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

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Box 1: Conclusions reached about unified semi-autonomous revenue bodies 10• Establishing a unified semi-autonomous revenue body should not be viewed asa panacea—creating a unified semi-autonomous revenue body may beexpensive, may take a long time, and may not actually improve revenueadministration effectiveness;• Before considering any particular governance model, revenue administrationsshould clearly identify and articulate problems and deficiencies, and considerstrategies for reform and modernization based in international best practice.Only then should a full assessment be made of the extent to which the unifiedsemi-autonomous governance model might satisfy the problems and reformstrategies identified.• Whatever the governance model, it must be recognized that politicalcommitment is of the utmost importance in establishing and sustaining aprofessional and effective revenue administration;• The unified semi-autonomous model alone does not lead to improvedeffectiveness and taxpayer compliance—its establishment must be coupledwith a serious commitment and plan for reform.This notwithstanding, there seems to be growing consensus that the setting up ofsemi-autonomous revenue bodies has to some extent provided a platform forinitiating deeper tax administration reforms that have led to marked improvements intax operations and service delivery in most of these countries (Kidd and Crandall(2006) and Fjeldstad and Moore (2009)). Countries that plan to set up semiautonomousrevenue bodies in future will benefit from the rich experiences andlessons of those that have gone through the process. A wide range of literature is alsonow available on the subject, including the IMF technical manual – “RevenueAdministration: A Toolkit for Implementing A Revenue Authority” (April 2010). 1110 Source: Crandall and Kidd/IMF (2010). An August 2004 USAID publication also concludes that unified semiautonomousrevenue bodies have neither lived up to expectations nor can they be categorized as having failed. Taxadministration efficiencies have risen and receded, and unified semi-autonomous revenue bodies have not proven tobe quick-fix panaceas. They do provide a platform from which tax administration efficiencies can be generated, buttheir mere establishment offers no guarantee of success.11 The toolkit notes, among others, that: (1) setting up a semi-autonomous revenue body is only a platform to supporta comprehensive revenue administration reform program; and (2) irrespective of the organizational structure adopted,the following conditions are necessary for successful and sustainable revenue administration reforms: strong politicalsupport; senior management commitment; a sound policy and legislative framework; pro-active communication andcomprehensive change management strategies; and a strong project management framework.11
B. Scope of revenue bodies’ responsibilitiesIntroductionThe functions and responsibilities of revenue bodies are specified in their respectivelaws and regulations. Revenue bodies are typically responsible for the administrationof tax and customs duties. In SSA countries, their mandate is increasingly beingexpanded to include a number of non-tax revenues. The survey sought to review thescope of responsibility of revenue bodies.Survey results (Tables 2 and 16 and Annex 1)All the 13 unified semi-autonomous revenue bodies administer both tax and customs.The customs department is a major contributor of revenue in a number of countries.Revenue bodies also administer a number of non-tax revenues, the most commonbeing motor vehicle fees.• Property taxes are administered by 6 revenue bodies (Burundi, Mauritius,Senegal, South Africa, Tanzania,12 and Zambia). Of these, 2 revenue bodies(Burundi and Senegal) indicated they are responsible for property valuation aswell while the other 4 (Mauritius, South Africa, Tanzania, and Zambia) haveestablished information sharing arrangements with government agenciesresponsible for this function.• Collection of motor vehicle registration fees/levies is a function of revenuebodies in seven countries (Benin, Burundi, Kenya, Rwanda, Tanzania, Ugandaand Zambia). 13• South Africa and Botswana have, to some extent, integrated the collection ofsocial contributions with tax administration, while Rwanda is in the earlystages of doing so.• Wealth tax is collected by revenue bodies in only 2 countries (Botswana andSierra Leone), while inheritance tax is administered by revenue bodies in 7countries (Benin, Botswana, Burundi, Senegal, Sierra-Leone, South Africa andZambia.• Thirteen revenue bodies are also responsible for collecting of a number ofother non-tax revenues.14 Only Benin and Burundi indicate they have no suchresponsibilities.12 Tanzania Revenue Authority (TRA) collects property tax in Dar es Salaam region only.13 Zambia Revenue Authority (ZRA) has entered into an agency arrangement with the country’s Road Transport andSafety Agency (RTSA) mandating the ZRA to collect road fees/levies on imported motor vehicles (on behalf of RTSA)while the latter collects carbon tax on in-land motor vehicles and remits the proceeds to ZRA.14 Uganda Revenue Authority (URA), for example, is responsible for the administration of motor vehicle fees andlicenses, drivers’ permits, stamp duty and embossing fees, and government fees (including passport fees, land transferfees, migration fees, company regulation fees, transport regulation fees, court fees, mining royalties, etc.).12
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 and 10: Institutional arrangements for reve
Page 11: • All unified semi-autonomous rev
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
Page 61 and 62: 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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