Presentation Overview
• RA-FIT Project
• RA-FIT Questionnaire
• Preliminary Results of the 1st Iteration
• Launching the 2nd Iteration
• Lessons Learned
RA-FIT is an IMF initiative to:
• Gather and analyze revenue administration data (quantitative and qualitative)
• Establish baseline measures by appropriate grouping (e.g. regions/income level)
• Raise the importance of revenue administration performance measurement
• Make data/analysis available to member countries for improving cross-country comparisons and benchmarking (seek to provide data, not rank administrations)
• Improve the quality and effectiveness of IMF’s Technical Assistance
The RA-FIT Project
• Our goal: Help strengthen Tax and Customs Administrations’ management and operational performance.
• Our principle: “If you can’t measure it, you can’t manage it.”
• Yet, the first RA-FIT exercise (2012) shows that revenue administration performance measurement has a long way to go, especially in developing countries.
Questionnaire Structure (1st Iteration)
• A 62-question survey organized along the following themes: Revenue Data Tax and Customs Administrations’ Institutional Arrangements
(type of entity, autonomy, office network, staffing, cost) Tax Administration Operations (registration, filing, audit,
arrears enforcement, dispute resolution) Customs Administration Operations (selectivity channels and
clearance times, post-clearance audits)
• Targeted 120 countries (mainly developing countries supported by our Regional Technical Assistance Centers).
Survey Response Summary
Received returns from 85 of the 120 countries surveyed(70 percent response rate)
9
Composition of Survey Respondents
LIC
LMIC
UMIC
HIC
0% 5% 10% 15% 20% 25% 30% 35%
The income group composition of the 85 respondents
Response rate
AFR
APD
EUR
MCD
WHD
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
The regional composition of the 85 respondents
Response rate
60% of respondents are from LIC AND LMIC countries; 72% are from AFR and WHD (mainly Caribbean and Central America)
Data Issues• Key issues to consider:– Responder bias• Not all countries responded to survey• Some countries unable to provide responses to all
questions• Uncertainty regarding definitions of key concepts
– Structural data issues• Diversity of respondents, will affect summary findings
at “overall” level, vs. income or regional levels• Outliers in the response data
Revenue Data• Analysis combines RA-FIT and WEO data• Key issues to investigate:– What can we say about the relationship between
revenue collection and development level?– Does revenue composition (tax type) differ across
geographic regions/income grouping?– Are there any insights on how different taxes
behaved over the past decade (and during the crisis) across regions?
– How does the VAT behave across countries?
13
Taxes on goods and services Social security Taxes on international trade Personal income tax Corporate income tax0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Africa
Asia and Pacific
Europe
Middle East and Central Asia
Western Hemisphere
Tax
Reve
nue
as a
per
cent
of G
DP
Source: World Economic Outlook.
Tax Composition- 2012
14
RA-FIT VAT Composition- 2010
LOW INCOME COUNTRIES LOWER MIDDLE INCOME COUNTRIES
UPPER MIDDLE INCOME COUNTRIES
HIGH INCOME COUNTRIES GRAND TOTAL0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
44% 32% 35% 32% 35%
49%52% 41% 43%
46%
7%16%
24%18%
Refunds % of Gross - 2010
Import % of Gross - 2010
Domestic % of Gross - 2010
Institutional Arrangements • 60 percent of the RA-FIT respondents have tax
and customs administration conducted by directorates of MoFs; the balance have adopted more autonomous arrangements (semi-autonomous bodies with or without boards).
• Unified semi-autonomous bodies are predominant in Anglophone Africa (85 percent of respondents) while less autonomous arrangements predominate in Asia, Middle East and the Caribbean.
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Institutional Arrangements
21%
1%
6%
72%
Tax and customs integrated ?
AFR APD EUR WHD No
4%1%
9%
4%
82%
Social security collected by the administration?
AFR APD EUR WHD No
17
Human Resources
AFRICA ASIA PACIFIC EUROPE M/E & C ASIA WESTERN HEM Grand Total0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
56%60%
65%60% 59% 58%
19% 10%
10%14% 18% 16%
16%20%
12% 16% 14% 15%
10% 10% 10%
Debt Collection
Audit, Investigation and Verification
Client Account Management
Corporate Support
66 respondents provided tax staffing information from the 83 countries completing tax operations
18
Cost of Collection-Tax Admin
OECD – CIS HIC SAMPLE (13) 1.16% 88% 12%
68 respondents provided total annual expenditure information from the 83 countries completing tax operations
Total Cost of Collection - 2010 Operating Cost % - 2010 Cap Ex Cost % - 2010
LOW INCOME COUNTRIES 2.41% 95% 5%
LOWER MIDDLE INCOME COUNTRIES 2.15% 94% 6%
UPPER MIDDLE INCOME COUNTRIES 1.86% 91% 9%
HIGH INCOME COUNTRIES 1.16% 97% 3%
LOW INCOME COUNTRIES (17)
LOWER MIDDLE INCOME COUNTRIES (24)
UPPER MIDDLE INCOME COUNTRIES (23)
HIGH INCOME COUNTRIES (17)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
2.41%2.15%
1.86%
1.16% Total Cost of Collection - 2010
19
Cost of Collection- Customs Admin
48 respondents provided total annual expenditure information from the 63 countries completing customs operations
Total Cost of Collection - 2010 Operating Cost % - 2010 Cap Ex Cost % - 2010
LOW INCOME COUNTRIES 2.60% 95% 5%
LOWER MIDDLE INCOME COUNTRIES 2.79% 95% 5%
UPPER MIDDLE INCOME COUNTRIES 4.08% 83% 17%
HIGH INCOME COUNTRIES 5.53% 83% 17%
LOW INCOME COUNTRIES (12)
LOWER MIDDLE INCOME COUNTRIES (17)
UPPER MIDDLE INCOME COUNTRIES (14)
HIGH INCOME COUNTRIES (5)
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2.60%
2.79%
4.08%
5.53%
Total Cost of Collection - 2010
20
Large Taxpayer Office Metrics
62 respondents indicated they had LTOs and 47 provided some information
% to Total Staff - 2010 Taxpayers to Staff - 2010 LTO Revenue as % of Total - 2010
LOW INCOME COUNTRIES 5% 7 45%
LOWER MIDDLE INCOME COUNTRIES 6% 13 50%
UPPER MIDDLE INCOME COUNTRIES 4% 13 50%
HIGH INCOME COUNTRIES 2% 40 31%
Sample Average 5% 13 47%
OECD – CIS HIC SAMPLE (13) – 2011 4% 41 NA
Corporate Taxpayers
Avg. No. of LTO Corporate Taxpayers
Avg. No. of CIT Taxpayers
StaffAvg. No. of LTO Staff
Avg. No. of Staff
Revenue% of LTO Revenue
% of Non-LTO Revenue
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On-time Filing Rates
Corporate Income Tax - 2010 Personal Income Tax - 2010 VAT - 2010 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
46.2%
31.0%
72.3%
47.8%
43.5%
63.2%
53.5%
47.3%
72.2%
49.3%
44.7%
69.1%
LOW INCOME COUNTRIESLOWER MIDDLE INCOME COUNTRIESUPPER MIDDLE INCOME COUNTRIESGrand Total
22
Audit Mix
LOW INCOME COUNTRIES (16)
LOWER MIDDLE INCOME COUNTRIES (20)
UPPER MIDDLE INCOME AND HIGH INCOME
COUNTRIES (19)
Grand Total (55)0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
53%
25% 23%33%
28%
50% 52%
44%
19%25% 25% 23%
Desk AuditsIssue Oriented Audits Comprehensive Audits
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Audit Coverage as a % of Taxpayer Population
40 respondents provided audit coverage information
LIC
LMIC
UMIC/HIC
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Coverage> 5%Coverage 3% - 5%Coverage 1% - 3%Coverage 0% - 1%
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Audits assessments as a % of collections
AFRICA (20) ASIA PACIFIC (7) EUROPE (7) MIDDLE EAST AND CENTRAL ASIA (3)
WESTERN HEMISPHERE
(17)
Grand Total (54)0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
5.35%
8.76%
6.86%
11.50%
6.14%6.58%
25
Customs: Traffic by Channel
LIC LMIC UMIC HIC Grand Total0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
51.50%
34.39%25.84%
19.99%
34.07%
37.87%
23.57%
51.70%
19.91%
34.78%
10.63%
42.04%
60.09%
31.15%
Green Channel
Yellow Channel Traffic
Red Channel Traffic
26
Customs: Traffic by Channel
AFR APD EUR MCD WHD Grand Total0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
43.22%
31.80%
22.78%
41.00%
27.02%34.07%
39.53%
27.80%40.63%
16.33%
35.23%
34.78%
17.24%
36.59%42.67%
37.75%31.15%
Green Channel
Yellow Channel Traffic
Red Channel Traffic
2nd Iteration
• New developments for the 2nd round:– Adoption of a web-based platform (rather than an
Excel workbook)– Partnerships with CIAT and WCO– New set of (refined) questions– Development of a dashboard
• Web-based platform to be launched in 2014 Q1
Lessons Learned
• Several data problems and challenges (missing data, inconsistencies, sample size)…but, yet, many interesting early conclusions (as we just saw).
• Easy to write strategic plans on paper; much more difficult to apply effective strategic management daily…i.e. measure and follow performance systematically as part of a decision-taking mechanism.
• Performance measurement is an area deserving more international attention and cooperation.