Title Page
TECHNICAL NOTES AND MANUALS
Integrating the Collection of Social
Insurance Contributions and Personal Income Taxes
Prepared by Tony Orhnial
This technical note addresses the following questions:
What are the main ways in which different countries assess and collect personal income tax (PIT) and social insurance contributions (SIC) liabilities (Section I)?
What is the case for transferring responsibility for a country’s SIC collection from its social insurance agency(ies) to its tax authority (Section II)?
What changes does such integration of collection functions involve (Section III)?
Are there any lessons from international experience to guide such reforms (Section IV)?
How to build on these lessons when planning a transfer of collection functions (Section V)?
Are there any beneficial alternatives to full integration of functions (Section VI)?
Copyright Page
Copyright ©2021 International Monetary Fund
Fiscal Affairs Department
Integrating the Collection of Social Insurance Contributions and Personal Income Taxes Prepared by Tony Orhnial1
Authorized for distribution by Michael Keen2
DISCLAIMER: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
JEL Classification Numbers: H2, H24, H26, H27, H83
Keywords: Tax administration, Personal Income Tax, Social Security
Author's E-Mail Address: tony.orhnial@yahoo.co.uk
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Contents
I. SIC and PIT Collection Models
II. The Case for Full Integration of Collection Functions
III. The Transition to an Integrated System: What's Involved?
IV. Lessons from International Experience
V. Implementing the Transition
VI. Alternatives to Full Integration
References
Boxes
1. Scope of Project Team Briefs
Figures
1. Staged Implementation
2. The Governance Pyramid
Tables
1. Exampes of Different Collection Models
Acronyms
| ID | identification |
| ISORA | International Survey on Revenue Administration |
| IT | information technology |
| NICs | national insurance contributions (the name given to SICs in the UK) |
| OECD | Organisation for Economic Co-operation and Development |
| PIT | personal income tax |
| SIA | social insurance agency |
| SIC | social insurance contributions |
| TA | tax administration |
| UK | United Kingdom |
Tony Orhnial is a member of the Fiscal Affairs Department’s roster of fiscal experts.
This note has benefitted from information and comments kindly provided by Debra Adams, Katherine Baer, Patrick De Mets, Liz Gavin, Michael Keen, Aksel Sorensen, and Rebecca Sparkman (all IMF), and Oleksiy Sluchynskyy (World Bank). I am particularly grateful to John Brondolo (IMF) for his generous guidance and advice at every stage in its development.