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

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Key observationsThe review indicates that the scope of responsibility of revenue bodies is beingexpanded to include various non-tax revenue items. Revenue bodies indicated thatthis approach is being driven mainly by the need to improve revenue performance ofthese tax-heads, and indeed collection of non-tax revenue has improved significantlyin recent years. 15The review notes that, unlike in the OECD where 11 out of 28 countries haveintegrated the collection of social security contributions with tax operations, thisfunction is predominantly performed by a separate social security agency—only SouthAfrica 16 and Botswana have integrated collection of public sector social securitycontributions with tax administration, while Rwanda is also currently pursuing thisreform. 17 The advantages and disadvantages of the different approaches tocollecting/administering social security contributions are not the subject of thisreview. However, it is worth noting that in the last decade or so, many countries havechosen to integrate the collection of social security contribution with tax operations. 18Also, international trade remains a significant contributor to government revenue inmost countries. 19 Therefore, customs administration remains a key element of therevenue body structure—all surveyed unified semi-autonomous revenue bodiesadminister both tax and customs. Tax and customs are however maintained asdistinct departments under this model supported by a pool of common servicesdepartments, and in some cases shared revenue administration functions such asintelligence/investigations and taxpayer services. 20 Ethiopia is the only country that isworking towards fully integrating tax and customs administration. 2115 What has not been assessed is the impact these non-core activities have had on staff productivity and thereforeoverall revenue performance particularly that experienced revenue officials are engaged in additional and lesstechnical responsibilities.16 SARS also collects unemployment insurance fund contributions and road accident fund levies.17 Kenya Revenue Authority (KRA) collects widows and children pension fund from public servants, which in a limitedsense is a social contribution (social contributions are collected by a separate agency in Kenya).18 The key arguments made for this reform include: commonality of core processes; efficient use of resources;development of core competencies of tax and social organizations; lowering government administration costs; andlowering taxpayer and contributor compliance cost. For more details, see IMF Working Paper on Integrating Tax andSocial Contribution Collections within a Unified Revenue Administration: The Experience of Central and EasternEuropean Countries (December 2004).19 For purposes of this section, international trade taxes include customs duties, VAT on imports, and excise taxes onimports (including fuel and petroleum products).20 IMF experience indicates that this is the preferred model due to the distinct nature of tax and customs operationsand the need to maintain appropriate focus across the entire tax and customs administration.21 South Africa was until recently but has disbanded this model and set up a specialized unit to oversee customsoperations.13
C. Relative autonomy of revenue bodiesIntroductionSeveral factors explain the degree of autonomy of powers delegated to revenuebodies. These factors include: (1) the institutional arrangements of revenue bodies—whether they are semi-autonomous or within the MOF; whether or not they have anexecutive or advisory board; the system of political governance existing in the countryof operation; and the nature and capacity of public sector management (OECD (2009)).Also, the degree of autonomy as prescribed in the law may, in some countries, differfrom the actual use/practice of such powers. Available literature indicates thatintrusive political influence (formal or informal) can over-ride prescribed legal andadministrative arrangements. Delegated powers can also be used excessively and toocoercively to meet set revenue collection targets. Coercive taxation applies toassessments and collection conducted in ways that are likely to be perceived bytaxpayers as arbitrary, extractive, unfair or brutal. Where such abuses are prevalent,they contribute in significant ways to the weakening of the public governance systemin many African countries (Moore, 2007, p. 25). Assessing how political influence hasdistorted decision-making in revenue bodies is however beyond the scope of thisstudy, which only looks at institutional arrangements. Revenue bodies’ powers areexamined according to responsibility criteria defined in Box 2 on the following page.14
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 and 12: • All unified semi-autonomous rev
Page 13: B. Scope of revenue bodies’ respo
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
Page 63 and 64: 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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