Revenue Administration Reform Project and Further Restructuring for Higher Efficiency and Effectiveness

1
Revenue Administration Reform Project and
Further Restructuring for Higher Efficiency and
Effectiveness
REPUBLIC OF BULGARIA MINISTRY OF FINANCE
NATIONAL REVENUE AGENCY

• ITD, 4-6 May 2011, Tbilisi, Georgia
• Nikolay Getov, Bulgaria

2
NRAs Mission and Vision
The National Revenue Agency collects effectively
taxes and social security contributions, while
encouraging voluntary compliance and requiring
from everyone their lawful liabilities
Modern and Effective Revenue Administration in
Service of Society
3
NRAs Strategic Goals
Collection of taxes and social security
contributions at high level of effectiveness and
efficiency, and encouraging voluntary compliance
NRA reliable partner in the cooperation with
national and international institutions
NRA preferred place to work
Enhancing the organizational performance
4
Revenue Administration Reform Project (RARP),
2003-2009

• Development Objectives
• Implement an EU-compliant, efficient, and
  sustainable revenue collection system that
  facilitates private sector development
• Reforms and activities focused on
• maximizing community voluntary compliance
• promoting effectiveness and efficiency
• establishing a professional workforce
• reducing possibility for corruption
• improving equity and fairness
• reducing the taxpayer compliance burden
• fostering economic growth

5
Further reform objectives and reasons, 2010

• 22 of the 29 former Territorial Directorates were
  collecting only 20 of the total revenue
• Uneven allocation of audit efficiency and
  workload need to improve quality of control
• Need to reduce the corruptions risks
• Need to reduce the number of mid-level managers
• Maintaining full capacity of supportive functions
  in each of the former TDs was expensive
• Need to strengthen Large Taxpayers (LT) services
  and the LT Directorate itself

6
The context 2009

• Economic crisis
• New government was appointed in mid 2009
• Governments requirements for optimization, incl.
  staff reduction
• Merger with the State Receivables Collection
  Agency
• IMF recommendations

7
The Reform as of 2006 Scope of Work Change
N R A
TAX ADMINISTRATION
NATIONAL SOCIAL SECURITY INSTITUTE
Corporate income tax Personal income tax Value
added tax
Corporate income tax Personal income tax Value
added tax Premiums collection Obligatory
Social Security Contributions Obligatory Health
Insurance Contributions
Benefits distribution Pensions and other
Benefits
Premiums collection Obligatory Social Security
Contributions Obligatory Health Insurance
Contributions
Outside NRA Excise duties Local taxes and fees
8
The change Organizational structures

• Before 2006

• From Jan 2006

• NSSI (budgetexpenditures)

• NSSI

NSSI HQ
NSSI HQ
28 Territorial directorates
28 territorial directorates

• NRA

• Tax Administration

General Tax Directorate
NRA HQ
5 Appeals and Performance Management Directorates
29 TDs
5 Regional Directorates
28 TDs
112 tax offices
1 Medium-Sized Taxpayers Directorate
167 tax bureaus
1 Large Taxpayers Directorate
9
The change Organizational structures

• 2006-2009

• From Jan 2010

• NRA

• NRA

NRA HQ
NRA HQ
5 Appeals Directorates
5 Appeals Directorates
28 TDs
5 TDs
1 Medium-Sized Taxpayers Directorate
5 Medium-Sized Taxpayers Directorate
1 Large Taxpayers Directorate
1 Large Taxpayers Directorate

• State Receivables Collection Agency (SRCA)

10
Results and Benefits
For the government
Higher revenues for the budget
Corruption pressure and risks are restrained
Introduced efficiency improvements equivalent to
20 staff reduction for the period 2006-2009
Decreased tax and social security rates
NRA made the administration of all obligatory
social security and health insurance
contributions free of charge
Better exchange of information and joint actions
with other authorities
11
Results and Benefits
For the clients (1)
Preserved option for filing documents and
receiving services in all 28 major towns where
NRA offices are located
One stop shop
E-services
A single tax and social security account and a
single certificate for the presence or absence of
liabilities
Call-centre
Joint audits for taxes and social security
contributions
Customer, not taxpayer
12
Results and Benefits
For the clients (2)
Faster VAT refund
New integrated Revenue Management System
Creating VIP services for large and medium-sized
taxpayers
Simplified and unified forms, procedures, and
taxpayer services
Consultative Board of the NRA
13
Results and Benefits
For the control (audit) process
Centralized assignment of audits and selection of
cases on larger regional basis
Optimized and automated selection process
Flexibility of the resource distribution between
the offices of one TD
Risk management system (non-compliance)
14
Lessons learned from the reform

• Need for strategic thinking and planning at
  senior levels
• Project management skills and teams
• Involve middle level management and encourage
  delegation
• Keep an eye on motivation, human resource
  turnover and organizational risks
• Provide for budget and resources
• On time Communication plan
• Ensure and observe Key performance indicators
  (KPI)