Title Page
INTERNATIONAL MONETARY FUND
FISCAL AFFAIRS DEPARTMENT
DEPARTMENTAL PAPER
ISORA 2018
Understanding Revenue Administration
Prepared by William Crandall, Elizabeth Gavin, and Andrew Masters
Copyright Page
Copyright© 2021 International Monetary Fund
Cataloging-in-Publication
Data IMF Library
Names: Crandall, William Joseph, author. | Gavin, Elizabeth, author. | Masters, Andrew (Andrew Robert Lovell), author. | International Monetary Fund, publisher.
Title: ISORA 2018 : understanding revenue administration / prepared by William Crandall, Elizabeth Gavin, and Andrew Masters.
Other titles: International Survey on Revenue Administration. | International Monetary Fund. Fiscal Affairs Department (Series)
Description: Washington, DC : International Monetary Fund, 2021. | 2021 October. | Departmental paper series. | At head of title: Fiscal Affairs Department. | Includes bibliographical references.
Identifiers: ISBN 9781513592930 (paper)
Subjects: LCSH: Revenue management. | Tax administration and procedure.
Classification: LCC HD60.7 .C736 2021
The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Contents
Executive SummaryAcronyms and Abbreviations
Acknowledgments
1. ISORA 2018—General Overview
A. Introduction
B. Purpose of ISORA
C. Restrictions on the Use of ISORA Data
D. Publications Using ISORA Data
E. Changes and Improvements to ISORA from 2020 Onward
2. Analysis of ISORA 2018 Data
A. Participant Metrics and Overall Analytical Approach
B. Performance-Related Data
C. Profile Date
D. Practices and Structural Foundations for Effective Tax Administration
Annex 1. ISORA 2018 Participation
Annex 2. ISORA 2018 Data Set Topics Not Discussed in this Publication
Annex 3. Composition of Indices
References
BOXES
1. Publications Using ISORA Data
2. The Addis Tax Initiative and ISORA
3. Gender in Tax Administration
4. Digging Deeper into the Difference Between LTO Collections in 2015 and 2017
FIGURES
1. ISORA: Data Point Requirements
2. Geographic Distribution of ISORA 2016 and 2018 Participants
3. ISORA 2016 and 2018 Response Rates Related to Resources and Planning Volumes
4. ISORA 2016 and 2018 Response Rates Related to Performance and Outputs
5. Ratio of Median Core Taxpayers to FTE: Participation Patterns for 2015 and 2017
6. Location of Data Appendix to this Publication on the ISORA Portal
7. Median On-Time Filing Rates for Main Tax Types, 2015 and 2017
8. Median On-time Filing Rates for CIT for the Period 2011 to 2017
9. Median On-Time Payment Rate by Value, 2015 and 2017
10. Number of Responses by On-Line Filing Rate for VAT, PIT, and CIT, 2015 and 2017
11. Average Percentage of Returns Filed Electronically by Tax Type, 2015 vs. 2017
12. Median Tax Arrears at Year-End as a Percentage of Total Net Tax Collected, 2015 and 201713. Relationship Between Arrears Reported in 2015 and 2017 by Standard Grouping
14. Median Assessments Raised through Verification Activity
15. Verification Activity per 100 Active Taxpayers
16. VAT Audits per 100 Active VAT Taxpayers, 2015 and 2017
17. Median Adjustment Rate of Verification Activities by Tax Type
18. Adjustment Rate of VAT Verification Activity
19. Scatter Plot Showing Cost of Collection in 2017 Against Cost of Collection in 2015
20. Median Cost of Collection by IMF Region
21. Active Core Taxpayers; and Citizens per FTE, 2014 to 2017
22. Institutional Arrangements for Standard Groupings, 2017
23. Institutional Arrangements Including Nature of Management Board, 2017
24. Percentage Collecting and Contribution to Total Net Revenue of the Four Revenue Categories, by Standard Grouping, 2017
25. Types of Other Taxes Collected, 2017
26. Participants with Specific Non-Tax Roles, 2017
27. Full-Time Equivaluent by Function, 2017
28. Average Percent of FTE by Function by Standard Grouping, 2017
29. Comparison of FTE by Function, 2015 vs 2017
30. Staff by Age Group, 2017
31. Staff Age Distribution by Standard Grouping, 2017
32. Service Profile of Tax Administration Staff, 2017
33. Service Profile of Tax Administration Staff by Standard Grouping, 2017
34. Female Staff and Executives, 2015 and 2017
35. Percentage Female Staff and Executives in Tax Revenue Administrations, Joint Tax and Customs Adminstrations, and Customs Administrations, 2017
36. Percentage Female Staff and Executives in Tax Administrations, Joint Tax and Customs Administrations, and Customs Administrations by Standard Grouping, 2017
37. Administrations with LTO/P, HNWI, and Small Taxpayer Regimes, 2015 vs. 2017
38. Median Percentage of Revenue Collected and of Active Corporate Taxpayers in LTO/P, 2015 and 2017
39. Taxpayer Selection Criteria for LTO/P, 2017
40. Range of Functions within LTO/Ps, 2015 and 2017
41. Criteria Used to Define HNWIs, 2017
42. Functions Performed by HNWI Unit, 2017
43. Incidence of Small Taxpayer Regimes, 2017
44. Median Ratio of Active to Total Registrants by Tax Type, 2015 vs. 2017
45. Active Taxpayers as a Percentage of Citizens, 2015 vs. 2017
46. Formal Approaches to Compliance Risk, 2017
47. High Priority Compliance Approaches, 2017
48. High Priority Focus Areas, 2017
49. Tax Gap Estimates Conducted by Tax Type, 2017
50. Average Scores for Indices Related to Practices and Institutional Foundations, 2017
51. Histograms of Scores for Indices Related to Practices and Institutional Foundations, 2017
52. Scores for Indices Related to Practices and Institutional Foundations, 2017, by Agency Type
53. Scores for Indices Related to Practices and Institutional Foundations, 2017, by IMF Region
54. Scores for Indices Related to Practices and Institutional Foundations, 2017, by Fragile and Non-Fragile Respondents
TABLES
1. ISORA Survey Rounds and Fiscal Years Covered
2. Number of Survey Participants by Income Group and IMF Region
3. Distribution of Number of Participants in Both ISORA 2016 and 2018 by Income Group and IMF Region
4. ISORA 2018 Survey Participants by Population Size
5. Fragile State Participation in ISORA 2018
6. Grouping of ISORA Subject Matter Areas
7. Number of Survey Participants by IMF Region and Standard Grouping
8. Median Percentage Point Difference in Filing Rates, 2015 vs. 2017
9. Average Percentage of Electronic Payments by Number of Payments
10. Average Percentage of Electronic Payments by Value, 2017
11. Responses to Audit Type Questions 2015 vs. 2017
12. Disputes: Growth Rates Between 2016 and 2017
13. Median Cost of Collection 2015 and 2017
14. Illustrative Example of Indicators for 2017
15. Institutional Arrangements Matrix, 2017
16. Management Board Size by Type, 2017
17. Average Number of Non-Tax Roles and Other Taxes Collected, 2017
18. Correlations Between the Institutional Foundations and Practices Indices
19. Correlations Between the Practices Indices and Performance Measures
Executive Summary
Background
This publication presents the results of the International Survey on Revenue Administration (ISORA) 2018, encompassing responses from 159 national or federal tax administrations spanning profile information, performance, and practices in fiscal years 2018 and 2019. ISORA is the product of an international arrangement among four parties: the Inter-American Center of Tax Administrations, the IMF, the Intra-European Organisation of Tax Administrations, and the Organisation for Economic Co-operation and Development. The Asian Development Bank partnered with these parties in supporting participants in ISORA 2018.
ISORA data have been used in reports on tax administration prepared by the ISORA partners. As the most comprehensive source of standardized data on tax administration, ISORA data are increasingly being used in research and capacity development.
A major review of ISORA following the 2018 round recognized that, despite the value of the existing information to both the international partners and participating tax administrations, data quality could be further improved. In the future, the survey will comprise a far smaller set of annual questions for which data will be collected annually rather than biennially, together with periodic questions, and all survey data will be placed in the public domain. ISORA 2020 data, covering the 2018 and 2019 fiscal years, is planned to be released publicly toward the end of 2021.
Overall Analytical Approach
Following the shape of the previous publication Understanding Tax Administration – International Survey on Revenue Administration 2016, subject areas covered are grouped into three main components: (1) performance-related data, (2) profile data, and (3) practices and structural foundations for effective tax administration. Most analysis is again presented by grouping the 159 tax administrations as Small States (39 jurisdictions with a population of less than 1.5 million people; Lower-Income jurisdictions (51), and Higher-Income jurisdictions (69).
Comparisons of ISORA 2018 results against ISORA 2016 results are made, but the interpretation of changes in statistics based on numerical survey questions is complex, as different sets of administrations contributed data on particular subjects in the two rounds.
Key Points from Performance-Related Data
Most statistics on performance measures show an improvement between ISORA 2016 and ISORA 2018. For most performance measures, more data points are available for ISORA 2018.
As found in analysis of ISORA 2016 data, Small-State and Lower-Income jurisdictions generally lag behind Higher-Income participants.
Lower-Income administrations generally show greater volatility in reported performance measures than Higher-Income administrations.
Key Points from Profile Data
Slightly less than half the participating administrations (74 of 159) self-identified as semi-autonomous organizations.
About 37 percent of participants (59 of 159) are responsible for both tax administration and customs administration.
Participants reported the following average allocations of staff by function: front office functions (registration, service, returns, and payment processing)—30 percent; back office functions (audit, verification, and enforced debt collection)— 38 percent; disputes and appeals—3 percent; and other functions—29 percent. Despite changes to the function categories between the 2016 and 2018 rounds, these percentages have changed very little.Overall, female staff make up 52 percent of tax administration employees, but only 43 percent of executives. The average proportion of female staff in Lower-Income jurisdictions is lower at 38 percent. Female staff make up a smaller proportion of staff in joint tax and customs administrations (49 percent). The two regions with the highest proportions of women tax administrators and tax administration executives are Europe and the Western Hemisphere (Americas and the Caribbean).
More than 85 percent of administrations reported a dedicated large taxpayer office/program, unchanged from the ISORA 2016 result. However, the median percentage of net revenue administered through the large taxpayer office/program showed a dramatic increase between 2015 and 2017 from 45 percent to 57 percent, largely due to changes reported by Small States and Lower-Income jurisdictions. It appears that much of this change may be due to permitting administrations to provide an estimate of this percentage rather than providing the underlying data.
There has been an increase overall in the proportion of administrations reporting the existence of a dedicated unit for High Net Wealth Individuals, from 19 percent in 2015 to 23 percent in 2017, despite a decline in the proportion of Small States reporting such a unit (13 percent in 2015, versus 10 percent in 2017).
Key Points from the Analysis of Practices and Structural Foundations for Effective Tax Administration
Seven indices were compiled from ISORA questions that cover practices (both administrative and operational) and structural foundations (laws, regulations, and policies) that underpin these practices, namely: Management and Human Resources Autonomy; Public Accountability; General Management; Human Resources Management; Service Orientation; Compliance Risk Management Foundations; and the Degree of Digitalization.
Scores against these seven indices are positively correlated, reflecting that good practice or structure in one facet of tax administrations is often associated with good practice in other facets.
The correlation observed in previous analysis (ISORA 2016) between Public Accountability and Service Orientation remains high. In addition, Service Orientation is also relatively strongly associated with Human Resource Management and Degree of Digitalization. Compliance Risk Management Foundations and Degree of Digitalization are also found to be relatively strongly correlated.
For all indices, the responses from Higher-Income jurisdictions lead to average higher scores. Lower-Income jurisdictions show higher scores on average than Small States, except in the case of Degree of Digitalization, where they are the same.
The Autonomy, General Management and Human Resource Management indices show the least dispersion in scores, with close to 60 percent of all administrations scoring over 80 (on a scale from zero to 100).
Administrations that self-identify as semi-autonomous score higher on average against all seven indices than administrations that do not.
Broken down by IMF region, administrations in Europe generally score highest against the seven indices. Regional differences in average scores are mostly smaller than by standard grouping (Small States, Lower-Income jurisdictions, Higher-Income jurisdictions).
Acronyms and Abbreviations
| ADB | Asian Development Bank |
| ATI | Addis Tax Initiative |
| CIAT | Inter-American Center of Tax Administrations |
| CIT | Corporate Income Tax |
| FAD | Fiscal Affairs Department (of the IMF) |
| FTE | Full-time Equivalent |
| HIC | High-income Country |
| HNWI | High Net Wealth Individual |
| HR | Human Resources |
| IMF | International Monetary Fund |
| IOTA | Intra-European Organisation of Tax Administrations |
| ISOCA | International Survey on Customs Administration |
| ISORA | International Survey on Revenue Administration |
| LIC | Low-Income Country |
| LMIC | Lower-Middle-Income Country |
| LTO/P | Large Taxpayer Office/Program |
| OECD | Organisation for Economic Co-operation and Development |
| PAYE | Pay-As-You-Earn |
| PIT | Personal Income Tax |
| SSC | Social Security Contributions |
| RA-FIT | Revenue Administration Fiscal Information Tool |
| TADAT | Tax Administration Diagnostic Assessment Tool |
| UMIC | Upper-Middle-Income Country |
| VAT | Value-Added Tax |
Acknowledgments
This departmental paper presents the results of the International Survey on Revenue Administration (ISORA) deployed during 2018 and covering fiscal years 2016 and 2017. It is made possible by the participation of 159 tax administrations from around the world that provided data. This survey round (the data collection aspect) was a joint venture with the Asian Development Bank, the Inter-American Center of Tax Administrations, the Intra-European Organisation of Tax Administrations, and the Organisation for Economic Co-operation and Development. This departmental paper was authored by a team of staff and external experts from the IMF Fiscal Affairs Department (FAD) led by Andrew Masters and including William Crandall (external expert), Elizabeth Gavin, and Kwesi Arhin (who provided excellent research assistance). The paper benefited from review by Katherine Baer and Mick Thackray also within FAD. Staff in the revenue administration divisions of FAD and in the IMF Regional Capacity Development Centers were most helpful in assisting with the conduct of the survey.
The authors’ views as expressed in this paper do not necessarily reflect the views of the IMF, its Executive Board, or IMF management. Errors and omissions are the authors’ sole responsibility. It should be noted that summary or aggregated information presented in this paper is derived from data that are self-reported by participants, and as such may be subject to review and change without prior notice.
Funding for the Revenue Administration Fiscal Information Tool/ISORA is provided both internally by the IMF and by the Revenue Mobilization Thematic Fund, formerly the Tax Policy and Administration Topical Trust Fund; both sources are gratefully acknowledged. Donor governments and organizations contributing to the Revenue Mobilization Thematic Fund are the Africa, Caribbean, and Pacific Group of States; Belgium; the European Union; Germany; Republic of Korea; Kuwait; Luxembourg; the Netherlands; Norway; and Switzerland.
Further documentation, data, and information are available online through the Revenue Administration Fiscal Information Tool Data Portal at http://data.rafit.org.
Most of the data used in this departmental paper have been sourced from the ISORA 2018 database, together with the ISORA 2016 database providing data for earlier fiscal years (2014 and 2015). Accordingly, where this is the case, no attribution is made in either figures or tables. Where data have been obtained elsewhere, the source is appropriately attributed.