Designing JIM: Report from Thematic Working Groups

1
Designing JIMReport from Thematic Working Groups

• Government of the Czech Republic and the World
  Bank
• February 27, 2009

2
Introduction
3
Introduction

• Context for the JIM project
• Pressure on the revenue in the environment of the
  global financial crisis
• Key reasons for creation of JIM
• improve efficiency and effectiveness
• reduce compliance costs
• Sequencing
• Organizational structure and business processes
  must be developed in the initial phase
• HR strategy, legislation harmonization, and IT
  follow

4
TWG 1 Business Process Re-engineering

• Main Issues
• Ways to achieve efficiency and effectiveness
• modernize, harmonize and centralize processes
• use the extra resources for compliance management
  (service, audit and enforcement)
• harmonize revenue administration legislation
• offer efficient filing and payment options
• ask only for information to be processed in the
  first instance
• Business process design must be based on these
  main objectives and key concepts of modern
  revenue administration

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TWG 1 Business Process Re-engineering

• Recommendations
• Create a Standard Business Process Model for JIM
  with the following characteristics
• - possible to apply to almost all the revenue
  elements
• - can accommodate a majority of the existing
  processes
• - can become the basis for a full set of detailed
  business processes to be developed
• - can become the initial input for the new IT
  system

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TWG 2 Functional Organization

• Main Issues
• Initial diagnostic completed for the following
• Segmentation of the client base for tax, customs,
  health and social insurance
• Regional distribution of the taxpayers and
  contributors
• Current allocation of existing resources
• Current organizational structures and plans for
  changes

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TWG 2 Functional Organization

• Recommendations
• Create Large Taxpayer Office at an early stage
• Strengthen taxpayer segmentation for the small
  and medium-sized taxpayers
• Take urgent decision on the merger of the core
  revenue functions of the tax and customs
  administrations
• Adapt the plan of short-term steps for the merger
  of tax administration and social contribution
  collections

8
TWG 3 Human Resource Management

• Main Issues
• No common legislation for employment
• No common concept of HR functions
• Differences in training, competencies, and pay
  scales
• VZP staffing based on competency profiles, while
  others are not
• Transfer of collection staff from health and
  social security will need incentives to attract
  them to JIM
• Training infrastructure exists in all agencies,
  but needs to be re-oriented towards JIM

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TWG 3 Human Resource Management

• Recommendations
• Identify staff assigned to the collection
  function in the social and health insurance
  agencies
• Identify issues regarding differences in
  employment conditions to facilitate the
  integration of functions into JIM
• Study tours for TWG 3 members to relevant
  countries in 2009

10
TWG 4 Legal Harmonization

• Main Issues
• TWG4 depends on input from other TWGs
• However, many laws require change
• Social Security and health insurance in
  particular
• Also tax administration, income tax and other
  laws
• Partial list of laws to be amended completed
• Draft of legislative basis for tax administration
  must be reviewed in the context of JIM

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TWG 4 Legal Harmonization

• Recommendations
• Short-term Harmonize base for health insurance,
  social security, and income tax
• Prepare a memo describing the legal framework for
  JIM
• Draft law delineating key responsibilities,
  governance structure, organizational structure,
  and circulate to each TWG
• Review draft law on registration of individuals
• Adapt draft tax administration law to ensure
  alignment with the plan developed for JIM
• TWG 4 monitor all draft legislation by four
  agencies to ensure consistency with JIM

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TWG 6 Integration of Social Security and Health
Insurance

• Main Issues I
• Need for Service Level Agreements between JIM and
  CSSZ/Health Insurance Companies
• Divergent assessment for Social Insurance, Health
  Insurance, and Income Tax
• Different penalties for filing and payment
  delinquencies
• Legal impediments to data sharing
• Implications of International and EU legal
  obligations
• Divergent registration requirements of CSSZ and
  HICs
• Complex role of CSSZ regarding employer contact
  for sickness benefit work injury

13
TWG 6 Integration of Social Security and Health
Insurance

• Main Issues II
• Implications for HIC business strategies
• Collection
• Penalties
• Individualization
• Who receives State contributions for those
  outside workforce to HICs?
• CSSZ/HICs need significant organizational and
  technical re-structuring post-JIM
• System of re-distributing health contributions
• Present system of SI and HIC contribution
  accounts must be addressed

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TWG 6 Integration of Social Security and Health
Insurance

• Recommendations
• Interim institutional co-operation piloted in
  selected regions/districts (data-sharing tasks,
  combined data collection measures, joint CSSZ/HIC
  /TA inspection teams, and CSSZ-HIC TA database
  cross-matching)
• Detailed business requirements to be defined by
  each participating institution (per function
  transferred to JIM)
• Sequencing Incorporate lessons learned about
  JIMs capacity after Customs-Tax merger

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TWG 7 Integration of Tax and Customs

• Main Issues
• The main principle for determining functions to
  be included in JIM whether revenue is raised as
  a result of the function
• The role of customs in an EU - country with no
  external land border
• EU legislation does not concern itself with which
  agency does a particular job
• How should non core functions in tax and customs
  be handled?
• Considerations concerned with splitting up
  organizations raises a number of issues in
  relation to cost, possible synergies, efficiency
  etc.
• Functions/ tasks that are performed in support
  of/on behalf of another agencys policy should be
  considered as a candidate for transfer to that
  agency

16
TWG 7 Integration of Tax and Customs

• Recommendations

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TWG 8 Change Management

• Main Issues
• Project management
• Internal Communications
• staff survey questionnaire ? design appropriate
  internal communication strategy
• External Communications
• JIM website launch and discussion forum roles
• Press releases and future public events

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TWG 8 Change Management

• Recommendations
• Continue to convene regularly between the WB
  missions
• Project Management
• Excellent project documentation, but need to
  speed up adoption of PM software
• Amend governance structure of the project TWG 8
  mapped to Project Management team
• Recruit a full-time professional project
  management team
• Internal Communications
• Develop and implement employee survey
• Present survey results to the next WB mission as
  a basis for internal communication strategy
• External Communications
• Launch JIM website and manage discussion forum
• Work with the MoF press secretary to issue the
  Press Release
• Work with private sector stakeholders

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Recap Early Steps towards JIM

• Decide on merging core revenue functions of tax
  and customs as a first step to JIM
• Create Large Taxpayer Office to secure the
  revenue and pilot joint compliance programs
• Adopt single taxpayer/contributor ID
• Develop the law to harmonize the base for tax and
  contributions
• Plan for centralized data processing system