Integrating the Collection of Social Insurance Contributions and Personal Income Taxes

Technical Notes and Manuals, August 10, 2021

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What are the main ways in which different countries assess and collect personal income tax (PIT) and social insurance contributions (SIC) liabilities (Section I)?
What is the case for transferring responsibility for a country’s SIC collection from its social insurance agency(ies) to its tax authority (Section II)?
What changes does such integration of collection functions involve (Section III)?
Are there any lessons from international experience to guide such reforms (Section IV)?
How to build on these lessons when planning a transfer of collection functions (Section V)?
Are there any beneficial alternatives to full integration of functions (Section VI)?

Purpose: To analyze models for assessing and collecting PIT and SIC, examine the rationale for transferring SIC collection to tax authorities, outline the changes required by integration, synthesize lessons from international experience, provide guidance for planning transfers of collection functions, and discuss alternatives to full integration.
Document type: Technical Guidance Note.
Disclaimer: The views expressed in this Note are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Subject: Compliance costs, Expenditure, Income, National accounts, Personal income tax, Revenue administration, Social assistance spending, Tax allowances, Taxes
Keywords: collection function, collection model, collection of social insurance contributions, Compliance costs, Income, Personal income tax, publication order, SIA audit visit, Social assistance spending, Tax allowances, tax authority

International Monetary Fund. Technical Notes and Manuals 2021/008.