Revenue Administration in Sub-Saharan Africa - International Tax ...

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A. Institutional framework of revenue bodiesIntroductionIn the last two decades, revenue administrations have undergone several institutionalreforms, driven by the need to improve operational efficiency and effectiveness in abid to increase revenue collection. 2 Policy debate in most SSA countries in the 1990srevolved around the need to improve revenue administration organizationalarrangements, including the merits and demerits of setting up semi-autonomousrevenue bodies. In this comparative information series, institutional arrangements ofrevenue bodies are analyzed on the basis of the following broad categories:• Single directorate in the MOF—revenue administration functions are theresponsibility of a single organizational unit (e.g. a directorate) located withinthe structure of the MOF (or its equivalent).• Multiple directorates in MOF—revenue administration functions are theresponsibility of multiple organizational units (e.g. directorates) located withinthe MOF.• Unified semi-autonomous body—revenue administration functions arecarried out by a unified semi-autonomous body, the head of which reports to agovernment minister.• Unified semi-autonomous body with a board—revenue administrationfunctions are carried out by a unified semi-autonomous body, the head ofwhich reports to a government minister as well as an oversight body/board ofmanagement comprised of external officials.Survey results (Table 1 and Annex 1)• In 13 countries, revenue administration is carried out by a unified semiautonomousrevenue body. 3• Eleven out of the 13 unified semi-autonomous bodies have a reportingstructure comprising an oversight board of directors (that also includes privatesector representatives). 4• Two revenue bodies (South African Revenue Service (SARS) and EthiopiaRevenue and Customs Authority (ERCA)) are more autonomous. Both revenuebodies’ governance structure provides for the establishment of advisorycommittees which do not have any oversight responsibilities. 5• In 2 countries, both from Francophone Africa, (Benin and Senegal) revenueadministration functions are the responsibility of two directorates (tax andcustoms) within their respective Ministries of Finance.2 These reforms have typically been implemented as part of wider economic reform programs designed to enhancegrowth and reduce poverty levels.3 Survey data on Burundi and Ghana has been updated to reflect more recent developments.4 The Minister of Finance is responsible for tax policy and general policy oversight while oversight and guidance withrespect to day-to-day operations of the revenue body is the responsibility of the board of directors.5 In South Africa, issue-oriented advisory committees are provided for, and so far two (human resource andinformation technology) have been established. Similarly the ERCA governance structure provides for an advisorycommittee but the Director General is a cabinet minister and reports directly to the Prime Minister.9
• All unified semi-autonomous revenue bodies are responsible foradministration of tax, customs, and other non-tax revenues.• Semi-autonomous revenue bodies are found only in Anglophone countries. 6Key observationsSurvey results indicate that, as is the case in OECD member countries, 7 the unifiedsemi-autonomous body is the commonly observed institutional arrangement in thesurveyed countries. 8 In addition, the majority of semi-autonomous revenue bodieswere observed to have a governance structure comprising of a board of directors. Inline with international practice, these boards are vested with oversight/advisoryresponsibilities and are generally excluded by law from engaging in taxadministration operational issues. 9 The pros and cons of setting up a semiautonomousrevenue bodies are not discussed in this series. However, it can beobserved that recent studies that have assessed the performance of semi-autonomousrevenue bodies report mixed and inconclusive findings (see Box 1 on the next page).6 Note that Rwanda was admitted to the Commonwealth Club of Nations in November 2009 while both Rwanda andBurundi are members of the East African Community Common Market.7 17 out of 30 OECD member countries have established a unified semi-autonomous revenue body—Source: OECDForum on Tax Administration (2009) “Tax Administration in OECD and Selected Non-OECD Countries: ComparativeInformation Series (2008)”, Center for Tax Administration.8 Unified semi-autonomous revenue body is defined to mean that the revenue administration functions are carried outby a unified body that has more operational autonomy that that afforded a normal department in a ministry. Keyareas of autonomy typically include human resources (recruitment, training, remuneration, hiring and firing),organization and planning, budget management, and performance standards. This model of revenue administration isgenerally seen by most countries as the answer to perennial problems such as corruption, inefficient and ineffectiverevenue administration. (See Crandall (2010) for further definition/details).9 The Zambia Revenue Authority (ZRA) noted that its Board’s mandate includes licensing of customs clearing agents.The Zambia Board is therefore de facto an executive board.10
Page 1 and 2: INTERNATIONALTAXDIALOGUE2010Revenue
Page 3 and 4: Table 12: Total cost of collection
Page 5 and 6: PCCAPAYEPITPSVRAGBRRARTSASACUSARSSS
Page 7 and 8: Executive summaryRevenue administra
Page 9: Institutional arrangements for reve
Page 13 and 14: B. Scope of revenue bodies’ respo
Page 15 and 16: C. Relative autonomy of revenue bod
Page 17 and 18: Survey results (Table 3)• All rev
Page 19 and 20: Key observationsRevenue administrat
Page 21 and 22: You are entitled to expect SARS:Box
Page 23 and 24: Box 4: An example of a codified set
Page 25 and 26: Table 2: Tax and non-tax revenues a
Page 27 and 28: Table 4: Decision making structures
Page 29 and 30: The organization of revenue bodiesC
Page 31 and 32: The ‘taxpayer segment’ model: A
Page 33 and 34: Key observationsSurvey results indi
Page 35 and 36: Box 6: The common characteristics o
Page 37 and 38: C. Office network and staffingIntro
Page 39 and 40: Table 7: Selected features of the o
Page 41 and 42: Table 9: Number of staff and distri
Page 43 and 44: A. Strategic planning and managemen
Page 45 and 46: Key observationsThe corporate plann
Page 47 and 48: Table 10: Selected management pract
Page 49 and 50: A. An overview of funding mechanism
Page 51 and 52: B. Revenue administration expenditu
Page 53 and 54: Table 13: Share of total wage bill
Page 55 and 56: Revenue performance 76Chapter VKey
Page 57 and 58: Table 15: Revenue collection data f
Page 59 and 60: Domestic tax return filing, assessm
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A. Taxpayer registration and design
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VAT• All the surveyed countries h
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C. Taxation of small and micro-busi
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D. Use of modern electronic applica
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Table 18: PIT filing, assessment an
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CountryHow is the final annual PIT
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Table 20: VAT filing, assessment an
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CountryTable 21: Taxation of small
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CountryBasis used todeterminetaxMal
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Use of electronic application in ta
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Legal and administrative powers of
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functions. These powers are also co
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Table 26: Information gathering pow
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CountryTable 28: Interest and admin
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CountryTable 29: Interest and admin
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CountrySouth AfricaTanzaniaUgandaZa
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CountryMalawiMauritiusRwandaSierraL
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AnnexesAnnex 1: Organization struct
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KRABoard of DirectorsCommissionerGe
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ZRABoard of DirectorsCommissionerGe
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ERCADirector GeneralAdvisory BoardE
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MauRABoard ofDirectorsInternal Audi
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Clarify SARS’operatingmodel,strea
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Enhancethe URAcorporateimageLevel o
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KRAMissionVisionValuesTo promote co
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ZRAMissionVisionValuesTo maximize a
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MauRAMissionVisionValuesTo continua
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GRAMissionVisionValuesTo supervise
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Source: ECRA• Cross cutting issue
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MalawiType of taxRevenue collected
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GhanaTax categoryRevenue collection
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