A diagnostic framework for revenue administration

The World Bank has long been engaged in supporting modernization of tax and customs administration in a number of countries. A review of the Bank’s operations in the area in the 1990s, indicates that their main thrust has been reforms in tax policy and tax laws; streamlining of basic technical processes, such as taxpayer registration, processing of returns and payments, tax audit and border operations; computerization; reorganization of tax departments on functional line; creation of Large Taxpayers Units; and technical training. Relatively less attention has been paid to other important elements of the revenue administration system, namely, the array of environmental factors that impinge on the Revenue Administration; the effect of the history of the RA on its current and future functioning; organizational strategy; organization and management functions; and informal culture. As a result, many of the past operations may have failed to fully uncover the underlying causes of institutional and organizational dysfunction, leading to partial solutions and sub-optimal outcomes.