said training decreased; 11 did not know or did not say.
  - 17 of 21 indicated their RA has its own training institute.
  - Seven of 21 indicated they used specific measures to quantify training and development improvements attributable to the RA.
- Discipline and integrity:
  - All countries reported developments such as codes of conduct, asset and interest disclosures, ethics officers, internal affairs units, integrity action plans, and increased disciplinary dismissals; no country specifically attributed these developments to the RA governance structure.

### Comparison with non-RA countries and quantitative reporting limits
- Three non-RA countries provided responses to reform and modernization questions; sample size is insufficient for benchmarking.
- Of 12 countries that provided tax-to-GDP data over the life of the RA:
  - One country reported static tax-to-GDP revenue.
  - Four reported a decline.
  - Seven reported an increase: five saw growth of less than 2 percent; two countries (Argentina and Colombia) had growth of 3.5 percent and 6.2 percent.
- Given the limited and inconsistent data, substantive assessment of trends attributable to RA status is not practical.

*Italic: Source — content from the provided IMF PDF chapter/section.*

### conclusions.

### _wp06240 - conclusions.

### Box 4. Brazil: Federal Tax Administration (SRF)
- SRF established in 1968 as a traditional Ministry of Finance (MOF) department; organized by function and administers domestic taxes and customs.
- As part of MOF, SRF must follow government-wide legislation on human resources and budgeting but has enjoyed some degree of differentiation within the public service.
- Human Resources policy:
  - Recruitment:
    - Employees admitted on basis of a two-stage exam: a written test (areas such as tax and constitutional law, accounting, economics) and a 3-month in-house course for those who pass the test.
    - A separate public exam exists for admission to the SRF; SRF defines requirements, prepares tests, and conducts the course.
    - Number of openings and administration of the exam must be approved by the Ministry of Planning, Budget and Management (MPBM).
  - Remuneration:
    - SRF required to apply salary scales previously approved by the MPBM.
    - A special pay scale higher than the regular civil service pay scale applies only to the SRF and other departments that conduct tax audits (such as the Social Security Administration).
    - SRF staff also receive a bonus linked to performance (both individual performance and the collective attainment of revenue targets).
    - ‘Additional’ salaries for managerial positions must be allocated based on civil-service wide rules; as a result, ‘additional’ salaries for line managers do not always reflect increased responsibility, especially at executive levels.
- Political influence and professionalism:
  - Open competitive exams and a well-established corps of employees have created a culture of professionalism and eliminated political appointments within the organization over the last decade.
- Modernization and IT:
  - Modernization program since 1995 focused on information technology and automation.
  - First electronic filing program introduced in 1991, with 3 percent of taxpayers choosing this medium to file their returns.
  - In 1997, electronic filing over the Internet introduced.
  - Currently, all corporate tax returns and 97 percent of personal tax returns are filed electronically.
  - All taxes and systems operate under a self-assessment regime.
  - SRF web site has received many awards for taxpayer services and education programs.
- Results:
  - Tax to GDP ratio grew continuously, reaching approximately 36 percent in 2004.
  - Collections administered by the SRF account for nearly half of this amount.

### Comparative findings from OECD survey data
- Sample description:
  - Non-RA (population = 14)
  - RA (population = 7)
- Table 4. RA/Non-RA Comparison on Ability to Design Internal Structure, Allocate/Re-Allocate Budget, and Determine Level and Mix of Staff (In percent)
  - Ability to establish and design internal structure: Non-RA 79  RA 86
  - Ability to allocate and re-allocate budget: Non-RA 86  RA 100
  - Ability to determine the level and mix of staff: Non-RA 86  RA 100
- Interpretation:
  - From this limited sample, RAs and traditional departments share a roughly similar ability to establish and design their own internal structures but diverge when it comes to budget allocation and the level and mix of staff.

### VI. Analysis of Major Issues
- Analytical focus areas:
  - (A) the decision to implement an RA;
  - (B) perceptions of success and the link to reform;
  - (C) features of a modern RA;
  - (D) human resources autonomy; and
  - (E) RAs and non-RAs.

#### A. The Decision to Implement an RA
- Primary reasons for establishing an RA:
  - Low effectiveness of the tax administration.
  - The need for a catalyst for reform.
  - Removing impediments caused by poor civil service HR regimes (ranked third).
- Observations on decision processes:
  - Little to no cost-benefit analysis is undertaken prior to implementing an RA.
  - Disadvantages of the RA are often not considered.
  - Evaluations are seldom undertaken after implementation.
  - Government decisions appear driven by the need for reform generally and not by specific assessments comparing the RA model to traditional ministry/department models.
  - Implementation focus was more on legislative issues required to establish the new model than on implementation process details.
  - No country provided information about the costs of the transition to an RA model; transition is likely to take a two- to three-year period.
  - Cost-benefit analyses were not undertaken in any case involving the establishment of an RA.
- Consideration of disadvantages:
  - Literature has articulated disadvantages (Taliercio (2004) and Mann (2004)), but analysis of these factors did not appear to form part of the initial decision-making process.
- Corruption and political interference:
  - High levels of corruption ranked lowest as a rationale for establishing an RA; perceptions of political interference and high levels of corruption were ranked second last and last, respectively.
  - Possible under-reporting or revisionist answers may affect these responses.
- Post-evaluations:
  - Post evaluations do not seem to be a feature of RAs.
  - Most countries could not report specific evaluations contemplated at the time of RA creation.
  - Few subsequent assessments exist and linking performance data to the RA governance model is difficult.
  - Performance attribution difficulties remain a major obstacle in assessing any RA.
- Implementation duration and costs:
  - Implementation often took two to three years.
  - Many used consultants; considerable resources consumed in RA implementation.
  - Little information available on exact costs; opportunity costs of the transition are likely significant.
  - Impossible to determine extent to which resources invested in governance change were a sound investment given paucity of impact information.

#### B. Perceptions of Success and the Link to Reform
- General perception:
  - RAs are seen as making a strong contribution to reform, although respondents did not directly link improvements to the RA model itself.
- Survey self-assessment:
  - Respondents assigned an average of 7.2 out of 10 for how effective the RA model was in contributing to specific aspects of reform (across a range of 16 different reform areas).
  - Average frequency of response rate across the 16 reforms was more than 88 percent, indicating a strongly held belief that the RA governance model was a significant contributor to reform in almost every area.
- Case reference:
  - Box 6 (Guatemala) cited where an RA in place since 1998 attributes HR autonomy as a contributing factor to success in tax administration reform.

*Source: _wp06240 - conclusions.*

### Box 6. Guatemala: Superintendency of Tax Administration

### Box 6. Guatemala: Superintendency of Tax Administration (SAT)

### Motivations for establishing the Revenue Agency (RA)
- Reform program launched in early 1997 to achieve objectives of the Peace Agreement signed in December 1996.
- Tax reform objectives included raising the tax/GDP ratio from around 8 percent of GDP to 12 percent through tax system and administration reforms.
- Decision to establish the SAT based on the successful experience of the SUNAT in Peru.
- Main motivation: create a relatively more autonomous agency to provide greater flexibility to recruit and retain a corps of professional, appropriately paid and motivated tax administrators, based on a professional career system.
- SAT established on February 21, 1998, and assumed powers and responsibilities of the former Inland Revenue and Customs Departments.

### Nature of the SAT autonomy
- SAT is a decentralized public institution of the economic and financial sector and is a body corporate.
- It has human resources and budget autonomy.
- Authorities available to the SAT:
  - Recruit staff, establish salary scales, and define career paths.
  - Set all financial policies except procurement.
- Procurement remains outside SAT autonomy.

### Main results following SAT introduction
- Organizational and operational attributes:
  - Modern tax administration with systems to monitor delinquent taxpayers and current accounts.
  - Expanding services to taxpayers, qualified staff, good facilities, and computer equipment.
  - Sound organizational structure with a large taxpayer unit that monitors about 75 percent of collections.
- Revenue outcomes:
  - Tax collections rose from 8.7 percent of GDP in 1998 to 10 percent in 2005.
- Operational challenges and limitations:
  - Managerial instability, changes in strategic focus, legal problems, inconsistent use of information in operational areas, and some cases of corruption impeded effectiveness.
  - Period of 2000-2001 included attempts to remove the SAT’s autonomous status and convert it back into a traditional government department in the ministry of finance.

### Perceptions of RA governance model and reform success
- Perceived reform success was not linked by respondents to the existence of an RA governance model.
- Top three revenue administration reform areas respondents ranked as impacted by the RA structure:
  - Integrating tax administration.
  - Increasing tax revenues.
  - Providing a catalyst for reform.
- Narrative responses did not draw explicit links between governance model and performance improvements.
- General expectation: creation of an RA with increased management control and autonomy, better resourcing and staffing would lead almost automatically to overall improvements in revenue administration.
- Empirical attribution proved elusive; lack of data makes assessing governance model impact difficult. Most administrations do not collect or analyze data permitting specific conclusions.

### Features of a modern RA (broader observations)
- RAs remain firmly entrenched in government; homogeneity in mandates and corporate character.
- Management boards:
  - Present in 75 percent of RAs surveyed.
  - Generally empowered management boards excluded from direct involvement in taxpayer cases.
  - Private sector representation present on all 15 boards referenced.
  - Real influence of boards is difficult to assess.
  - In 11 of 20 cases, boards have no role in the appointment of the CEO; in six cases the board recommends the CEO to the executive branch; in three cases the board itself appoints the CEO.
  - Few boards have case-specific operational involvement; daily operations rest with the CEO.
- Legal and executive relationships:
  - RAs continue to operate under regular oversight and often direct supervision of a minister of government and report to the legislature on plans and activities.
  - Autonomy afforded by RA legislation often pertains to management issues rather than operational/technical administration of revenue legislation.
- Organizational structure:
  - Implementation of RA did not dramatically change organizational structures beyond creation of the board and common support services.
  - Over time some countries refined structures toward functional or taxpayer-focused models; attribution to RA status is unclear.
- Customs and integration:
  - Scope of most RAs includes customs, but customs operations tend to remain separate from tax administration.
  - Customs not truly integrated due to “real-time” operational needs and widening non-fiscal (security-related) roles.
- Budget autonomy and funding certainty:
  - Budget autonomy varies widely.
  - Seventy percent (14 of 20) receive basic funding through the normal government appropriation and budget process.
  - Close to half of that group have the option to receive a portion of revenue collected as an incentive payment (discretionary with the minister of finance).
  - Many RAs operate within broader government budget/spending frameworks and normal public account rules.
  - Most RAs can carry forward unspent funds subject to limits; all RAs in the study can own assets but are often subject to government asset-management rules.
  - About half of RAs (11) reported the ability to borrow; minister of finance approval required in four of these cases.
  - Some countries operating on a true cost-of-collection formula believe their budgets are larger than would otherwise be the case, though full allocations are often not made available due to fiscal constraints.

### Human resources (HR) autonomy and performance
- HR autonomy widely accepted as desirable; alternatives seldom considered.
- HR autonomy often stronger than financial autonomy but remains circumscribed by other factors.
- Surveyed authority and outcomes:
  - 19 of 21 reported full authority to recruit externally with final say in selection.
  - 17 of 21 reported full authority to determine organizational structure and classify positions.
  - Reported HR performance gains (self-reported):
    - Improved recruiting times: 11/21.
    - Increased remuneration: 17/21.
    - Better timeframes for internal staffing: 12/21.
- Measurement and attribution challenges:
  - Fewer than half of cases with reported HR improvements provided quantifiable measures.
  - Where quantified, results were often not compared against external benchmarks.
  - Only three countries provided comparisons for remuneration with outside benchmarks; one of these also provided quantifiable attrition and retention data.
  - Slightly more than half of RA countries reported having a performance pay plan (about half of these plans consist of a bonus scheme related to achievement of revenue targets), but only one country could demonstrate how RA status led to improvements in the development of performance pay plans.

*Source: IMF staff.*

### introduction of performance pay was under active consideration. It is not clear from this

### _wp06240 - introduction of performance pay was under active consideration. It is not clear from this

### HR autonomy, retention, and attrition
- Increasing retention of key employees and reducing attrition rates are critical objectives of increased HR autonomy.
- Most respondents indicated there were too many factors affecting retention and attrition to permit meaningful measurement or attribution of results.
- External factors cited as having a much more profound impact than HR policy:
  - the general economic situation
  - retirement and pension-related issues
  - downsizing initiatives
  - perceptions about public sector employment
- As a result, RAs surveyed generally had very little measurable and quantifiable data on attrition and retention, and very little information about trends.

### Training and development
- Only 7 of 21 RAs surveyed indicated that the number of training days per employee had increased.
- Fully half did not report on this question or did not know.
- The remainder reported that training days per employee had gone down; respondents attributed decreases usually to exogenous factors, such as budget or staff reductions.
- None of the information provided can assist in answering the main question about the impact of the RA governance framework on training and development.

### Staff discipline, integrity, and remuneration
- Many activities are being taken by RA countries regarding staff discipline and integrity.
- All specific initiatives cited in the survey are also undertaken by countries in a non-RA governance environment.
- There does not appear to be any particular set of initiatives RAs have launched in developing integrity plans that could not also be applied in a non-RA environment.
- While an adequate level of remuneration is only one factor in a modern approach to integrity, it appears to be the main area where the RA governance model could make a difference.

### Constraints on RA autonomy and practical limits
- Even when RAs operate outside the public service regime, real autonomy can be circumscribed by other factors:
  - operational budgets often continue to be provided by the government
  - overall salary cost must often be met from within the government-determined budget
  - government-determined funding dictates limits on job structures, salary ranges, and economic increases, including those from collective bargaining
- RAs remain public institutions and must have transparent human resources policies reflecting their public nature.
- Consequently, RAs often end up implementing HR regimes based on the same principles as the regimes they left.

### RAs and Non-RAs — flexibilities and benchmarks
- Many countries with traditional government departments seem to enjoy many flexibilities once considered possible only through RAs.
- Preliminary OECD research data (cited) show slight differences between RAs and non-RAs for three aspects of management authorities:
  - establish and design the internal structure
  - allocate and re-allocate the budget
  - determine the level and mix of staff
- This pattern raises the question of whether many flexibilities sought by RAs may be available to traditional departments as part of general modern management and comptrollership initiatives.

### Box 7 — Australian Taxation Office Staff Remuneration (summary)
- The Australian Taxation Office (ATO) remunerates its 20,000 staff within a four-tiered structure:
  1. ATO head and immediate deputies: statutory office holders with remuneration set by an independent review tribunal.
  2. Senior Executive Service (SES) staff (~200 officers): remunerated by individual Workplace Agreements (WAs), grouped into salary bands, mix of permanent and fixed-term contracts (typically two to five years); all SES officers participate in a performance bonus scheme offering bonus payments from 5 percent of base pay (for fully effective performance) to 15 percent (for exceptional performance).
  3. Executive-level staff (~1600): pay and conditions in a specific executive-level staff agreement negotiated by the ATO head; pay rises must be offset by productivity improvements; participate in a performance pay scheme similar to SES.
  4. Lower-level staff (~19,000): pay and conditions in a General Employees Agency Agreement (GEAA) negotiated by the ATO head and staff/unions; any pay rise must be offset by productivity improvements.
- For tiers 3 and 4, Workplace Agreements may be used to offer individual remuneration packages for particular staff, especially where attraction or retention issues exist.

### Conclusions (numbered findings)
- Defining an RA
  1. A generally accepted or approved definition of an RA does not exist.
- RA and performance
  2. The proposition that RAs have led to better revenue administration performance compared to what would have been the case had they remained a traditional department of government has neither been proved nor disproved.
  3. There is a great deal of difficulty in attributing changes in performance (outcomes) to a particular governance framework.
- Reform and modernization
  4. There is no basis to conclude that reform and modernization of revenue administration is more likely within an RA governance framework than without.
  5. Amongst countries with an RA, many see the existence or creation of the RA governance model as a catalyst to promote and extend reform.
- Autonomy
  6. The general case has not been made that the degree of autonomy can be specifically related to improvements in performance or the ability to undertake reform and modernization.
  7. RAs remain closely linked to government in terms of the role of the minister and accountability to the executive and to parliament.
  8. RAs frequently have substantial administrative autonomy (finance, budget, asset control), but the comparative advantages may be less significant than thought; public service-wide treasury decisions may take precedence over RA budget “guarantees.”
  9. HR autonomy is almost always accepted as desirable for an RA to address poor performance; however, alternative solutions may not be sufficiently considered.
  10. RA countries have received significant HR autonomy and used it to improve HR performance, but quantifying performance improvements and linking them to HR autonomy has proved difficult.
- Cost benefit
  11. Cost-benefit analyses were not and are not being undertaken with respect to the implementation of RAs, nor has an attempt been made to assess the opportunity cost associated with setting up the RAs.
- Perceptions
  12. The case for establishing RAs has been largely intuitive.
  13. Notwithstanding the lack of a demonstrated basis for establishing an RA, there is a strong perception among adopters that the governance model has made a significant contribution to reform and improved performance.

### Summary advice and policy recommendations
- Core advice to countries considering establishing an RA:
  1. Establishing an RA should not be viewed as a panacea—creating a RA is clearly expensive, may take a long time and require significant effort, and does not actually improve tax administration effectiveness.
  2. Before considering a choice of governance model, revenue administrations should clearly identify and articulate problems and deficiencies, and consider strategies for reform and modernization based on international best practice.
  3. Only after a proper diagnosis is undertaken should a full assessment be made of the extent to which the RA governance model might satisfy the problems and reform strategies identified.
  4. Whatever the governance model, continuing political commitment is of the utmost importance in establishing and maintaining a professional and effective revenue administration.
  5. The RA model alone does not lead to improved effectiveness and taxpayer compliance—its establishment must be coupled with a serious commitment and plan for reform; modernization is ultimately the result of improvements in organizational structures, systems, and processes, including well designed programs of services and enforcement, sound allocation of resources, and effective management.
- Suggested areas for further research (items as listed):
  9 Developing an “index” to determine relative autonomy or degree of autonomy of RAs.
  9 Correlating such autonomy to external measures, such as changes in the Transparency International corruption index or other measurable data.
  9 Using political economy analysis with detailed case studies to further explore some of the specific attribution problems identified by this paper.
  9 Undertaking comparative studies with governance changes in other domains (such as the central banks).
  9 Assessing “actual” autonomy versus the autonomy prescribed by law.
  9 Reviewing the actual operations and contributions of RA boards to determine effectiveness.
  9 Assessing the nature of customs operations within the RA, and examining the extent of customs-tax integration actually occurring.

*Source: _wp06240 - introduction of performance pay was under active consideration. It is not clear from this*

### Bibliography for the Literature Review

### _wp06240 - Bibliography for the Literature Review

### Bibliography (selected works cited)
- Castro, Patricio, and James Walsh, 2003, “The Organization of Customs Administration,” in Changing Customs: Challenges and Strategies for the Reform of Customs Administration, ed. by Michael Keen (Washington: International Monetary Fund).
- Cunningham, Bert, 2004, “Re-Engineering and Re-Structuring the Civil Service,” Customs and Excise, Mauritius.
- Delay, Simon, Nick Devas, and Michael Hubbard, 1999, “Reforming Revenue Administration: Lessons from Experience—a study for the International Development Department,” School of Public Policy, University of Birmingham (May).
- Di John, Jonathan, and James Putzel, 2005, “The Case of Uganda,” paper for Conference on Institutional Change for Growth and Poverty Reduction in Low-Income Countries, July 6–7, 2005 (Washington: International Monetary Fund).
- Fjeldstad, Odd-Helge, 2005, “Revenue Issues and Corruption: An Overview of Issues,” Workshop on Corruption in Public Financial Management: Donor Perspectives, February 16–17, 2005, Michelsen Institute, Bergen, Norway.
- Gray, John, and Emma Chapman, 2001, “Evaluation of Revenue Projects Synthesis Report Volume I,” UK Department for International Development.
- Hindriks, Jean, Michael Keen, and Abhinay Muthoo, 1999, “Corruption, Extortion and Evasion,” Journal of Public Economics, Vol. 74, No. 3, pp. 395–430.
- Jenkins, Glenn P., 1994, “Modernization of Tax Administrations: Revenue Boards and Privatization as Instruments for Change,” Bulletin for International Fiscal Documentation, Vol. 48, No. 2 (February).
- Manasan, Rosario, 2003, “Tax Administration Reform: (Semi)-Autonomous Revenue Authority Anyone?,” Discussion Paper Series No. 2003–05 (revised), Philippine Institute for Development Studies.
- Mann, Arthur J., 2004, “Are Semi-Autonomous Revenue Authorities the Answer to Tax Administration Problems in Developing Countries?—A Practical Guide,” research paper for the project Fiscal Reform in Support of Trade Liberalization (USAID funded) (August).
- McCarten, William, 2005, “The Role of Organizational Design in the Revenue Strategies of Developing Countries,” World Bank Institute.
- Meyer, Laurence, 2000, “The Politics of Monetary Policy: Balancing Independence and Accountability,” U.S. Federal Reserve System, remarks at the University of Wisconsin (October).
- Silvani, Carlos and Katherine Baer, 1997, “Designing a Tax Administration Reform Strategy: Experience and Guidelines,” IMF Working Paper No. 97/30 (Washington: International Monetary Fund).
- Taliercio, Robert, Jr., 2004, “Designing Performance: The Semiautonomous Revenue Authority Model in Africa and Latin America,” World Bank Policy Research Working Paper 3423 (Washington: World Bank).
- Waller, Michael, 1996, “Danish Tax and Customs Administration,” International Training Division, Department for Personnel and Organizational Development, Denmark.
- Waller, Michael, 1997, “Perspectives for Integrating the Administration of Internal Taxes, Customs Duties and Social Security Contributions: Effects in a Decentralized State,” Canada for CIAT 1997 Technical Conference.
- Waller, Michael, 2001, “Review of Integrity Management in the Independent Revenue Authorities of Ghana, Tanzania and Uganda,” Transparency International: the Coalition Against Corruption, Working Paper (June).
- Waller, Michael, 2002, “Evaluation of Revenue Projects- Synthesis Report,” Evaluation Department, DFID.
- Waller, Michael, 2002, “Options for the Establishment of a Central Revenue Authority in Mozambique,” Workshop Discussion Paper, Ministry of Planning and Finance- Government of Mozambique, IMF, DFID.
- Waller, Michael, 2003, “Consultancy Support to the Implementation of the Mauritius Revenue Authority,” Price Waterhouse Coopers.
- Waller, Michael, 2003, “Supporting Institutional Reforms in Tax and Customs: Integrating Tax and Customs Administrations,” paper prepared for World Bank Group by PLS Ramboll and supported by the Danish Governance Trust Fund.
- Waller, Michael, 2005, “Revenue Authorities and Taxation in Sub-Saharan Africa: A Concise Review of Recent Literature for the Investment, Competition and Enabling Environment Team, DFID.

### IMF Fiscal Affairs Department — Survey on Revenue Authorities (November 2005): purpose and scope
- Purpose:
  - To seek information allowing assessment of the relative success or failure of the revenue authority model in improving revenue administration performance.
  - To combine survey responses with academic papers and internal IMF information to prepare an IMF analysis and assessment of revenue authorities and the conditions and issues affecting revenue performance.
- Definition note (footnote 33):
  - A revenue authority, sometimes referred to as a semi-autonomous revenue authority, refers to a type of governance model for revenue administration where traditional ministry of finance departments (tax and sometimes customs administrations) are established as an organization with a degree of autonomy or independence from government and from standard public service policies. Many revenue authorities are corporate bodies, governed by a board, with varying degrees of budgetary and human resources autonomy.
- Anticipated deliverable:
  - Evaluation paper expected to be available by the end of June 2005 and a copy to be sent to respondents.

### Questionnaire structure (five sections)
- I. Basic information on the revenue authority (RA)
  - Items requested include history, enabling law, formal regulations, organization charts (prior to RA, initial RA, current), high-level organization unit staffing and budgets, public corporate plan excerpts.
  - Detailed descriptions requested for: degree of autonomy (legal form, funding arrangements, budget flexibility, financial policies, HR regime), governance framework (role of minister of finance, board, Director General/CEO), accountability (reporting to government/parliament, audit arrangements), scope (taxes administered, scope of operations).
- II. Original rationale for considering and adopting the RA
  - Requests ranking in priority order of listed reasons (examples provided) and description of the case presented to government, critical success factors, parliamentary reactions.
  - Reasons listed for ranking include:
    - Low effectiveness of tax administration and poor levels of compliance
    - Impediments caused by poor civil service human resources policies (recruitment, remuneration, promotion, training, discipline)
    - Perceptions of political/ministerial interference
    - Need for a catalyst to launch broader revenue administration reform (modernized operations, improved automation, integrated and function-based structures, and so on)
    - Poor communication and data exchange among the existing revenue departments (e.g., income tax, sales tax, customs)
    - High levels of corruption
    - Desire to create “islands of excellence” within the public sector
    - Other reasons (itemize and rank)
- III. Implementation of the revenue authority
  - Requests process description: duration, stages, project management techniques, consultants engaged, implementation costs, other implementation details.
- IV. Self-assessment of RA effectiveness
  - Requests: specific objectives initially set, evaluation processes and criteria, results of evaluations and modifications, and a structured table to quantify the RA governance model’s impact (scale 0–10) across specified reform areas.
  - Reform areas to be scored (definitions provided) include:
    - Increase tax revenues
    - Introduce self-assessment
    - Integrate tax administration
    - Introduce taxpayer segmentation
    - Improve taxpayer and trader compliance management
    - Improve services to the public
    - Introduce risk management
    - Improve automation
    - Simplify laws, regulations, and procedures
    - Improve valuation, classification and origin (where customs included)
    - Improve human resources regime
    - Improve remuneration
    - Improve budget provision for the operation of the revenue administration
    - Improve anti-corruption measures
    - Provide a catalyst or momentum for reform
    - Improve public confidence
  - Additional questions:
    - Effect of including customs in the RA on tax-customs relationship (illustrate with examples)
    - Existence and publication timing of public statement of taxpayer rights and obligations
    - Harmonization of tax administration procedures among tax types and timing
    - Changes in RA management: number of board chairpersons and CEOs since establishment, average tenure
- V. Quantitative and qualitative indicators of RA performance
  - Request for annual time-series data ideally beginning 2 or 3 years prior to RA establishment through to end 2004; accept partial time series where available.
  - Table of quantitative data requested across years 1995–2004 for indicators including (items and headings preserved exactly as in source):
    - Tax revenues (percent of GDP)
      - Total
      - Corporate income tax
      - Personal income tax
      - Excises
      - Customs
      - VAT
      - Other
    - Arrears (at year end)
      - Nominal
      - Percent of annual collections
    - Registration (# of taxpayers)
      - Corporate income tax
      - Personal income tax
      - VAT
      - Excises
    - Income tax returns
      - Total returns (all taxes)
      - Average time required to process
      - Returns filed electronically
    - Customs (if included in RA)
      - Total customs
      - Declarations filed electronically
      - Declarations subject to physical inspection
        - Average release time
    - Administrative costs
      - Total expenditures (not including donor financing)
      - Donor funded expenditures
    - Dispute resolution
      - Objections (internal)
        - Average completion time
      - Appeals (quasi-judicial)
        - Average completion time
    - Human resources
      - Staffing levels at year end

### Contact points for queries (as provided)
- Ms. Maureen Kidd: MKIDD@imf.org (English/French)
- Ms. Katherine Baer: KBAER@imf.org (English/Spanish)
- Ms. Carla Cullati: CCULLATI@imf.org (for all other issues)

*Source: _wp06240 - Bibliography for the Literature Review (IMF PDF).*

### 1. Management

### 1. Management

### Survey context and distribution
- In 2005, FAD sent detailed questionnaires to more than 20 member countries who had adopted the revenue authority 34 concept for revenue administration; a total of 14 countries responded.
- A revised and considerably shortened questionnaire was developed to better reflect the more than 30 IMF member countries that use a revenue authority model.
- The revised questionnaire is being sent to all those countries who did not respond to the 2005 survey, as well as to an additional 12 member countries.
- Anticipated evaluation and publication timeline:
  - Evaluation of the additional information: completed by April of 2006.
  - Final paper on revenue authorities: available by mid-year.
- Contact points for queries:
  - Ms. Maureen Kidd at MKIDD@imf.org (English/French)
  - Ms. Katherine Baer at KBAER@imf.org (English/Spanish)
  - Ms. Carla Cullati at CCULLATI@imf.org (other issues)

### Questionnaire structure (revised)
- The revised questionnaire is divided into three sections:
  - I. Basic information on the revenue authority
  - II. Original rationale for adopting the revenue authority
  - III. Self-assessment of revenue authority effectiveness
  - IV. Practical results of human resources autonomy

### I. Basic information on the Revenue Authority (RA)
- Requests to respondents:
  - Provide a copy of the initial legislative authority (enabling law and relevant regulations or decrees) and any significant revisions made subsequently.
  - Provide high-level organization charts of the RA: (a) immediately prior to the implementation of the RA; and (b) the current organization chart.
  - Provide descriptions of the RA from any public documents such as corporate plans, annual performance reports, etc.
  - List all the taxes administered by the RA and describe the scope of operations of the RA (i.e., tax administration, customs administration, collection of social contributions, collection of other fees and taxes, etc.)

### II. Original rationale for considering and adopting the RA
- Respondents are asked to rank in priority order possible reasons for the initial establishment of the revenue authority, including (but not limited to):
  - Low effectiveness of tax administration and poor levels of compliance.
  - Impediments caused by poor civil service human resources policies (recruitment, remuneration, promotion, training, discipline).
  - Perceptions of political/ministerial interference.
  - Need for a catalyst to launch broader revenue administration reform (modernized operations, improved automation, integrated and function-based structures, etc.).
  - Poor communication and data exchange among the existing revenue departments (e.g., income tax, sales tax, customs).
  - High levels of corruption.
  - Desire to create “islands of excellence” within the public sector.
  - Other reasons (itemize and rank).

### III. Self-assessment of RA effectiveness
- Purpose: identify and quantify the specific impact of the revenue authority governance model on revenue administration reforms.
- Respondents are asked to quantify degree of impact using a scale of 1 to 10 (10 being high impact, 1 low and 0 no impact). If not applicable, indicate n/a.
- Reform areas to be scored include:
  - Increase tax revenues
  - Introduce self-assessment — legislative changes to move from administrative assessment of taxes (including trade taxes) to self-assessment.
  - Integrate tax administration — moving away from a type of tax structure (for example, separate administration of income tax and VAT)
  - Introduce taxpayer segmentation — development of specific administrative regimes based on taxpayer size.
  - Improve compliance management — operational practices including audit, management of arrears, filing compliance, etc.
  - Improve services to the public
  - Introduce risk management — adopting risk management and risk profiling practices particularly in audit and post-assessment compliance.
  - Improve automation
  - Simplify laws, regulations, and procedures
  - Improve valuation, classification and origin — applies where customs administration is part of the revenue authority
  - Improve human resources regime — refers to improved recruitment, staff development and training
  - Improve remuneration
  - Improve budget provision for the operation of the revenue administration
  - Improve anti-corruption measures
  - Provide a catalyst or momentum for reform — using the fact of the creation of the RA to provide a catalyst for revenue administration reform.
  - Improve public confidence — the extent to which the adoption of the RA governance model may have improved public confidence in the institution.

### IV. Practical results of human resources autonomy
- Increased autonomy in human resources is a major feature of most revenue authorities. Respondents are requested to provide quantitative or qualitative information on:
  - Recruitment
    - Has the ability to recruit staff from outside the RA improved?
    - Does it take less time?
    - Does the RA have more or final say in who gets hired, compared to the situation before the RA?
  - Remuneration
    - Have salary levels improved?
    - Can such improvements be quantified (for example, average wage in the RA now compared to average wage in the central bank now, versus the same comparison before the RA was established)?
  - Performance pay
    - Is there a better basis for performance pay (bonuses) than there was prior to the RA?
  - Retention
    - Are employees staying longer with the organization?
    - Have attrition rates declined?
    - Can these issues be quantified?
  - Internal staffing (promotions)
    - Have time frames for internal staffing improved?
    - Are there fewer restrictions than before the RA?
    - What are promotions based on? Merit? Competencies? Seniority?
  - Organization and positions
    - Does the RA have full authority in these areas?
    - On what basis are positions classified? (by title, by job description, etc.)
  - Staff training and development
    - Has the number of training days per employee per year increased?
    - Has a specific training institute been established?
    - Are there any specific measures used to quantify training and development improvements attributable to the RA?
  - Staff discipline and integrity
    - Are there specific developments in this area that have been made possible by the establishment of the RA?

### Follow-up Human Resources Autonomy questions (ANNEX III)
- Sent to countries that had answered the November 2005 questionnaire; repeats and elaborates the IV issues above in numbered form:
  - 1. Recruitment
  - 2. Remuneration
  - 3. Performance pay
  - 4. Retention
  - 5. Internal staffing (promotions)
  - 6. Organization and positions
  - 7. Staff training and development
  - 8. Staff discipline and integrity

*Source: _wp06240 - 1. Management, International Monetary Fund, Fiscal Affairs Department, Survey on Revenue Authorities, January 2006.*

### ANNEX                                                                        IV

### ANNEX IV — Revenue Authorities—Design and Scope Considerations

### Overall design of the revenue authority
- Core concept: an RA takes one or more traditional revenue departments from the ministry of finance and amalgamates them into a separate agency with some degree of autonomy from the government and from public sector policies.
- Design elements determining autonomy:
  - legal form of the RA (corporate character versus non-corporate),
  - provisions governing funding and financial management policies,
  - human resources regime,
  - organizational arrangements.
- Legal form
  - Corporate character can imply the right to own assets and greater managerial autonomy; absence of corporate character implies far less autonomy and greater government control.
  - Enabling legislation should provide a clear legal mandate covering roles, functions, powers, and accountabilities, and may identify initial organizational units, employees, assets.
  - Some jurisdictions include parliamentary review provisions in the RA legislation.
  - Enabling legislation often addresses assets and borrowing (right to own assets, borrow or invest funds), but borrowing is frequently subject to prior minister of finance approval.
  - Legislation should specify the extent to which public service–wide laws (human resources, collective bargaining, public finance and accounting) continue to apply.
- Organizational autonomy
  - Can include authority to set staff organization at headquarters and field offices, open/close offices, and adjust organizational structure.
  - Government sensitivities (physical national presence, customs locations, regional balance) may constrain organizational autonomy.
- Need for governance framework
  - A corporate RA typically needs a management board and transparent accountability mechanisms to executive and legislature; funding arrangements should be set out in legislation.

### Funding
- Two basic funding methods:
  - Normal parliamentary appropriation using standard PEM and budget decision processes (least autonomy).
  - Percentage-of-collection funding formula (collection fee) specified in legislation.
- Arguments for percentage-of-collection:
  - Insulates RA from suboptimal budgeting, provides greater certainty, can incentivize improved performance.
- Arguments against percentage-of-collection:
  - Collections are influenced by many factors beyond RA effort (general economy, tax policy changes).
  - May create perverse incentives emphasizing collections over other functions (e.g., taxpayer service).
- Practical arrangement:
  - Legislation sometimes sets a percentage-of-collection fee as a percentage of total estimated net revenues; estimated revenues preferred to actual revenues for budgeting before the fiscal year.

### Financial management policies
- Key issues:
  1. Degree of application of public service legislation in financial administration, accounting, procurement, asset management.
  2. Degree of budget flexibility (movement of funds across budget categories).
- Typical autonomy areas: budget flexibility, procurement, asset management.
- Consider whether RA remains part of government accounting entity and the extent existing accounting and financial administration policies continue to apply.
- Board responsibilities
  - Where the board assumes responsibility for financial policies, it must ensure principles of responsible and transparent financial management.
- Budget flexibility
  - Treasury/budget office normally sets cross-line fund movement rules; a more autonomous RA may require board-determined policies to allow rapid operational responses while respecting prudent stewardship principles.
- Financial administration and accounting
  - Fiduciary responsibilities (accounting practices, payment, chart of accounts, accounts receivable, invoicing, contracts) may remain aligned with government policies or be customized under board oversight.
- Procurement
  - RA procurement policies must uphold fair and open competition, value for money, transparency, and compliance with trade agreements while enabling quicker response than outmoded civil service systems.
- Asset management
  - Policies on life-cycle management, lease versus purchase, space optimization, asset disposal are required; ownership of assets usually shifts asset policy responsibility to the board.
- Capacity implications
  - Significant development work needed to design comprehensive financial management policies.
  - RA must recruit sufficiently skilled managers and officers in the financial area commensurate with expanded finance department responsibilities.

### Human resources regime
- Encompasses staffing, training, compensation, performance pay, dismissal, discipline, and sometimes collective bargaining.
- Autonomy in human resources is a key differentiator for RAs.
- Board accountabilities in human resources (depending on degree of autonomy) might include authority over:
  - the overall human resources regime for the RA;
  - the salary scheme for employees and positions;
  - the performance assessment scheme, including performance-related incentives;
  - all matters relating to conditions of work, including hours of work and overtime arrangements;
  - standards of discipline, and sanctions for breaches of discipline including termination or suspension;
  - employee termination or demotion for poor performance;
  - employment-related expenses or other terms and conditions of employment.

### Governance framework
- Governance commonly involves the minister of finance, the governing board, and the CEO; roles and responsibilities of each determine practical autonomy.

Role of the minister of finance
- The legislated role of the minister affects RA autonomy: control/supervision, appointment of chair/members/CEO, budget approval.
- Too much ministerial authority reduces RA autonomy; too little risks loss of public-sector sensitivity.
- In corporate RAs, government acts as “shareholder” and needs appointment influence over board chair, members, and CEO.
- Many enabling laws include a ministerial power to issue directives to the corporate body; such directives require maximum transparency (publication in official gazette) and are expected to be rarely used.

Role of the board
- Board types:
  - advisory boards (where minister has strong role and RA autonomy is limited),
  - management boards with strong legislative functions.
- Boards are almost always prohibited from operational execution of tax and customs laws and from access to taxpayer-specific information to avoid conflicts of interest.
- Possible board functions (dependent on autonomy level):
  - oversee administration, management, and organization of the RA;
  - oversee management of resources, services, property, personnel, and contracts;
  - approve strategic plans and the budget;
  - approve the annual report;
  - establish policies and by-laws for board functioning.
- Board meetings: chair presides and exercises by-law–prescribed powers.
- Ex-officio members: governments often include fixed ex-officio non-voting appointees to balance government representation with board autonomy.
- CEO and board composition considerations:
  - debate exists on whether CEO should be a board member;
  - legislation should require board members to have experience/knowledge in finance, accounting, taxation, public administration, law, or related fields.
- Board size guidance:
  - literature suggests boards of 7 to 12 members are optimal; larger boards are unwieldy, smaller boards may lack comprehensive skills.

Role of the CEO
- CEO typically supervises and manages day-to-day RA operations and is subordinated to the board in management matters.
- The RA may vest powers and obligations under revenue laws either in the CEO (who delegates) or continue to grant them directly to departmental heads (which can exclude CEO from operations).
- CEO has dual accountabilities: subordinate to the board for management; directly accountable to the legislature and government for execution of operational powers under tax and customs laws.

Accountability to the government
- Greater RA autonomy necessitates unique, structured, transparent accountability mechanisms in legislation.
- Internal and external audit:
  - boards generally review internal audit outputs; independent internal audit function reports directly to the CEO (debate exists on reporting to the board).
  - external audit choices: board-appointed external auditor, or the auditor general (reporting to parliament) as external auditor.
- Ombudsman:
  - legislation may prescribe an ombudsman for administrative oversight (service quality, taxpayer treatment), excluding tax/customs matters covered by redress mechanisms in base legislation.
- Reporting to parliament:
  - common reporting forms: annual corporate plan and budget (forward-looking) and annual report (retrospective) to ensure transparency.

### Scope of activities and responsibilities
- Typical scope: central administration of direct and indirect taxes forms the backbone; many RAs include customs administration; some include local tax collection units or social security contribution collection.
- Trade-offs in scope:
  - Broad scope across multiple revenue agencies can yield economies of scale and synergies.
  - Expanded scope increases management complexity.

### Legislative base (selected country examples and mandates)
- Argentina — Executive Decree 1156/96 (1996/rev. 1997): Autonomous entity in administrative terms; implements tax and customs policy, including imposition, collection, and auditing of taxes, taxes on import and export, control of international trade in goods, collection of social security contributions and related responsibilities.
- Botswana — Botswana Unified Revenue Service Act (2003): Body corporate; assessment of collection for tax, administration and enforcement of laws.
- Canada — Canada Customs and Revenue Agency Act (1999/rev. 2004): Agent of the government—body corporate; administration and enforcement of pertinent revenue legislation.
- Colombia — Law 49 (1990/rev. 1991/1992/1997/1999): Has legal personality; administration of income and supplementary, national, stamp and sales taxes; customs duties and other national taxes for which no other state entities are responsible—as well as the management and administration of customs processing.
- Ethiopia — Federal Inland Revenue Authority Act (1997/rev. 2003): Has legal personality; enforce and implement tax laws—assess, collect, and execute federal taxes.
- Guatemala — Organic Law of the Superintendency of Tax Administration (Decree 1-98): Separate legal status—a decentralized state entity with functional, economic, financial, technical, and administrative autonomy; perform tax and customs administration functions stipulated in pertinent legislation.
- Italy — Decree 300/99 (1999/rev. 2003): Legal persona—has regulatory administrative, asset management, organizational, accounting, and financial autonomy; managing all taxes which have not been otherwise assigned.
- Kenya — Kenya Revenue Authority Act (1995/rev. 2005): Agency of the government—body corporate; administer and enforce the revenue laws.
- Lesotho — Lesotho Revenue Authority Act 2001: Agency of the government—body corporate; assessment, collection, and receipt of specified revenue.
- Mauritius — Mauritius Revenue Authority Act (2004) (prev. Unified Revenue Authority Act): Agent of the state—body corporate; assessment and collection of tax; and management, operation, and enforcement of the revenue laws.
- Mexico — Tax Administration Service Act (1995/rev. 2003): Decentralized agency of the MOF—managerial autonomy for its work, technical autonomy for issuing decisions; responsible for implementing tax and customs legislation.
- Peru — Enabling Law 24849 (decree 501) (1988/rev. 2002): Decentralized public institution with legal status under public law—has economic, administrative, functional, technical and financial autonomy; manage, audit and collect taxes; manage and regulate international trade in goods.
- Rwanda — Rwanda Revenue Authority Act 1997: A “public” establishment and a body corporate; assess, collect, administer, and account for fiscal and customs revenue.
- Singapore — Inland Revenue Authority of Singapore Act (1992/rev. 2005): Agent of the government—body corporate; administer, assess, collect, and enforce payment of taxes.
- South Africa — South Africa Revenue Service Act (1997/rev. 2002): Public entity—organ of the state within the broad public administration, but outside PS; the efficient and effective collection of revenue; control over import, export, manufacture, movement, storage or use of goods.
- Spain — Article 103 (State Tax Administration Agency Law 31-1990) (numerous amendments): Legal entity governed by public law with full public and private authority—part of central government attached to MOF through treasury; effective application for tax and customs systems.
- Tanzania — Tanzania Revenue Authority Act (1996/rev. 2001): Agency of the government—body corporate; assess, collect, and account for government revenues; administer the revenue laws.
- Uganda — Uganda Revenue Authority Act (1991/rev. 1998): Agency of the government—body corporate; assess, collect, and account for government revenues.
- Venezuela — National Integrated Customs and Tax Administration (SENIAT) Law 2001 (earlier version 1995): Autonomous service attached to MOF—NOT a corporate body; applying the customs and tax laws and exercising and managing and developing powers related to the implementation of customs and tax policies.
- Zambia — Zambia Revenue Authority Act 1994: Body corporate; assess, charge, levy, and collect revenue due to the government.
- Zimbabwe — Zimbabwe Revenue Authority Act 2001: Body corporate—agent of the state; assessing and collecting and enforcing the payment of all revenues.

*Technical note prepared by William Crandall (May 2004).*

### ANNEX                                                                        VI

### ANNEX VI–VIII (Selected Tables on Revenue Authorities)

### General features of the RA (from Annex VI)
- Role of ministry of finance (MOF)
  - Examples: Argentina—Minister for economy and production—general supervision and legal control; Colombia—Minister of finance and public credit—no indication of nature of role; Italy—MOF responsible—relationship based on negotiation of a framework document.
  - Classification: MOF role recorded as either Inside (e.g., Colombia, Ethiopia) or Outside/General supervision (e.g., Argentina, Botswana, Guatemala, Kenya, Rwanda).
- Public service status
  - Many RAs are Outside the public service (Argentina, Botswana, Canada, Guatemala, Kenya, Lesotho, Mauritius, Mexico, Peru, Rwanda, Singapore, Tanzania, Uganda, Zambia, Zimbabwe).
  - Some are Part of public service or limited autonomy: Italy (Part of public service), Spain (Part of public service (limited autonomy)).
- Authorization to borrow / to own assets / HR autonomy
  - Authorization to borrow: mix of Yes and No across countries (e.g., Botswana—Yes—with MOF approval; Canada—No; Kenya—Yes).
  - Authorization to own assets: predominantly Yes across listed countries (Argentina Yes; Canada Yes; Mexico Yes).
  - HR autonomy: mixed. Examples: Argentina—Yes; Colombia—No; Italy—No; Spain—Yes- (limited).
- Funding mechanisms (explicit numeric arrangements preserved)
  - Argentina: Percentage (approximately 2.75) of collection formula, subject to executive branch revisions, directly retained by the RA. Unused funds may be carried over to following year.
  - Colombia: percent of revenue collected (2 percent is cited) plus other appropriations.
  - Guatemala: 2 percent of total taxes collected (domestic and trade) + any other funds approved in state budget.
  - Kenya: 1.5 percent of estimated revenue + 3 percent of excess revenue (not directly retained).
  - Lesotho: 2 percent of estimated revenue—plus additional funds allocated by minister for exceptional performance.
  - Mexico: Unused funds up to 25 percent may be carried over but related payments must be authorized in federal budget.
  - Peru: 2.5 percent of taxes on tariff on import; 2 percent of tax collection + other.
  - Singapore: 2 tier funding: percent of expected revenue for operations + incentive or penalty element—may retain all surpluses.
  - Spain: Normal budget and parliamentary appropriation + a percent of revenues with a cap as established in the annual budget law.
  - Tanzania/Uganda: Normal budget and parliamentary appropriation + option for retention of percent of revenue collected (minister to decide in Tanzania; retention may be authorized by minister in Uganda).
- External audit/accountability institutions (as stated)
  - Examples: Argentina—National audit office; Canada—Auditor general; Colombia—Comptroller general; Guatemala—General comptroller of the accounts of the nation; Italy—Court of auditors; Kenya—Auditor general; Lesotho—Independent auditors appointed by board—government may request AG to audit; Mexico—Auditor general; Peru—Comptroller general; Singapore—Auditor general or other approved by MOF; South Africa—Auditor general; Tanzania—Auditor general; Uganda—Auditor general; Zimbabwe—Auditor general.

### RA governance framework (from Annex VII)
- Board existence and type
  - Many RAs have empowered management boards (Botswana; Canada; Guatemala; Italy; Kenya; Lesotho; Mauritius; Mexico; Rwanda; Singapore; Tanzania; Uganda; Zambia; Zimbabwe).
  - Some RAs have no board or advisory-only boards (Argentina—Yes—advisory only; Colombia—No; Ethiopia—No; Peru—No; South Africa—No (advisory board prior to 2002; now ad hoc advisory ctes only); Spain—No).
- Board size and private sector representation (examples)
  - Canada: 15 (private sector rep: Yes).
  - Kenya: 10 (private sector rep: Yes).
  - Botswana: 7 (private sector rep: Yes).
  - Italy: 6 + DG as chair (private sector rep: Yes).
  - Mauritius: 7 (private sector rep: Yes).
  - Rwanda: 8 (private sector rep: Yes).
  - Singapore: 5-10 (private sector rep: Yes).
  - Zambia: 9 (private sector rep: Yes).
  - Uganda: Up to 7 (private sector rep: Yes).
- CEO/Executive powers and delegation
  - CEOs commonly have vested powers and may sub-delegate (e.g., Argentina—Yes—may sub-delegate; Botswana—Yes—may sub-delegate; Canada—Yes– may sub-delegate; Kenya—Yes—may sub-delegate).
  - Some boards have operational powers that may delegate to CEO (Zambia—Board has vested powers—may delegate to CEO).
- Appointment authorities (chair, board members, CEO)
  - Appointment processes vary; examples preserving exact language:
    - Botswana: Law names secretary for financial affairs of MOF; MoF appoints chair; MOF appoints board members on recommendation of board; MOF appoints CEO.
    - Canada: Government appoints chair; Government appoints board members on recommendation of provinces; Government appoints CEO.
    - Guatemala: Minister of public finance is president of the board of directors; President of the republic (from a list drawn up by a legally constituted nominating commission) appoints board members; President of the republic on recommendation of board appoints CEO.
    - Italy: Law names DG as chair; Parliamentary decree on recommendation of minister appoints board members; Presidential decree appoints CEO.
    - Mexico: Law names minister as chair; MOF names 3 board members; President of Mexico names 3 board members; President of Mexico appoints CEO.
    - Singapore: Minister appoints chair; Minister appoints board members; Board appoints CEO.

- Notable governance footnote (exact text preserved)
  - Spain: "The RA has a president as well as a director general. The president is the state secretary of the treasury or a person of the same rank appointed by government. The president has broad responsibilities for achieving agency objectives as well as for acting as its legal representative."

### RA scope of activities (from Annex VIII)
- Tax types administered (matrix Y/N preserved per country)
  - Countries and their Y/N status for key taxes (as provided):
    - Argentina: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security Y.
    - Botswana: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes N; Customs Y; Social Security N.
    - Canada: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs N; Social Security Y.
    - Colombia: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax Y; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.
    - Ethiopia: Income Tax Y; VAT Y; Gaming Tax Y; Stamp Tax Y; Excise Tax N; Property Tax N; Other Taxes Y; Customs N; Social Security N.
    - Guatemala: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax Y; Excise Tax Y; Property Tax Y; Other Taxes Y; Customs Y; Social Security N.
    - Italy: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax Y; Excise Tax Y; Property Tax Y; Other Taxes Y; Customs N1/; Social Security N.
      - Footnote 1/: "In the case of Italy, there are separate RAs for tax administration and for customs administration. For convenience and comparability, we have indicated customs is not part of the tax administration RA."
    - Kenya: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax Y; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.
    - Lesotho: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes N; Customs Y; Social Security N.
    - Mauritius: Income Tax Y; VAT Y; Gaming Tax Y; Stamp Tax Y; Excise Tax Y; Property Tax Y; Other Taxes Y; Customs Y; Social Security N.
    - Mexico: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.
    - Peru: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security Y.
    - Rwanda: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.
    - Singapore: Income Tax Y; VAT Y; Gaming Tax Y; Stamp Tax Y; Excise Tax N; Property Tax Y; Other Taxes Y; Customs Y; Social Security N.
    - South Africa: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax Y; Other Taxes N; Customs Y; Social Security Y.
    - Spain: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.
    - Tanzania: Income Tax Y; VAT Y; Gaming Tax Y; Stamp Tax Y; Excise Tax Y; Property Tax Y; Other Taxes N; Customs Y; Social Security Y.
    - Uganda: Income Tax Y; VAT Y; Gaming Tax Y; Stamp Tax Y; Excise Tax Y; Property Tax Y; Other Taxes N; Customs Y; Social Security N.
    - Venezuela: Income Tax Y; VAT Y; Gaming Tax Y; Stamp Tax Y; Excise Tax Y; Property Tax Y; Other Taxes N; Customs Y; Social Security Y.
    - Zambia: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax N; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.
    - Zimbabwe: Income Tax Y; VAT Y; Gaming Tax N; Stamp Tax Y; Excise Tax Y; Property Tax N; Other Taxes Y; Customs Y; Social Security N.

- Observations implicit in the matrix (preserved as presented)
  - VAT and Income Tax are administered by virtually all listed RAs (Y across all countries in the table).
  - Customs is frequently administered by the RA (Y for many countries), though exceptions and country-specific separations exist (Italy customs flagged N1/).
  - Social Security administration by RAs varies: some RAs administer social security contributions (Argentina Y; Canada Y; Peru Y; South Africa Y; Tanzania Y; Venezuela Y), while many do not.

*Source: Annex tables on RA features, governance framework, and scope of activities (as provided in the source content).*

### ANNEX                                                                        IX

### ANNEX IX–XII (Selections)

### Reasons for Initially Establishing the RA (Annex IX)
- Table headings: A B C D E F G H.
- Countries and ranked reasons (partial layout as presented):
  - Argentina: 4 1 2 3 5
  - Botswana: 2 3 6 4 5 7 1
  - Colombia: 1 — Yes (H recorded as Yes)
  - Ethiopia: 1 3 6 2 5 4 7
  - Guatemala: 4 2 1 5 3 6 — Yes (H recorded as Yes)
  - Italy: 1 2 5 4 3 — Yes (H recorded as Yes)
  - Kenya: 1 2 3 4 5
  - Lesotho: 7 6 1 3 4 5 2
  - Mauritius: 1 3 4 5 2
  - Rwanda: 3 2 7 1 4 6 5 — Yes (H recorded as Yes)
  - Singapore: 1 2 3
  - South Africa: 1 2 3 4 5 6 — Yes (H recorded as Yes)
  - Spain: 1 2 4 3 — Yes (H recorded as Yes)
  - Tanzania: 1 6 2 4 3 5 7
  - Uganda: 1 2 6 3 5 4
  - Venezuela: 1 2 3 4 5 6 7
  - Zambia: 1 6 7 2 4 5 3
- Totals and summary statistics:
  - Total per reason: A 27, B 44, C 50, D 41, E 59, F 56, G 59
  - Frequency per reason: A 15, B 15, C 11, D 15, E 14, F 12, G 13
  - Average ranking: A 1.8, B 2.9, C 4.55, D 2.73, E 4.21, F 4.67, G 4.54
- Footnote on questionnaire reasons (verbatim labels):
  - A- low effectiveness of tax administration and poor levels of compliance;
  - B- impediments caused by poor civil service human resources policies;
  - C- perceptions of political/ministerial interference;
  - D- need for a catalyst to launch broader revenue administration reform;
  - E- poor communication and data exchange among the existing revenue departments;
  - F- high levels of corruption;
  - G- desire to create islands of excellence;
  - H- other.
- Examples of "OTHER" responses (verbatim list items provided):
  - (1) improved relations with the provinces;
  - (2) improved accountability for results and management;
  - (3) improved credibility;
  - (4) control and flexibility over human resources and assets;
  - (5) tax evasion;
  - (6) customs inefficiency;
  - (7) merge tax administration;
  - (8) better integral control of tax and customs through action plans involving tax and customs obligations;
  - (9) part of program to strengthen national economic institutions.
- Methodology note (verbatim): To arrive at a balanced weighting of the answers (i.e., to factor in the influence of the frequency), the ranks awarded by each country for each reason were totaled and divided by the frequency to arrive at an overall rating (the highest rank for an individual reason was 1).

### Self-Assessment of RA Effectiveness (Annex X)
- Purpose (verbatim): identify and quantify if possible the specific impact of the RA governance model in achieving revenue administration reforms.
- Scoring method (verbatim): For each of the “revenue administration reform areas”(A through P) respondents were asked to quantify the degree of impact of the revenue authority model: 10 being the highest impact, 0 being the lowest and n/a indicating that the reform indicator was not applicable in the particular circumstances of the respondent.
- Reform area labels (verbatim):
  - A- increase tax revenues;
  - B- introduce self-assessment;
  - C- integrate tax administration;
  - D- introduce taxpayer segmentation;
  - E- improve taxpayer and trader compliance management;
  - F- improve service to the public;
  - G- introduce risk management;
  - H- improve automation;
  - I- simplify laws, regulations and procedures;
  - J- improve valuation, classification and origin;
  - K- improve HR regime;
  - L- improve remuneration;
  - M- improve budget provision;
  - N- improve anti-corruption measures;
  - O- provide catalyst for reform;
  - P- improve public confidence.
- Country scores (selected entries as presented):
  - Argentina: A 7, B 8, C 9, D 0, E 6, F 5, G 10, H 5, I 5, J 5, K 8, L 7, M 8, N 8, O 7, P 7
  - Botswana: A 5, B 2, C 8, D 4, E 7, F 4, G 4, H 4, I 6, J 2, K 5, L 5, M 5, N n/a, O 8, P 4
  - Colombia: A 8, B n/a, C 6, D n/a, E 6, F 6, G n/a, H 8, I n/a, J n/a, K 8, L 3, M 0, N 7, O n/a, P 6
  - Ethiopia: A 8, B 5, C 5, D 5, E 6, F 7, G 3, H 8, I 5, J n/a, K 2, L 3, M 3, N 2, O 5, P 3
  - Guatemala: A 6, B 6, C 8, D 9, E 7, F 5, G 7, H 8, I 5, J 7, K 7, L 9, M 10, N 8, O 8, P 8
  - Lesotho: A 10, B 10, C 10, D 10, E 6, F 4, G 10, H 10, I 10, J 10, K 10, L 10, M 10, N 10, O 10, P 6
  - Rwanda: A 10, B 9, C 10, D 8, E 9, F 10, G 9, H 10, I 10, J 8, K 9, L 9, M 8, N 10, O 10, P 10
  - Singapore: A 9, B n/a, C 9, D 7, E 9, F 9, G 7, H 9, I 9, J n/a, K 9, L 9, M 7, N 1, O 8, P 9
  - South Africa: A 10, B 0, C 8, D 2, E 10, F 10, G 10, H 8, I 6, J 7, K 6, L 7, M 10, N 7, O 9, P 10
  - Tanzania: A 9, B n/a, C n/a, D 9, E 8, F 9, G 8, H 7, I 8, J 7, K 7, L 7, M 8, N 8, O 8, P 8
  - Uganda: A 10, B 3, C 8, D 6, E 5, F 8, G 5, H 7, I 6, J 6, K 7, L 5, M 6, N 6, O 8, P 4
  - Venezuela: A 10, B 8, C 9, D 9, E 10, F 10, G 5, H 9, I 10, J 7, K 8, L 8, M 7, N 8, O 8, P 10
  - Zambia: A 10, B 9, C 8, D 5, E 10, F 7, G 6, H 10, I 10, J 7, K 10, L 10, M 7, N 7, O 10, P 7
  - Zimbabwe: A 8, B 2, C 9, D 1, E 5, F 7, G 5, H 6, I 5, J 5, K 8, L 10, M 9, N 9, O 7, P 6
- Aggregated totals and averages (as presented):
  - Total scores per area: A 154, B 77, C 141, D 95, E 141, F 143, G 115, H 148, I 120, J 87, K 142, L 143, M 131, N 123, O 136, P 139
  - Frequency per area: A 19, B 13, C 17, D 16, E 19, F 19, G 17, H 19, I 17, J 14, K 19, L 19, M 19, N 18, O 17, P 19
  - Average scores per area (verbatim values; table truncation preserved where present):
    - A 8.11, B 5.92, C 8.29, D 5.94, E 7.42, F 7.
    - (table shows continuation: F 7.53, G 6.76, H 7.79, I 7.06, J 6.21, K 7.47, L 7.53, M 6.89, N 6.83, O 8.00, P 7.32)

### Practical Results of HR Autonomy (Annex XI)
- Legend (verbatim): Y= yes; N= no; DK = did not respond or do not know; m = merit; c = competency; s = seniority; f = function; t = title.
- Note (verbatim): Brief indicators have been used in the vertical column—see Annex III for details.
- (Table contents not reproduced in full in source excerpt; legend and note provided as above.)

### Quantifiable Information, 1994–2004 (Annex XII)
- Column headings (verbatim): 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 CIT PIT VAT Budget Staff Declarations Percent Filed Electronically Customs Tax Revenues to GDP Current Registration Resources
- Selected country-year entries and statistics from the table (verbatim values as presented):
  - Argentina:
    - PIT/CIT/VAT: -- 18.7 18.0 19.0 19.3 19.6 20.0 19.6 17.8 21.1 24.2
    - Staff: 226,000
    - Declarations: 884,000
    - Percent Filed Electronically: --
    - Current Registration: 21,883
  - Canada:
    - CIT/PIT/VAT (selected years): -- -- -- -- -- 35.9 35.6 35.1 33.5 33.9 31.8
    - Staff/Declarations/Percent Filed Electronically: 1,500,000  23,300,000   2,200,000
    - Budget: CAN$3.1 billion
    - Staff (numeric elsewhere): 39,100
    - Percent Filed Electronically: N/A
  - Colombia:
    - Selected tax ratio years: -- -- -- -- 10.7 11.0 11.0 13.2 13.5 14.2 --
    - Staff: 9,330
    - Declarations: 1,450,000
    - Percent Filed Electronically: 19
  - Italy:
    - CIT/PIT/VAT values: -- 27.5 27.5 29.2 30.1 30.2 29.7 29.6 29.1 -- --
    - Staff/Declarations/Percent Filed Electronically: 805,000  39,800,000   5,100,000
    - Budget: EUR 2.7 billion
    - Staff number listed: 34,500
    - Percent Filed Electronically: 14,980,000 55.3
  - Kenya:
    - Tax ratio series: -- -- 24.4 23.1 23.5 23.0 21.8 21.8 19.9 19.6 21.9
    - Staff: 312,000
    - Declarations: 9,000
    - Percent Filed Electronically: 9,000
    - Budget: K Sh 3.8 billion
    - Current Registration: 3,275
    - Percent Filed Electronically: 0
  - Mexico:
    - Tax ratio series: -- 9.3 8.9 9.8 10.5 11.3 10.6 11.3 11.6 11.4 10.1
    - Staff/Declarations: 577,000  10,000,000
    - Budget: MEX$10 billion
    - Staff numeric: 32,690
    - Declarations: 7,300,000
    - Percent Filed Electronically: 100
  - Peru:
    - Tax ratio years: -- -- -- -- -- 12.7 12.3 12.5 12.2 13.1 13.1
    - Staff numeric: --
    - Staff (other): 7,150
    - Declarations: 937,000
    - Percent Filed Electronically: 81.3
  - Singapore:
    - Tax ratio series: -- 11.0 14.0 14.0 11.0 12.0 12.0 12.0 10.0 10.0 N/A
    - Staff: 98,000
    - Declarations: 1,800,000
    - Budget: S$167 million
    - Current Registration: 1,600
  - South Africa:
    - Tax ratio series: -- 22.9 22.2 23.2 23.6 24.4 24.1 23.2 24.1 23.6 23.7
    - Staff: 1,280,000
    - Declarations: 3,990,000
    - Percent Filed Electronically: 536,000
    - Budget/Resources: R 3,386
    - Current Registration: 13,138
    - Declarations (alt): 1,870,000
    - Percent Filed Electronically: 89
  - Spain:
    - Tax ratio series: -- 16.7 16.4 17.3 16.6 16.8 17.7 17.5 17.9 17.5 17.6
    - Staff/Declarations/Percent Filed Electronically: 1,000,000  15,000,000   3,000,000
    - Budget: EUR 1,150 million
    - Current Registration: 25,565
    - Declarations: 6,700,000
    - Percent Filed Electronically: 96.5
  - Tanzania:
    - Tax ratio series: -- -- -- 12.0 11.0 10.5 10.3 10.9 11.2 12.0 N/A
    - Staff: 243,000
    - Declarations: --
    - Percent Filed Electronically: 84,000
    - Budget: T Sh 44.3 million
    - Current Registration: 3,448
  - Uganda:
    - Tax ratio series: -- -- -- 12.0 11.6 12.7 11.9 11.7 12.9 13.0 13.6
    - Staff: --
    - Declarations: 9,500
    - Budget: U Sh 55.2 billion
  - Additional entries for other countries appear in the table as presented; where values are shown as "--" or "N/A" those are preserved verbatim.

*Source: Excerpted tables and notes from ANNEX IX–XII of the provided IMF working paper annex file.*

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