Case stories on capacity development and sustainable results

8 Capacity: ResultsThe management structure has becomemore decentralized, now comprising sixregional offices. This allows tax authoritiesto be close to their clients, which hasincreased awareness and compliance.The intensive use of training and professionaldevelopment in revenue administrationand IT has enhanced theDepartment’s capacity and has made itsperformance indicators particularly encouraging.The main indicator used for efficiencyof tax collection is the cost of collectionratio. The average cost of collectionof 100 Nu (Bhutanese currency) is 1.9, astriking statistic that compares favorablyin the international context. (The figurefor the USA is 0.39, while it stands at 0.73in Denmark.)The Institutional Capacity Programmehas strengthened the skills of staff of theDepartment of Revenue and Customsthrough in-country training programmes.Capacity development investmentsThe professionalization of revenue managementhas been a long, but successful, processinvolving training, decentralisation of taxmanagement, the introduction of an informationmanagement system and a public educationcampaign.The management structure has become moredecentralized, now comprising six regionaloffices. With tax authorities close to the clients,awareness and compliance have increased.The introduction of the new IT system hasimproved tax administration and improvedconsistency of data.The staff of the Department of Revenues andCustoms has received intensive training inrevenue administration and use of the informationmanagement system.Education programme for the general public hasincreased taxpayers compliance.A 2003 IMF report noted that the Departmentof Revenue and Customs’ hasrelatively few staff – around one per 250taxpayers – but that their capabilities areimpressive. The introduction of a new ITsystem for tax and customs has improvedtax administration and enhanced monitoring,evaluation, and reporting.Another significant achievement is theincreased compliance of the general public(taxpayers) as a result of an effectiveeducation programme which includedtraining, workshops, and awareness campaigns.Support to the capacitydevelopment processNational investmentsThe Department of Revenue and Customshas enjoyed strong and stable leadershipwith strategic vision. The awarenessamong the senior management of themain challenges facing the Departmenthas led directly to requests for capacitydevelopment support.