A great number of tax administration agencies (or any public sector agency for that matter) around the world have within their Mission Statement, Vision Statement, Values, Goals, etc. some version of:
- “fair and efficient tax administration”
- “collect revenue or taxes efficiently.”
- “achieve compliance in the most efficient and cost-effective manner.”
- “administering tax laws in a fair, secure and efficient manner”
- “efficiently and effectively administer the revenue laws”
- “being impartial and increasingly effective and efficient”
- “license efficiently and regulate fairly”
- “improving its performance and efficiency”
- “professionalism, efficiency, fairness, integrity”
These are just a few examples; a complete list would be lengthy.
There are two common areas that the public sector struggles with regarding recruiting and retaining employees. As to revenue agencies, in particular, it is difficult to compete with the private sector for auditors/accountants. Many of these employees initially utilize the agency’s resources to gain valuable experience and parley that into a more lucrative private sector position.
Likewise, almost all public sector agencies regardless of their responsibility face challenges in recruiting and retaining information technology staff because they lack the ability to offer competitive compensation. Additionally, there seems to be a tendency on the part of budget authorities to not fully commit to funding an adequate number of positions for information technology. Therefore, in the arena of information technology, public sector agencies are confronted with the problem of not being afforded enough positions compounded with not being able to fill the limited number of positions they have because of the lack of competitive compensation.
When these struggles are added to the common theme of “efficiency” in revenue collection, regulation, and operation; public sector agencies are very attuned to exploring solutions to aid themselves, taxpayers (business partners) and employees in these efforts.
As a result, it is becoming increasingly clear to all public sector entities that they must gain these “efficiencies” through the use of comprehensive, yet easy to use technology solutions. This emphasizes the importance of choosing Commercial off the Shelf (COTS) software solutions. The more voluntary compliances an agency is able to achieve, the more “efficient” is the agency's operation. With voluntary compliance also comes the ability to focus efforts on those taxpayers who may not be as keen on voluntarily complying. Often this provides an increase in revenue because it affords auditors additional time to complete tasks related to those taxpayers. The agencies understand that most business partners want to comply and given today’s expectations and experiences with technology solutions used in their personal lives, there is increasingly the same expectation out of their interactions with the public sector. Business partners simply want a way to voluntarily comply as quickly and simply as possible.
Through the use of solutions like SAP Tax & Revenue Management, which is a Tier 1 COTS solution, revenue agencies can provide this service to their business partners and at the same time capitalize on the solution’s core functionalities and ease of use by giving the public sector employees better tools to quickly, correctly, and “efficiently” complete their jobs. Better tools allow the agencies to operate with a leaner workforce (auditors and information technology), but it also provides the employees with an opportunity to perform their tasks with more satisfaction. This, in turn, provides a two-fold benefit; more “efficient” revenue administration and happier employees who may be more inclined to stay with the agency knowing that they are being provided great tools to work with on a daily basis.
The selection of a proper solution and maintenance service provider also enables the public sector entity to operate with less internal information technology support. By doing this (depending on the organizational structure) it may free up the filled positions to be compensated more competitively, as well as, provide the employee with the opportunity to become high-skilled with a quality proven solution.
Invenio Business Solutions are one of the top three consultancy firms globally for tax and revenue management implementations. For over ten years, we have worked with major governments and public sector organizations around the world conducting the design and implementation of tax systems, in addition to providing ongoing consultancy services and advice. For more information on how to approach the implementation or reformation of tax systems, feel free to contact us anytime.