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Key Text Reforming Revenue Administration: Lessons from Experience

Author: S Delay, N Devas and M Hubbard
Date: 1998
Size: 72 pages (183 KB)

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Summary

This study reviews the experience of DFID-funded projects to support revenue administration in Africa against wider international experience to determine lessons for future work in this field.

The study finds that:

Political commitment is a crucial determinant in the success of tax administration projects.
Targeting resources and better planning and monitoring address a critical weakness in many civil service organisations.
Tax administration reforms require considerable management effort and cultural change to introduce successfully in a sustainable way.
Adoption of the Revenue Authority (RA) model requires consideration of issues of autonomy, accountability, the relationship between the RA and the Ministry of Finance, leadership and proper HR management policies.
There are fundamental difficulties associated with establishing a conventional contract for contracting out of revenue collection since it is not possible to fully specify in advance the appropriate level of performance.
Process rather than blueprint approaches to project design are appropriate for revenue administration projects.

In terms of policy implications, the authors write that the successful reforms promoted by DFID have tended to involve longer-term projects (of at least three years) on a fairly large scale, and suggest that focusing on these may make the best use of resources.

Selective choice of countries to focus on those that have appropriate overall governance mechanisms (in respect of expenditure planning and anti- corruption initiatives) will give tax administration a better chance.
Integrating administration projects with tax policy projects gives an opportunity to focus resources on poorer countries with beneficial impacts on the distribution of income and on funding overall government programmes aimed at the poor.
A partnership approach with a small number of countries along these lines offers an exciting future for significant advances in tax administration.

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Source: Delay, S., Devas, N. and Hubbard, M. 1999, ' Reforming Revenue Administration: Lessons from Experience', International Development Department, University of Birmingham, report prepared for DFID
Author: Nick Devas , n.devas@bham.ac.uk
International Development Department (IDD), University of Birmingham, http://www.idd.bham.ac.uk