The TADAT Podcast

الحلقة ١١: ماذا يوجد في صندوق الأدوات الخاص بك؟

ملخص

سوف نناقش في هذه الحلقة تقرير "إصلاحات الإدارة الضريبية وأنظمتها ، ومسح خاص بأطر العمل والأدوات التحليلية الحالية". يتضمن تقريم المسح مقارنة بين النطاق والتغطية والخصائص ذات الصلة المهمة لفهم الاختلافات وأوجه التشابه والمزايا النسبية لأدوات مختارة. وسوف يتقاسم ضيفنا فرود ليندسيث معنا النقاط الرئيسية لعملية المسح.

 

Выпуск 11: Какие инструменты есть в Вашем арсенале?

Резюме

 

В этом выпуске мы обсуждаем отчет «Реформы налогового администрирования и налоговых систем», анализ текущих аналитических инструментов и структур. Данный отчет об анализе включает в себя сравнение сферы действия, области применения, а также соответствующих характеристик, которые важны для понимания различий, сходства и преимуществ выбранных инструментов.

 

Наш гость, Фроде Линдсет, делится с нами ключевыми выводами по результатам данного анализа.

Espisódio 11: O que tem na sua caixa de ferramentas?

Resumo:

 

Neste episódio discutimos o relatório Reformas de Administrações e Sistemas fiscais, um mapeamento de ferramentas e estruturas analíticas. O relatório inclui uma comparação de escopo, cobertura e características importantes necessárias para entender as diferenças e similitudes das ferramentas escolhidas. Nosso convidado, Fröde Lindseth, compartilhará o que aprenderam deste exercício de mapeamento.

第11集：您的工具箱中有什么？

概要

 

在本集中，我们来讨论 “管理改革和税收系统”的报告。该报告描繪内容和覆盖范围以及相关特征的比较，这对于理解所选工具的差异，相似性和优势很重要。 我们的客人Fröde Lindseth与我们分享了描繪工作的主要收获。

Episode 11.1 : What's in your Toolbox?

Annette Schmitz: [1] Welcome, listeners, the first episode of our podcast series, What's in Your Toolbox? My name is Annette Schmitz from the TADAT Secretariat. To kick off the series, let's travel virtually to Norway. In 2017, the government of Norway relaunched its TFD program, a Tax For Development program. They relaunched this program as a response to obligations under the ATI the Addis Tax Initiative.

 

[2] The TFD program provides financial support to different multilateral organizations involved in tax reforms. Several organizations have developed tools to support tax administrations and tax system reforms. As the number of available tools continues to grow, so does the complexity in selecting the right tool or combination of tools.

 

[3] It's important to understand the characteristics and comparative advantages of the different tools and frameworks that are currently available or in development. With this background, NORAD, the Norwegian Agency for Development Cooperation and the NTA, the Norwegian Tax Administration, map the selection of analytical tools and frameworks developed to support tax administrations and tax system reforms.

 

[4] In the report, Reforms of Tax Administration and Systems, a mapping of current analytical tools and frameworks, the following tools were selected for mapping. Among the Revenue Administration Analytical Assessment Tools, the report includes the OECD’s FTA, the Organization for Economic Cooperation and Development’s Forum on Tax Administration Maturity Models, the IMF, the International Monetary Fund's RA-GAP, short for Revenue Administration Gap analysis, TADAT, the Tax Administration Diagnostic Assessment Tool.

 

[5] Also included are the European Union's Tax Administration Fiscal Blueprints, FB for short, and the World Bank's Tax Diamond, the development of implementation and monitoring directives for tax reform tool.

 

[6] The data collection and reporting tools included in Norway's mapping exercises are ATAF’s ATO, the African Tax Administration Forum's African Tax Outlook, the ATI’s indicators, the IMF's International Survey on Revenue Administration were often referred to as ISORA, and USAID CTD, the United States Agency for International Development Collecting Taxes database.

 

[7] The mapping includes a comparison of scope, coverage, and the relevant characteristics that are important to understand the differences, similarities and comparative advantages of the tools. A few country examples are included in the report. The country examples described the impact on the recipient tax administrations and tax administrations experiences with the assessment process.

 

[8] They also highlight how tax administrations have different approaches when selecting tools and utilizing results. Joining me today is Frode Lindseth, and he is senior advisor in the capacity building unit of the NTA, and the man behind this mapping exercise. Welcome, Frode.

 

Frode Lindseth: [9] Thank you, Annette, and thanks to you and the TADAT Secretary for giving me this opportunity to talk about this exercise further.

 

Annette Schmitz: [10] Frode, can you start by explaining what we mean when we say tools to support tax administrations and reforms?

 

Frode Lindseth: [11] Well, I haven't seen one clear definition, but I guess you can say that they're all designed around guidance and support for tax administrations for different purposes and to support different stages of the reforms. And I think it's fair to say that they're all designed around good international practice to guide improvements.

 

[12] Then they kind of separate when it comes to coverage, assessment and modality and involvement in the unit from the tax administration. And I just want to underline that this mapping exercise is about a selection of tools for tax administrations only PMF tools, tax policy tools, etc. are not included in this method.

 

Annette Schmitz: [13] So walk us through the process. Why did the NTA and NORAD decide to take on this initiative and conduct a mapping exercise of select tax administration analytical tools and frameworks?

 

Frode Lindseth: [14] Yes. OK, so just a short recap on the background. As you said, Norway relaunched its tax for development program back in 2017. This program includes financial support to different organizations, but it also includes an agreement with the Norwegian tax administration as a key component in the bilateral workstream in the program. This is basically where the NTA comes in.

 

[15] So when we decided to do this, the capacity building team in NTA, we realized that during our scoping and design of missions that there were quite a few tools out there, which was great because we got the pressure to reuse diagnostic results as input to our capacity building programs.

 

[16] But at the same time, we saw that the number of tools kept growing and so the complexity for all involved to understand and select the right tool or in some cases maybe combinations of tools. Also, at that time, we saw that it was not easy to find out if an assessment had been done and it was not always easy to get access to results.

 

[17] Further, we couldn't really find one easy to access source of information on all the tools, comparative advantages, and from NORAD's side as a donor, it was important to get a deeper understanding about the different tools and their differences.

 

Annette Schmitz: [18] So that was the why the mapping exercise was done. Can you tell us about how it was done? What was the selection criteria for the tools that were mapped out in this report?

 

Frode Lindseth: [19] Yes, in 2019, the PCT

 

Annette Schmitz:  and by PCT we mean the Platform for Collaboration on Tax

 

 

Frode Lindseth: The PCT published a progress report with a complete list of existing tools mapped by what stage they best supported in a reform. And this overview confirmed that there were quite a few tools in place. And we made a selection based on our thoughts about use and coverage.

 

[20] So we ended up with the nine tools that you listed in the beginning, and we classify them into groups basically following the same classification as in the PCT report. So, this was our starting point and we designed a survey where we believe that by systemizing the responses, we would get a more systematic and detailed information on different tools, which we thought would facilitate more informed decisions on what tool to select or combination.

 

[21] And we also thought that this mapping would contribute to reuse of results with the purpose to minimize the burden on all involved. We also hope that this mapping could add some input to future development of new tools or maybe modules in existing. So the main source of information for this mapping exercise are the written responses to this survey we received from the different tool owners.

 

Annette Schmitz: [22] And what did you discover through this exercise?

 

Frode Lindseth: [23] When we started this, we had this idea or this picture about a table listing all the tools and their characteristics organized in rows and columns, making it easy to identify differences and potential overlap. But we soon realized that there were so many dimensions in play that it was not possible to simplify and squeeze it all together in a simple table.

 

[24] And I guess that leads us to one of the main findings. They're all different. There is no tool that ticks all the boxes. And there is there are no perfect overlap between tools or modules. They are all different and have their special features when it comes to modules in play and coverage. When it comes to what stage in a tax reform process, the best support. And there are differences in assessment and modality.

 

[25] Some of the tools are designed for assessment by trained staff, others not. And there are huge differences in the main steps in the assessment process. And last but not least, there are differences in the involvement required from all involved, including tax administrations. I would like to point to the report for more details on what tools do and what they don't and how.

 

Annette Schmitz: [26] Frode, you've mapped out these select tools. What's next?

 

Frode Lindseth: [27] First, I just want to clarify that I am not a big fan of the idea of merging as many tools as possible and ending up with maybe only one or very few. I think there is, and it should always be a free market for good ideas on how to assess support and improve performance in tax administrations.

 

[28] And I think the main message after this mapping is that they are all different and should be selected and used based on specific needs and capacity. So what's next? Starting with the donors. Donors need to coordinate among themselves and make sure that the need for new tools are well-documented.

 

[29] My point is basically that when new tools are developed, this should not only be supply driven by one organization but should be done in consultations with all relevant stakeholders. And I guess TADAT is one example, a good one. The story about TADAT started with a feasibility study back in 2011 with the purpose to determine the need for developing a new tool for assessing the performance of tax administrations.

 

[30] Moving on to the tool owners, I think they should continue to coordinate and look for opportunities to merge definitions and data collection processes where possible. And I think ISORA is a good example on how several organizations came together and managed to merge the data collection process.

 

[31] Tool owners should continue to look for opportunity to publish reports or at least results or information about ongoing DRM activities. One example I would like to mention is a database just made available from PCT webpage that brings together all DRM activities by PCT partners. Next, I think tool owners need to do a regular stock take and update on available tools.

 

[32] And finally, I think it would be good with some guidance on how different tools complement each other and how they can be used together in different stages of a tax reform.

 

Annette Schmitz: [33] You recommend there should be guidance with how tools complement each other. What do you mean?

 

Frode Lindseth: [34] I think that selecting the right combination of tools is not easy and I think guidance on how this could be done is needed. In the report, we added a few country examples to show how different countries have different approaches when it came to selecting tools or combination of tools, and how they use the results.

 

[35] Peru and Uganda are good examples. They both had several assessments done over the last years using different tools, and they both had good learning effects from all assessments. And they found ways that they could use results from the different assessments to improve performance.

 

Annette Schmitz: [36] And what about tax administrations, what should they do?

 

Frode Lindseth: [37] Administrations should familiarize themselves with tools and frameworks available and then choose, if they can, based on their specific needs and capacity. And I think we need to help them on a regular stock take on available tools would be one of the things that should be done.

 

[38] As a good example, I would like to point to Poland, where the revenue administration considered different tools to support a specific need they had at a specific time, and they selected based on what they found to be the best fit for that specific purpose.

 

Annette Schmitz: [39] So Frode, since you've worked on and published this report, the world is quite different due to the covid-19 pandemic, are there any implications for your report?

 

Frode Lindseth: [40] At the time we did this, covid-19 was not an issue, but if it had, I think it would be interesting to know how, or, and if these tools had adapted to this situation. I understand that TADAT assessments are done remotely at the moment.

 

Annette Schmitz: [41] Correct. TADAT went virtual March 13th, 2020. Since then, we've conducted many virtual trainings, and Colombia, Georgia, Dominica and South Africa have undergone virtual assessments.

 

Frode Lindseth: [42] You cannot see it in another way. These tools will be more important given this new situation, and I guess it all boils down to how flexible they are and how easily they can adapt to the new situation.

 

Annette Schmitz: [43] So Frode, to sum up, what are the main takeaways from this report?

 

Frode Lindseth: [44] Looking at the landscape of tools there are quite a few of them. I think a regular stock take, an update on tools available, together with some guidance on how different tools complement each other, is needed to help tax administration choose and help donors prioritize. Access to the information on what the tools do and don't do, is needed. No tool ticks all the boxes, although some are quite close.

 

Annette Schmitz: [45] Tell me which ones come close Frode?

 

Frode Lindseth: [46] Well, I guess I can't tell you because you need to read the book to find out who the owner is, and you need to read there being a report to find out what tool is best for you.

 

Annette Schmitz: [47] Thank you so much for. It was a pleasure speaking with you today.

 

Frode Lindseth: [48] Thank you. And thank you for the opportunity to talk about this, being the report.

 

Annette Schmitz: [49] For a more in-depth look at the mapping exercise, please visit the NORAD.NO website. Thank you for listening, ‘til next time.

Épisode 11: Qu'avez-vous dans votre boîte à outils ?

Résumé :

Dans cet épisode nous parlerons du rapport « Réformes des administrations et des systèmes fiscaux, une cartographie des outils et des structures actuellement disponibles. » La cartographie comprend une comparaison de la portée, de la couverture et des caractéristiques qui sont importantes pour comprendre les différences, les similitudes et les avantages des outils choisis. Notre invité, Fröde Lindseth, nous livre les principales conclusions de cet exercice de cartographie.

Episodio 11: Qué hay en tu caja de herramientas?

Resumen:

En este episodio discutimos el informe Reformas de Administraciones y Sistemas Tributarios, un sondeo de herramientas y estructuras analíticas. El informe incluye una comparación de alcance, cobertura y características importantes necesarias para entender las diferencias y semejanzas de las herramientas elegidas. Nuestro invitado, Fröde Lindseth, compartirá todo lo aprendido.

Выпуск 10.2: Сотрудничество и горизонтальность в налоговой администрации

Наши гости продолжают обсуждать свои впечатления от работы с TADAT. В этой второй части мы сосредоточимся на сотрудничестве, интеграции и управлении организационными рисками. Ключевым вопросом, исходя из опыта наших гостей, является то, работают ли налоговые администрации как сплоченное сообщество.

Episode 10.2: Collaboration and Horizontality in Tax Administration

Our guests continue discussing their TADAT experiences. In this second part, we focus on collaboration, integration, and organizational risk management. A key question is whether, in their own experience, tax administrations are operating as a cohesive community.

 

TRANSCRIPT

Annette Schmitz

Hello and welcome back. I am Annette Schmitz from the TADAT Secretariat. In our previous episode, TADAT and Tax Administration Linkages, Tracey-Ann, Gord, Khwaja, and Simon discussed the value of the TADAT methodology and how they have used it in their professional engagements. They also shared with us insights on the importance of TADAT training and how it can catalyze collaboration within a tax administration. Today’s episode picks up where they left off.

Here’s part two:

So we're talking about collaboration and horizontality. But how can the extent of interaction or collaboration between these domains be measured?

 

Simon Peter Kiyingi

Well, for me, the extent of interaction and collaboration, I would really look at the level of process and system integration, things like unified compliance improvement plans, capacity building programs that are looking at the entire picture. You're looking at different domains during the training programs and letting everyone know how their work affects the other particular domains.

 

Tracey-Ann Bonner

Yeah. So, what the TAJ facilitates and a lot of the tax administrations that I’ve had experience to be part of their assessment, they facilitate the interaction internally via their strategic division. Their strategic plans, their strategic services division, and the planning division where they will record quarterly reviews, giving the opportunity for different divisions to come together and share the limitations and the constraints that they're having, both internal and external.

 

Gordon Hawkes

I think measurement is a difficult concept here. It’s not easy and I think it really is predicated on what happens before you even want to look at measurement; and collaboration and interaction you have to ask, what for? Is it with respect to an outcome? And if it's with respect to an outcome, I think it's a matter of making each party recognize their role within the achievement of the outcomes.

So first you start off with who are the implicated parties and what are their particular roles in that outcome? And what do they do? Like what do each of the areas do in contributing to that outcome or that problem or to whatever it might be? You need to get them to see themselves in that outcome.

So maybe you need to help develop a logic model that really helps to allow them appreciate and understand their interaction, their role in the outcome that they're trying to achieve. And then when you get there, you start to have buy-in because people then start to recognize ‘I do have some responsibility for this, or I do have some accountability for this.

And flowing from that responsibility, maybe they develop this responsibility charter, and accountability charter, with agreed-upon measures so they determine what measures they need within the charter to demonstrate that they're equal in meeting that outcome or whatever that the problem is that they're trying to achieve.

And from that flows the need for interaction and collaboration. So, it's one of those things where measurement is absolutely essential, but maybe measurement is too far down the spectrum. Maybe what we really need to focus on are all the elements that build the collaboration, that build the interaction. And then, by the very fact that you've done these things, that measurement will then flow from that. 

 

Munawer Khwaja

That's a very good point. I think we don't have to measure everything. There are certain things that we first need to build a culture for in the sense that to build a culture of cooperation, making people in other departments understand what people in your department are doing and vice versa, because it's a highly specialized function.

So if you're doing transfer pricing, you may not be knowing how enforced collections are done. So, having a kind of regular interaction between the same groups is something that is very useful and doesn't have to be measured. Maybe over time, when things become more interactive then measurement would be a way forward.

 

Annette Schmitz

What are the implications of tax administration organizational complexity on risk management? 

 

Tracey-Ann Bonner

Based on what we've discussed so far, what I'm seeing is that for risk management, it now has to be championed and initiated at the strategic level, need to look at a more integrated approach with risk management, not only focusing on compliance risks but also focusing on operational risk, business continuity, human capital risk being two of the big-ticket items as well.

We also have to look at dedicating resources for risk management. Resources such as I.T. solutions, risk management specialists as well. We're looking at conducting more in-depth analytics, utilizing empirical data, and ensuring that you have collaboration in managing cross-cutting risks. Risk that affects compliance, that affects business continuity, risks that affect human capital as well.

You know, looking at all of those together and impact each other and managing them in a more corporate-integrated approach, because there are times when management in one area may be a positive. Managing or taking advantage of the risk in one area may negatively impact another area. So, for example, disaster recovery, where business continuity’s concerned.

If you decide that, your backup measure is going to be to shut down the tax administration for a day,  so, you know, now it is going to impact compliance, and payments may become delayed. Right? So, you know, that corporate approach to risk management becomes at the forefront as tax administration operations become more complex.

And we're also looking at, and TADAT has included that and it has always been a big-ticket item for me, is evaluating and establishing our risk appetite and tolerance levels, because you're not going to be able to take advantage of all the opportunities out there and you're not going to be able to manage all of the risks out there, but you'll be able to lower them to a minimum as possible.

And based on your resources, based on your capacity to take risk, then you can make a decision on which risk you go after, which risk you manage, and your risk management strategies become more focused. Right? And effective as well, because that's what risk management is really about, to be proactive and to be resourceful and economic in your operations as well. So, in summary, the three main lines of defense as far as organizational risk management is concerned would have to be strengthened.

The front line, which is the owners of the risk; the middle line, which is the specialized person that you will have to oversee a risk management both on the operational side and the compliance side and having collaboration there as well; and also the third line of defense, which is corporate governance, accountability, and transparency, where internal audit now becomes a key role in that area. 

 

Munawer Khwaja

Absolutely. I think you have hit the nail on the head for the last question because the last question was about, is there in practice a whole-of-agency approach.

And here transparency and accountability, are the key cornerstones for that because if you have transparency in your organization, if you have accountability, then you can carry the message much more effectively on what you are doing, what you have not been able to do and create the kind of discussion forum within the organization to help. 

One of the things that the TADAT secretariat did a couple of years ago was to have a survey of not the senior management of tax administrations, and Simon may remember that, but of functional staff within the tax administration, because very often we don't get to hear their voice and they know where the shoe pinches. The senior management may not.

So TADAT did a very good job at doing that. And when it was brought to the senior management, they were shocked. They didn't know that these were the things that were causing problems. So, a whole-of-administration approach would require to go deep down and discuss the problems fearlessly.

 

Simon Peter Kiyingi

With the risk management, a number of people think that everyone in the organization is kind of a risk manager. Yes and no. And like Tracey-Ann said, it's very important to have that specialized unit that is handling the strategy and the risk. And they definitely need tools that look at the organization-wide perspective of risk.

 

Gordon Hawkes

And I think it's awareness, too. I think awareness plays a key role in this. I definitely agree with the transparency and accountability, but there has to be broader awareness across the organization. I think, again, it's so fundamental because it's that lack of awareness that really seems to where you say the shoe pinches seems to be where things get pinched.

And if we can, broaden appreciation and awareness and maybe some of that requires us to be a little more understanding of what the other areas are about, then we can start to better identify the complexity. The areas where the pinch occurs and then collaboratively, collectively start to address those elements.

And that, to me, then starts to develop that whole-of-agency approach, because now you're developing a community, right? It's a culture and that community within the organization. And really, until the tax administration really develops itself as a community, I think there's always going to be some issues.

I think it really does help an organization recognize that we're looking at the health of the tax system, which is the community, the tax community. And so, we recognize, the TADAT recognizes that, you know, we can't look at elements, although it does in part looks at areas within isolation, we try to bring all those aspects together to really get that full appreciation.

And that's really what we want to do; to make the tax administrations themselves more cognizant of is that we're a community and we all are working towards the same outcome, the same goal. And we have to start to break down, going back to the silos.

I may be being repetitive here but break down those silos and really from that point of appreciation, start to make ourselves aware, and have more cognizance of our role within the organization.

 

Tracey-Ann Bonner

That's a good point Gord. I can relate to that point, because in back in 2012, when we just started developing a more integrated approach in tax administration for risk management, awareness was the first road we took. You know, that's where we were guided. So, we were doing awareness across all locations.

And what we found is that when they become more aware of what this risk management is all about, and how it was packaged as well, it's showing the importance to them how the staff at large benefit and how their role impacts the organizational view the way forward for the organization.

They started to see themselves more in the operations of the organization. So, these are location-wide sensitization sessions as we called them at the time—they really had an impact on awareness mainly because persons started, you know, thinking more risk-based, the language, the culture started to change at the time.

Starting to break down the silos. We went to sessions where persons were saying, it has nothing to do with me. And I said, ‘OK.’ Don't you think safety is a risk? You know, coming to work with the building in which you occupy? Don't you think safety is a risk? And this is the part you play in safety, the management of risk.

So it also has to do with how you package in the change and how you package what we need to do to break down the silos that exist. 

 

Gordon Hawkes

I just think this has been absolutely excellent. And, you know, I think these are very the topics that we've covered are just really quite at the fore at this point in time. And I love this discussion. It's been very good. 

 

Tracey-Ann Bonner

Yes. It has been a very informative and fruitful discussion. 

 

Simon Peter Kiyingi

It was a very fruitful discussion.

 

Annette Schmitz

Thank you for listening. Next time on the TADAT podcast:

 

Fröde Lindseth

There should always be a free market for good ideas on how to assess, support, and improve performance in tax administrations.

 

Annette Schmitz

You've just heard Fröde Lindseth, Senior Advisor in the Capacity Building Unit of the Norwegian Tax Administration. Frode and the TADAT podcast kick off a special series of podcast episodes where we ask; “What’s in your toolbox?” In this first episode of the series, Frode discusses his mapping exercise of select analytical tools and frameworks published in the July 2020 report. If you’ve wondered about the OECD’s Maturity Models, Tax DIAMOND, ISORA, RA-GAP, ATO or CDT – to name but a few – you won’t want to miss it.

In the meantime, visit our YouTube channel at www.youtube.com/c/TADATSecretariat. You will find training videos and select country testimonials on how they have implemented the TADAT methodology. And while you are there, go ahead and click that red Subscribe button. Till next time.

Episódio 10.2: Colaboração e Horizontalidade na Administração Tributária

Nossos convidados continuam discutindo suas experiências TADAT. Nesta segunda parte, nos concentramos na colaboração, integração e gestão de riscos organizacionais. Uma questão chave é se, em na experiência dos nossos convidados, as administrações tributárias estão operando como uma comunidade integrada.