Developing a Tax Compliance Plan
The learning initiative was delivered as part of the Tax Policy and Administration Learning Program, primarily supported by the Ministry of Finance of Netherlands, the Ministry of Finance of Slovenia and Slovenia's Development Cooperation. The overall objective of the program is to contribute to strengthening of beneficiary institutions’ capacity in implementing the EU recommendations under which the revenue authorities can enhance tax compliance risk management.
In a dynamic environment, organizations need to be alert and responsive to risks that impact on their strategic objectives and which, if left unchecked, may affect their future viability. All tax administrations are required to achieve as good compliance outcomes as possible and to maximize the overall level of compliance with the legislation. The workshop used the case-study approach to guide tax officials through the process of identifying and analyzing the most significant compliance risks in a particular segment, and finding appropriate treatment forms as a part of the compliance risk management process. The results of prioritizing and making choices about what to do and when is the basis for drafting a tax compliance (and enforcement) plan.
How you have benefited
This workshop facilitated a better understanding of the compliance plan as a high-level program which described the most significant compliance risks identified in the tax system and responded to those risks through a range of measures addressing non-compliant behavior. We highlighted the importance of strengthening the organization and management of tax agencies, building capacities in core tax administration functions, reforming the legal framework and the judiciary, and stressing the use of information and communication technologies necessary to improve tax compliance. We also addressed involving taxpayers and engaging them in a dialogue, putting risk management principles and the acquired knowledge together into a holistic approach with the purpose of creating a platform where compliance is achieved right from the start.
By the end of the workshop the participants gained an understanding how to:
- Describe the framework of an effective risk-based compliance plan and evaluate the effectiveness of previous plans
- Improve understanding of the operating context set out in the strategic plan and its parts (mission, vision and values statements, high-level goals and objectives)
- Better understand conducting top-down and bottom-up assessment and prioritization of risks
- Analyze compliance behavior and determine which treatment strategies to implement
- Document the process including efficiency and effectiveness indicators, monitor performance and evaluate the outcomes.
What you have learned
The workshop provided a deeper understanding of treatment strategies so that enforcement and other actions can be tailored to promote better compliance. Tax officials explored strategy models aimed at obtaining the optimal mix of responses to achieve the widest possible impact on voluntary compliance across the taxpayer population. We discussed business, industrial, sociological, economic and psychological factors influencing behavior, different taxpayer attitudes, the underlying causes of non-compliance and the corresponding compliance strategies. The participants improved their capacities in the following areas:
- Principles of customer segmentation (small, medium-sized and large businesses, industry type, type of tax, type of risk) and the use of treatment strategies for different segments
- Risk assessment as the basis for identifying risks for each taxpayer segment or sub-segment
- Importance of using soft and hard skills
- Spectrum of compliance behavior (supporters, triers, resisters and the disengaged)
- Connection between tax compliance plan, management vision, enforcement and performance management
- Input for the annual tax compliance and enforcement plan, which may include: tax policy improvements, institutional strengthening, improved procedures, better use of IT, recruitment and training, networking and partnership with key stakeholders, and public awareness campaign.
The highly participatory learning initiative was delivered in English. Participants were encouraged to share their experiences and country practices.
This workshop was designed for mid to senior level tax officials who have experience in compliance risk management, risk analysis, supervision, control or audit functions within revenue administrations.
Applications were submitted by October 27, 2017. Candidates has to be approved by the CEF. The selected candidates were informed within the week after the application deadline.
No fee was charged for officials working in the public sector.
Travel and accommodation costs for up to two participants from Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Macedonia, Moldova, Mongolia, Montenegro, Romania and Ukraine were covered by the Ministry of Finance of the Netherlands. Costs of the additional self-funded participants from the SEE region (and beyond) were covered by their sending or sponsoring institutions. Meals and refreshments were provided during the event.
Suzan van der Linden - van der Woude, deputy director, Small and medium-sized enterprises segment, Tax and Customs Administration, Ministry of Finance of the Netherlands
Susan has 30 years of work experience at the Tax and Customs Administration of the Netherlands (NTCA), where she has held various positions. Susan’s professional background reaches to almost 26 years of working experience at the Customs Administration until 2013 when she joined the Tax Administration. She has worked as a tax auditor, technical assistant in Surinam, team leader and project leader in the National Enforcement Department, senior staff advisor at the Ministry and deputy director at SME. In addition, she has worked as a trainer at the Customs and Tax Academy and in the area of enforcement strategy. Susan is also interested in change management, governance and enforcement strategies.
Richard Buijs, policy advisor, Small and medium-sized enterprises segment, Tax and Customs Administration, Ministry of Finance of the Netherlands
Richard has 31 years of work experience at the NTCA, where he has held several positions. He has worked as a tax auditor, electronic data processing auditor, team leader for small and medium companies and senior enforcement advisor. He has been a project manager and trainer in enforcement strategy. Richard is interested in social psychology and behavioral science.
Tor Kristian Gulbrandsen, senior advisor, Regional department, Section for methodology and development, The Norwegian Tax Administration
Tor Kristian has been working as a journalist for 25 years on Radio and TV, most of the time at the Norwegian Broadcasting Company (NRK), both as news journalist and head attendant. From 2010 to 2014 he joined the Norwegian Tax Administration (NTA) as the head of communication and guidance, while from 2014 to 2015, Tor Kristian headed the section for Methodology and development. Since 2015 he has taken the position of the senior advisor within the same section, focusing on the development of the NTA's strategies and methodology.
This learning initiative was supported by: