Strategic Plan for Integrated Revenue Agency

1
Strategic Plan for Integrated Revenue Agency

• The Government of the Czech Republic
• and
• The World Bank

2
Background

• Government Resolution 1336 (3 Nov 2008)
• Approves the concept of the Project of Integrated
  Revenue Agency (JIM)
• By 31 May 2009, mandates MoF MoH MoLSA
• Create implementation plan for JIM
• Elaborate a background paper for the draft law
  that would regulate the integrated system of
  revenue collection
• Emerging Consensus among Agencies
• 14() revenue offices mirroring the regional
  administrative structure (kraj)

3
Plan of the Presentation

• Vision
• Key Concepts
• Objectives
• Key Elements of Reform
• Preview of Risks
• Reform Strategy, Governance Structure, and Change
  Management
• Summary of Risk Mitigation Measures
• Monitoring and Evaluation Key Performance
  Indicators

4
Vision

• To create a modern revenue agency on par with
  similar organizations in other advanced
  countries, responsible for raising revenue for
  public expenditure, safeguarding societys
  welfare, and promoting economic growth.
• The basic premise behind this vision is the
  fundamental willingness of the Czech citizens to
  fulfill their revenue obligations. The new
  agencys mission is to create incentives for
  voluntary compliance.

5
Key Concepts

• Self-Assessment
• Voluntary Compliance
• Risk management
• Functional organization
• Specialization
• Segmentation
• Equity and fairness

6
Objectives

• Improved efficiency
• Improved effectiveness
• Reduced compliance cost
• Simplified and rationalized revenue
  administration
• A competent workforce as the key asset
• Reduced contact between revenue payer and revenue
  authorities
• Full use of modern technologies

7
Key Elements of Reform I

• Improved efficiency
• Reduced the number of revenue offices
• Reduced compliance burden and administrative
  costs
• Functional organization
• Improved effectiveness and incentives to pay
  revenue
• New attitude toward compliance - from control
  culture to service culture, promoting voluntary
  compliance
• Improved client service
• Greater use of third-party information
• Risk analysis as a basis for audit and
  enforcement
• Simplified and rationalized revenue
  administration
• Greater specialization and functional focus
• Enhanced transparency in revenue administration
• Strategic management for the organization

8
Key Elements of Reform II

• A competent workforce as the key asset of the IRA
  (JIM)
• Qualified and motivated workforce
• Recruitment and selection based on key
  competencies
• Career development strategy that attracts and
  retains staff
• Attractive and collegial working environment
• Reduced contact between revenue payer and revenue
  authorities
• Shift from geographic to functional focus
• Optimization of office network to regional
  (krajský) level
• Centralized processing of filing, payments and
  accounting
• Targeted services based on taxpayer segments and
  risks

9
Key Elements of Reform III

• Full use of information technology
• IRA as a front-runner in full-scale use of
  e-government
• Mainstream the use of e-filing and e-processing
• Efficient data access by competent authorities
  (e.g., CSSZ, health insurance, etc.)
• Effective use of third-party information for
  revenue purposes
• Secure access to own information

10
Risks

• Political risks
• Political commitment may wane
• Municipalities may resist consolidation of
  offices
• Agency-level risks
• Different organizational cultures and
  remuneration structures of agencies may create
  conflicts
• Different legal and institutional frameworks may
  be politically difficult to change
• Different agencies may not collaborate
  sufficiently
• Process-level risks
• Data management systems may not be integrated in
  a timely manner
• Important information on contributors may be lost
  in the transition

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Strategy for Reform I

• Create a Board of IRA (JIM) representing key
  stakeholders (MoF, MoLSA, MoH,)
• Create consultative collegium of taxpayers and
  contributors
• Create management structure of IRA (JIM) with
  strong HQ functions (strategy planning
  monitoring)
• Develop functional organization
• Harmonize legal framework and assessment base
• Transfer non-core functions to relevant
  departments
• Subsidy, price audit,
• Road toll, waste management,

12
Strategy for Reform II

• Map business processes of all existing revenue
  agencies
• Conduct functional review of the existing
  agencies and develop functional design
• Design business process model for IRA (JIM) based
  on self assessment, centralized processing and
  risk management
• Develop transition plans from current set of BPs
  to the integrated model

13
Strategy for Reform III

• Develop competency profiles for each function in
  IRA (JIM)
• Determine staff requirement for IRA (JIM)
  ensuring adequate positions for newly integrated
  functions
• Design a recruitment and compensation policy for
  initial staffing of IRA (JIM)
• Conduct training needs assessment and design
  immediate training program to establish IRA (JIM)
• Create redeployment, placement, and re-training
  services for non-recruited employees
• Design long-term HR management policies and
  training

14
Strategy for Reform IV

• Review existing IT infrastructure and software
  systems
• Design IT strategy for IRA (JIM) - hardware,
  communications, system software and applications
  - for newly designed BPs
• Design data migration strategies to ensure
  individual-based and real-time information
• Retain parallel functioning of IT systems until
  fully mature
• Develop data management and exchange strategies
• Develop management information systems
• Develop information security and business
  continuity strategies
• Develop technical specifications to procure
  systems

15
Governance Structure for Reform

• Project Board (Ministers of Finance, Labor and
  Social Affairs, and Health)
• Steering Committee (Heads of agencies and other
  key players chaired by Dy. Minister of Finance)
• Project Coordination Unit
• Thematic Working Groups
• BP, Functional, HR, Legislative, IT, Change
  Management, Customs-Tax Integration, SS-Health
  Revenue Functions.
• Internal structure Convener for each group,
  named by Project Director representatives named
  by relevant agencies Change Mgt Facilitator in
  each group.
• World Bank Advisory Services

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Change Management I

• OBJECTIVES
• to ensure smooth reform process management
• to support the matrix structure of
  decision-making during the reform process
• to provide a mechanism for discussion and
  resolution of conflicts among the thematic groups
• involve internal and external stakeholders in the
  design of IRA (JIM)
• establish channels for a two-way interchange of
  information with the agencies being reformed and
  external stakeholders, including feedback
  mechanisms and
• monitor the evolution of broad-based political
  and social support for the project, and devise
  strategies for maintaining such support.

17
Change Management II

• Change Mgt Thematic Group
• CM facilitators from all other groups
• Internal and external communications experts
• External stakeholder representatives, when
  necessary, by invitation
• Matrix structure of decision-making
• Project Management Prince (or similar)
• Internal Communication and Feedback
• Ensure that the management of all agencies
  participate in IRA design
• Ensure communication channels between management
  and staff of all agencies during transition
• Staff surveys to monitor staff awareness and
  response to change
• Regional outreach top management communicate
  change to the local staff
• External Communication and Feedback
• Ensure feedback and constructive discussion with
  external stakeholders (private sector, labor
  unions, other government agencies, parliament)
• Reform website with a discussion forum moderated
  by CM group
• Periodic public events

18
Risk Mitigation Measures
19
Key Performance Indicators