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CONTENTS

Introduction……………………………………………………………………………………...

1

About IRD ……………………………………………………………………………………... 1

Performance management system for IRD…………………………………………………..

Setting Mission Vision and Strategy: Employing MBO and BSC……………………..

Mission of IRDVisions of IRDStrategic objectives of IRD

Identifying Performance Indicators: Employing Logic Model and TQM…………….Performance Measurement (Monitoring and Evaluation) : Employing Performance

. Agreement , BSC………………………………………………………………………...

Feedback : Employing TQM, Performance Agreement and BSC……………………..

2-52

3

45

Conclusion………………………………………………………………………………………

5

Annexure

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Introduction : Though the concept of performance measurement has not yet taken it’s root in Bangladesh except performance based reward system in NBR and the culture of Annual Confidential Report (ACR), but it is necessary to introduce a result based performance management system here. Internal Resources Division (IRD) is one of the Divisions under Ministry of Finance, for which I going to suggest a performance management system through this assignment.

About IRD : Internal Resources Division (IRD) is one of the Divisions under Ministry of Finance. It was set up at the instruction of the government through Notification no. 4/59/79 - Rules dated Dhaka the 21st April, 1979 by reorganizing the Ministry of Finance. Functions allocated to the Internal Resources Divisions of Ministry of Finance are shown hereunder :

Raising of necessary domestic revenue for the Government. Matters relating to all taxes, customs duties, fees etc. including Income Tax, Sales Tax,

Excise Duties, Customs Duties, Fees etc. other than land revenue. Lotteries. All Committees and Commissions on taxation and internal resources mobilization. National Savings. Stamps Duties. Supply and Distribution of all kinds of stamps and administration of the stamps Act.1899

(II to 1899), and the rules made there under. Any other matters relating to internal resources mobilization. Administration of B.C.S. (Customs and Excise). Administration of B.C.S. (Taxation). Secretariat administration including Financial matters. Administration and control of subordinate offices and organizations (if any) under this

Division. Liaison and International Organizations and matters related to treaties and agreements

with other countries and world bodies related to subjects allotted to this Division. All laws and subjects allotted to this Division. Inquiries and statistics on any of the subjects to this Division. Fees in respect of any of the subjects allotted on this Division except fees taken in courts.

List of Organizations under Internal Resources Division National Board of Revenue (NBR). Directorate of National Savings (DNS).Tax Appellate Tribunal, Dhaka.Custom, Excise and VAT Appellate Tribunal, Dhaka.

Designing a Performance Management System for Internal Resources Division (IRD)

A performance management system comprise of various phases which include :[IRD performance management - 3]

Setting missions visions and strategy : Employing MBO and BSC

Missions of IRD : Ensuring mobilization of adequate internal resources for the overall dev of the country through skill and capacity dev of officers and staff engaged in the collection of revenues and implementing institutional reforms and organizational expansion programmes.

The fiscal policy of GoB aims to narrow the gap between expenditure and income in order to minimize budget deficit. On July 9, 2009 GoB has passed a ne law “The Public Moneys and Budget management Act 2009 ( Act no 40 of 2009)”. Under the article 3 of Act 40 of 2009 the fiscal management activities of the government shall be guided as follows :

1. The government shall carry out all appropriate measures for the improvement of macroeconomic stability as well as maintain the annual budget deficit at a sustainable limit.

2. The Gov shall follow specified procedure for sound fiscal and public debt management and shall carry out following actions to maintain affordable public debt:

a. Borrowing from domestic sources shall be reduced gradually and annual borrowings from these sources shall be within a reasonable limit

b. Contingent liability due to sovereign guarantee of the government shall remain within a sustainable limit

c. Public debt obtained from domestic and external sources shall be reduced gradually every year as a percentage of GDP

3. The gov may obtain ways and means advance from BB to meet regular cash requirements within a specified limit and in case of exceeding such a limit the additional money may be obtained as overdraft, other than the government shall not borrow from the BB

4. Whatever is mentioned in the sub-section(3), the BB may continue to purchase primary securities like treasury bills, bonds etc. Issued by the government within a specified time limit

5. The government shall determine the annual limits of budget deficit, borrowings from domestics and external sources and contingent liabilities out of guarantees, size of pub debt and time limit to purchase primary securities by BB through specified procedures .

Visions of IRD : Effective fiscal policy is fundamental to achieving desired economic growth, maintaining macroeconomic stability and addressing issues relating to the poverty reduction and income equity. The GoB has adopted a prudent fiscal management framework based on a moderately expansionary fiscal strategy that aims at sustaining the growth momentum while mitigating the negative impacts of the recent global recession. The GoB has adapted Sixth Five Year Plan that incorporates an increase in the level of aggregated investment to 30-32% of GDP in order to achieve a growth rate of 8% by FY’15 .

Strategic objectives of IRD :

Rationalizing org, manpower and logistics and infrastructure dev: Building ICT Infrastructure and Automation: Tax education, advertisement and taxpayers’ service:

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Expanding the tax net, preventing tax evasion and simplifying tax laws and the tax payment system

Training and increase professional skill Printing of various types of saving schemes, publicity, payments of commission

and transportation etc.

Ministry of Finance (MoF) enacted law “Act 40 of 2009” in order to make it mandatory to set strategic mission visions and strategy. In order to make it participatory and measureable , MBO model can be applied for organizational and individual goals which should be translated into operational terms employing BSC.

Identifying Performance Indicators: Employing Logic Model and TQM

Based on strategic objectives, performance indicators are : Unit target, Actual target and Revised Target. Overall indicators of IRD include-

Increase tax-GDP ration Share of income tax in total tax revenue Share of local VAT in total tax revenue Ratio of expenditure /revenue in the collection of revenue Increase non-NBR revenue (Stamps) Increase national savings through savings schemes

Other performance indicators include :-

Input – Based on Visions , IRD estimated it’s staffing , costs and equipments. Reform initiatives are also taken place which include recruitment of better qualified candidates through Administration of B.C.S. (Customs and Excise) and Administration of B.C.S. (Taxation).

Activity – Based on strategic missions and visions , activities include-

1. Administrative reform and reorganization , and institutional and infrastructure dev2. Modification and revision of laws3. Ensuring printing and supply of judicial and non-judicial stamps4. Approving lottery activities and formulating/ reviewing lottery policies5. formulating/ reviewing the Stamp act – increase non-tax revenue6. formulating and implementing savings schemes helpful to cross section of people and

professionals7. Fixing and rationalizing interest rate/investment ceiling deduction at source of the saving

schemes

Output – Based on missions and visions of IRD , specified output are : Increase tax-GDP ration , Share of income tax in total tax revenue, Share of local VAT in total tax revenue , Ratio of expenditure /revenue in the collection of revenue , Increase non-NBR revenue (Stamps) .

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Outcome and Impact – In accordance with the visions of IRD , Long term result fixed up to Fiscal Year 2015 to raise GDP rate 8% by following effective taxation procedures.

Quality- For ensuring quality of service , IRD can apply TQM where customers (Citizens) satisfaction is the key determinant of quality which can be ensured by deliberating efforts to eliminate errors and reduce wastes in each and every aspects of organizational activities .

Satisfaction – IRD can conduct survey annually among their clients in order to determine their satisfaction level with the service provided by the officials and staffs of IRD.

Performance Measurement (Monitoring and Evaluation) : Employing Performance Agreement , BSC

Measuring performance related to quantified objectives is one of the principles of performance management. Based on the performance indicators (Unit target, Actual target and Revised Target) , IRD can monitor and evaluate it’s employee performance using Performance Agreement model and BSC Model.

Performance Agreement Model : A committee should be formed by either Public Service Commission (PSC) or by Ministry of Finance (MoF) to monitor the performance of IRD personnel. According to this model, IRD will prepare it’s own performance design for improving efficiency and effectiveness before the start of the new fiscal year where Critical Success Factors (CSF) and Key Performance Indicators (KPIs) should be clearly mentioned. At the beginning of the FY , IRD officials should compulsorily sign an agreement with the committee. The agreement contain :

A summary of annual performance plan revealing the main programs that must be accomplished by the signing officials .

The strategic goals that are expected to be attained . The performance Indicators of IRD personnel (Unit target, Actual target and Revised

Target) Budget of each program ; and One page statement of commitment

At the end of the FY, the IRD authority will submit it’s report to the Committee for assessing it’s performance .

Balance Score Card Model : As a multi-dimensional performance management tool, BSC will measure organizational performance based on four dimensions including Finance, Customer, Internal Business process and Learning/Growth.

Financial performance – Budget allocation and expenditure in practice will be assessed to see how money has been spent and program output is related to the organizational missions.

Internal process – this indicates the improvement of working process. Revising the working procedures through delegation , amendment of rules, downsizing or recruiting

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qualified employees to facilitate the achievement of the stated goals will be the criteria to assess the performance under this category.

Customers satisfaction- Survey will be conducted to measure customer’s satisfaction in terms of responsiveness to the customer’s needs.

Ability to learn and growth – This indicates how well IRD will have prepared itself for incoming changes and how far it will have developed it’s human resources

Personnel with high score must be rewarded with extra finance.

Feedback : Employing TQM, Performance Agreement and BSC

In order to collect feedback and take corrective measures, IRD can employ TQM, Performance Agreement and BSC models .

TQM – It can be applied in IRD to monitor the performance through focusing on continuous improvement. TQM tries to prevent errors from occurring and if errors are found , corrective actions are undertaken to improve the service.

Performance Agreement-Through measuring performance of the employees in achieving the agreed targets, feedback of a program will be obtained through applying performance agreements. Key Performance Areas (KPAs) and Core Managerial Competencies (CMCs) must be specified and the agreement. Training should be provided to the senior officials of the IRD adopt with the new performance measurement process. Outstanding performers must be rewarded.

BSC – BSC system will evaluate the overall team performance of IRD personnel.

Conclusion : The government’s fiscal strategy of Bangladesh emphasize the twin goals of maintaining overall macroeconomic stability and fiscal sustainability while at the same time enhancing investments in physical infrastructure specially in the power and transport sector as well as in developing Human Resources for achieving the high growth rates envisaged in the Six Five Year Plan. Internal Resources Division (IRD) is one of the Divisions under Ministry of Finance which works to promote internal resource mobilization of the government. Performance of it’s personnel can be measured using MBO, BSC, Performance Agreement Model, Logic Model and TQM

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Annexure

Organogram of IRD :

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