Trends in the modernisation of Tax Administrations

1. Trends in the modernisation of Tax Administrations Utrecht, 1 July 2005 Victor van Kommer IBFD www.ibfd.org

2. Items to discuss • Main trends • Risks in modernization • What are the challenges • An example: integrity • An example: resources • Prototypes of organisational culture • Cultural differences • Organisation in five parts (Mintzberg)

3. Main trends • Large Taxpayer units • Strengthening Taxpayer service and public awareness • Autonomy/ Agency model • Risk assessment • Capacity building/HRM and training policy • Integrity/internal control/evaluation process • Performance management • Involvement in tax policy

4. Risks in modernization • National approach (multinationals are global organised) • Supply driven Anglo-Saxon methodologies • Direct taxation overestimated? • Exchange of information / Processes are seldom organised • International cooperation more at the managerial level then at the operational level • Enlargement of management and supporting processes the organisational disease of this decade?

5. What are the challenges? • Continuous learning program • Management as facilitator • International cooperation/ int. audit program • More understanding for the economic environment is necessarily • Real client management (more in attitude then in name and structure) • ICT has to become a supporting process ( ICT was to much a driver) • A future role for Tax administrations as the public databank? • To abandon control mentality and to think in influence (effectiveness instead of efficiency)

6. Integrity • Corruption is a correction on aberrations in society and organisations • Answer is to work on the conditions instead to fight corruption • Use corruption cases as learning examples what went wrong, what were the weak spots in the organisation • Challenge is to compete with the attractiveness of corruption and to make the process behind it more transparent

7. Resources • In Western Europe many tax administrations are male dominated • In Eastern Europe female dominated • But both types suffer from a middle age dominance and less attractiveness for younger professionals • Expensive, more experienced, innovative? • And tremendous training needs in the near future (after retirement of the current generation)

8. Prototypes of organisational culture (1) Equal Learning organisation Result driven organisation Person oriented Task oriented Family oriented organisation Pyramidal organisation Hierarchy

9. Prototypes of organisational culture (2) Equal Scandinavia USA Person oriented Task oriented Southern Europe Latin America Germany France Hierarchy

10. Prototypes of organisational culture (3)

11. Reaction in stress situation Equal Targets and sanctions Dream on Person oriented Task oriented More rules Power abuse Hierarchy

12. Low need for structure Mutual adjustment Task prior to relationship Minimum amount of targets and control Strategic planning No news is good news Conflicts not threatening Fulfilment High need for structure Direct supervision and standardisation Relationships before task Group targets with formal control Short term precise planning and strict implementation Boss has to invest much energy to obtain negative feedback Strong conflict avoidance Security and secure career Netherlands Middle East Cultural differences

13. Organisations in five parts (Mintzberg) Asia/ Middle East Top management Techno structure Support Staff United Kingdom Middle management France USA Operational Core Germany

14. Conclusion A global language for tax administrations doesn’t exists