This technical note addresses the following questions:
1. Why is the choice of an organizational model so important?
2. What is a function-based organization?
3. What are the key components of a function-based organization?
4. What are the main advantages of a function-based organization?
5. How does the function-based organization work?
6. How is management direction given in the function-based organization?
The organization structure of the tax administration is a key component of an effective reform and modernization program. Of the many possible options, the function-based organization is viewed as best suited to support a reform and modernization program. This note describes the model and its components and discusses the management challenges in dealing with this kind of structure.
Note: Maureen Kidd was a Director General of the former Canada Customs and Revenue Agency and is a member of the IMF’s Fiscal Affairs Department roster of experts.
Depending on the size of the organization and the geography of the jurisdiction, the heads of individual field units may all report to the head of the tax administration, or may report through a senior manager at head office or through district or regional managers who in turn report to head office.
In a larger administration, each function would be headed by a senior manager. In some smaller administrations, several functions may be managed by a single HQ manager, given the challenges of scale.
OECD: Tax Administration in OECD and selected non-OECD countries. Comparative Information Series (2008).