Integrating a Unified Revenue Administration for Tax and Social Contribution Collections: Experiences of Central and Eastern European Countries

IMF Working Papers, December 1, 2004

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During the 1990s, a failure to collect social contributions in Central and Eastern European countries deprived pension schemes of resources needed to meet their obligations.
The paper examines the trend to increase coordination of tax and contribution collections and sets out the rationale for establishing a unified agency as the best long-term strategy.
The paper discusses policy and administrative issues in implementing a unified revenue administration.

Coordinating tax and social contribution collections can address shortages in pension scheme financing caused by collection failures.
Establishing a unified agency is presented as the best long-term strategy for integrating tax and social contribution collections.
Policy and administrative dimensions are central to successful implementation of a unified revenue administration.

The paper discusses policy issues involved in moving to a unified revenue administration.
Administrative issues related to integrating collection functions, information technology, and core tax administration processes are examined.
Topics referenced in relation to implementation include: collection capacity, collection function, collection process, information return, information technology, large taxpayer unit, and tax withholding.

Appendix presents three case studies for Albania, Bulgaria, and Romania, which are establishing a unified revenue administration.
An additional case study is presented for Sweden, which successfully integrated tax and social contributions collections in the 1980s.

Subject: Expenditure, Pension spending, Revenue administration, Social assistance spending, Social security contributions, Tax administration core functions, Tax allowances, Taxes
Keywords include: assessment purpose, Central and Eastern Europe, collection capacity, collection function, collection process, contribution collection, core tax administration process, Eastern Europe, government administration cost, information return, information technology, Integration, large taxpayer unit, Social assistance spending, social contribution collection, Social security contributions, tax administration, Tax administration core functions, tax administration process, tax agency, Tax allowances, tax collection, tax withholding, tax/revenue administration, Western Europe, WP