Fiscal Reform and Public Financial Management (FRPFM) Activity

Administrations, in serving the public interest, look to collect the proper amount of tax due to the government at the least economic cost, while conducting their operations in an efficient and effective manner. Given most administrations rely on taxpayers meeting payment obligations of their own accord (voluntary compliance), they perform their role as tax collectors giving careful regard to the relationship of trust that needs to exist between them and their customers. The Institute of Standards and Development (ISTD) Mission Statement emphasizes the importance of managing auditing and collection efficiently and effectively to supplement the general state treasury revenue by promoting the principle of voluntary compliance and disseminating awareness of tax culture to provide high-quality services and achieve the best possible satisfaction. The ISTD's core functions include managing auditing and collection, taxpayer service, and non-filer enforcement, with a focus on making tax payment part of the normal system of doing business and as close to the event creating the liability as possible. A comprehensive system of registration and taxpayer identification is critical for the effective operation of the tax system. Registration is the basis for supporting self-assessment, value-added, and withholding regimes, as well as third-party reporting and matching. The active management of "tax registers" remains a priority area for tax administrations, with over 30 countries reporting formal programs in place to improve the quality of the tax register in 2015. Registry contains address information, entity information, filing requirements, banking information, contact/representation information, and is used by multiple agencies, making maintenance of accurate information essential. Tax collection is the final and downstream link in a chain that starts with registration. Tax administrators need to make tax payment part of the normal system of doing business and as close to the event creating the liability as possible, in order to eliminate or reduce the risk of non or late payment. Laws and practices corresponding with this principle are therefore critical in preventing tax debts from arising in the first place and so avoiding the need for recovery measures. Tax administrations that allow taxpayers to update their records online have seen an increase in trust and confidence in that tax administration, as well as improved data accuracy and efficiency. Revenue collection comparison between ISTD and OECD countries shows that ISTD's total tax revenue collections as a percentage of GDP are lower than OECD countries. However, ISTD's value-added tax (VAT) collections as a percentage of GDP are higher than OECD countries. The life cycle of tax administration includes filing, taxpayer service, post-filing, audit, collection, non-filer enforcement, and criminal investigation. The four pillars of compliance are timely registration in the tax system as a taxpayer, filing tax information and returns on time, reporting of complete and accurate information, and payment of tax obligations on time.