I am deeply honoured to have been asked to present a paper to this august gathering. I am very happy to be among old friends and to make new ones. I wish to convey my heartfelt gratitude for all the kindnesses you have shown me over the years of my association with COTA.

I have noted that other papers presented in this conference deal with Human Resource Management, Matching Resources with Results, Linkages with other organizations, Protection of the Revenues, Correction of Unethical Practices and Matching Technological progress with HR developments. These topics are crucial to the process of maximizing performance and I will not dwell on them here, as I am certain that they were adequately addressed during the course of the week.

The topic, Managing Resources for Optimum Performance in Taxation is an important one for us in small developing countries where resources are extremely limited and we have to meet the same challenges as the larger more developed countries who have more resources at their disposal. Consequently, the Heads of the various Caribbean Tax Administrations, whom I shall refer to in this paper as Commissioners, must be knowledgeable in several specialist areas. As globalization becomes a more dominant feature in the economy, the pressure becomes greater on the Commissioner to have a wider knowledge base.

Competencies

The Commissioner has to master several disciplines to enable him to manage his resources to achieve optimum performance. The role of the Commissioner is somewhat akin to the god Janus who looks backwards at the year past and forward at the future.

In the case of the Commissioner he has broadly two roles. One is to manage the taxes and by extension the organization. The other is to represent the organization at meetings with Ministry of Finance and other government agencies, public forum and international conferences. In both roles he must display a level of competence in the subject matter discussed.

He or she has to be a good leader/manager/administrator. The commissioner must have a sound knowledge of the law, accounting, auditing, good human resource management skills, good inter-personal relationship skills, good communication skills, some knowledge of information technology and latest developments in the field.

Where the commissioner is consulted when policy decisions are taken, he must also have knowledge of the economic environment and the social impact of the taxes imposed or to be imposed. Where the economy is dominated by a single industry for example the Petroleum Sector in Trinidad and Tobago or the Tourism Sector in some of the other countries, the Commissioner should have more than a working knowledge of the relevant industry.

The question is: Can one person's knowledge extend to embrace all these disciplines? Where the Commissioner has moved up the ranks he would have accumulated a considerable amount of expertise along the way. However, even if this is possible, how much time out of a 40 hr./ 50 hr. /60 hr. week would be available to the different aspects of the job.

The classic answer is the delegation of functions as far as feasible.

Unfortunately, in small countries, as exist in the Caribbean, the size of the Tax Administration does not cater for delegation of the Commissioner's managerial responsibility. If it does occur at all, it is at the expense of technical resources. The first impediment to achieving optimum performance is that there is not enough staff at management level to manage the organization.

Generally, officers move up the ranks on the basis of seniority unless some stellar performance has been displayed by the junior officer to bring focus and attention on him. Normally, an officer would be promoted into management level without proper induction and training. Sorely needed in the case of Trinidad and Tobago is a training program which would provide the necessary formal training for Senior Tax Administrators coupled with a period of on the job training based on proven methods for evaluation of performance. Graduates from this program can form the core of the Commissioner's Secretariat. Trinidad and Tobago is proposing to solve this problem by establishing a Human Resources Unit which will report directly to the Chairman of the Board.

The Assistant Commissioners should not be given tasks which take them away from the core functions unless it is an activity which forms part of their development training for upward mobility. If this is not strictly observed a considerable amount of wastage will occur. If he has to attend a meeting he cannot be at his desk. If he is not at his desk he cannot deal with calls from taxpayers or tax practitioners thus delaying outcome or finalization of issues. He is not available to assist staff or to deal with issues immediately. If it affects a taxpayer, the taxpayer would have to return a next time. Since the TA is a service oriented organization we need to provide the wherewithal for the deliverance of the best service possible. Also the less distraction an Assistant Commissioner has, the greater the chances of him and his sections achieving the targets set for his branch of the operations. Since he will have more time to spend on actual management of the unit, this will also contribute to the earlier detection of delays or non-performance within the units under his control and the consequent earlier corrective action being taken.

Where the Assistant Commissioner attends too many meetings not relating to his core responsibility, commitments arising out of the meetings suffer because on his return to his desk, a stack of matters confront him requiring urgent attention and he is in a dilemma in determining which to do first.

The creation of a secretariat for the Commissioner is absolutely necessary if the TA is to deliver optimum performance. Many activities cut across operational lines. For example, a change in the law would require

(1)      a public relations campaign to sensitize the public

(2)      changes to the internal procedures

(3)      changes to the IT processes and programs

(4)      changes to the tax return form and,

(5)      a change to the payment form - if it is a new tax type.

If the printing is done by a centralized government agency constant follow-up with that agency would be compulsory since the Tax Administration's work would be competing for resources with other government priorities.

Let us assume that we have entered this utopian world where the Commissioner has all the required knowledge and a core of competent staff in his secretariat, whose responsibility would be to assist him in managing the organization then. There are several tools which he can employ to help him manage for optimum results.

The Strategic Plan

The Strategic Plan is an important tool. The preparation of the plan is a very involved exercise but it is worth the effort. It highlights the strengths, weaknesses opportunities and threats to the organization. The paths taken in identifying these attributes reveal a lot about the organization. It forces the organization to create a vision, clearly state its goals and its core values. The communication of the vision and the goals throughout the TA brings a certain unity of purpose to the organization.

It specifies the initiatives which are to be taken to achieve the goals and the time frames for each initiative. It provides the background against which performance can be measured. The document is a useful tool in supporting request for funding. IT provides a road map for transformation.

The strategic goals are broken down into Strategic objectives. The Strategic Initiatives are specific programs, projects or activities that will advance each objective or goal. Work plans identify the tasks involved in implementing an initiative.

Officers in the organization would be assigned responsibility for specific action items in the work plan. Each initiative would have a performance indicator and an expected outcome and a target date.

Matching the results with the expected outcome and the performance indicator would reflect the performance of the officer responsible for implementation.

The greater the success in implementation the closer the Tax Administration would be in achieving maximum use of its resources. Ultimately, the implementation of a Strategic Plan will result in improved customer service and employee satisfaction, increased productivity and voluntary compliance.

A publication which was used by the Tax Administration in Trinidad and Tobago in developing its strategic plan is the World Bank Technical Paper No. 472 entitled "A Diagnostic Framework for Revenue Administration" by Jit B.S. Gill. Chapter 3 provides a good base for the environmental scan.

Chapter 1 deals with the Indicators of the Scale of operations, Indicators of Effectiveness and Indicators of Efficiency each broken down into Qualitative and Quantitative Indicators. The paper is available on line at: http://www.worldbank.org/publicsector/toolkits.htm.

These indicators will provide a snapshot of the organization at a particular time and if an assessment is done periodically will tell whether the organization is doing better or worse over time. Functional Systems and Procedures

Optimum performance cannot be obtained without the creation of and adherence to systems and procedures and desk manuals. Maintenance and upgrading of these documents to ensure relevance to the changing environment must take place otherwise there would be justification for them to fall into disuse. There must also be constant monitoring by the Internal Audit Unit to ensure compliance. Non compliance should be the subject of disciplinary action depending on the seriousness of the breach..

Physical Resources and Facilities

The Tax Administration must be given a comfortable environment and adequate facilities in order to do its job properly. The work flow must be so designed that time is not wasted in movement of documents from one process to another. In addition there must also be a planned program for maintenance of facilities and periodic review to anticipate future needs - some items may take a long time to bring on board and there would need to be a provision of funds in the Budget to accommodate the item.

Matching Fiscal Policy with Administrative Capacity

In determining fiscal policy Government is more concerned with the social impact or increasing revenues. It seldom concerns itself with the administrative capacity of the Tax Administration to implement the policy. However governments should pay more attention to this. Deficiency in administrative capacity can circumvent government's policy. In addition the new policy may require a shift in resources and this may not result in the optimum use of the resource.

Legal Environment

The law and the legal environment plays a great role in determining whether optimum use is made of the resources. Any provision in the law which is subject to different interpretations can create ambiguity in administration. The auditors will hold one view and when the matters are under appeal, the lawyers another. Efforts should be made when drafting the law for the lawyers from the Tax division to be present. Trinidad and Tobago is proposing to set up a policy unit to provide guidelines and rulings to the public on tax issues.

Another area where inefficient use of resource occurs is in the Magistrate Courts. In the current environment where crimes against persons are so rampant, tax matters take a back seat. Although the law is replete with provisions for prosecution and fines they are not invoked frequently enough to make a meaningful difference. Efforts are being made to correct this by a separate Tax Court.

A third area of inefficient use of resources arises out of the bench mark used by auditors for disallowing claims and that used by the Tax Appeal Board. The officers will not allow a claim unless evidence is provided. However, the same claim could be allowed by the Tax Appeal Board on the balance of probabilities.

Human Resource Management

I know that previous papers have dealt with Human Resource Management but I would like to direct your attention to an article in the ACCA journal "Accounting and Business" May 2004 Issue.

The article is entitled "Measuring the value of human resources". Whilst the article deals with reporting on Human Capital for financial reporting purposes it provides useful information on some of the measures which can be used in evaluation human resource. I was impressed by the wide range of them and I hope you will be too. Copies of the article are available for persons who do not have access to the journal.

Efforts by Trinidad and Tobago to maximize the use of its resources

After the launch of the VAT in 1990, a reform of the Income Tax/Corporation Tax System was identified as necessary. However, despite representations by the Board on several occasions nothing materialized.

In 1992, the I.M.F. was invited by the Government of Trinidad and Tobago to review the VAT System and identify reasons for the declining revenues. The majority of the recommendations were implemented.

In 1996 the I.M.F. was again invited to review the operations of the Division and produced a report with wide ranging recommendations.

Although the I.M.F. visited twice per year and requested updates on the recommendations, the Ministry of Finance still did not provide resources to reform the Division. It was not until 1998 when widespread concern for the Y2K problem was being expressed internationally that the Board of Inland Revenue got the approval and funds to rewrite the VAT system (VATIS) and migrate the data to a new hardware. (The original hardware was over 10 years old and had become very unreliable).

Subsequently in 1999, a contract was signed with the Internal Revenue Services to assist the Board of Inland in the reform. Some of the initiatives that have been completed or close to completion to date are as follows:-

1.      Integration of the Field Collections Unit for Income Tax/Corporation Tax, VAT and PAYE.

2.      Computerization of the PAYE records - still ongoing

3.      Establishment of a Large Case Unit.

4.      Establishment of a computerized remittance system

5.      Reengineering of the Returns Processing System

6.      Enhancement of the Internal Audit Unit

7.      Launch of the Website www.ird.gov.tt

8.      Development of a Human Resources Unit

9.      Establishment of an Open Case Data Base

10.     Computerization of Third Party Data Base

11.     Establishment of a Criminal Investigation Unit

12.     Establishment of an Inspection Unit

13.     Merger of File Number Registration for VAT, Income/Corporation Tax and PAYE

14.     Reintroduction of Taxpayer Education Programme in schools

15.     Development of a data base with respect to approval for deferred annuities and Lands and Building Taxes.

16.     Issuance of the Request for Proposal for the Integrated Tax Processing System based on the evaluation of the responses to the Request for Information issued earlier.

The Division has completed the Draft Strategic Plan for 2004-2008 and it is awaiting approval. This plan addresses a whole new set of initiatives, the strategic goals being:-

1.      Improved Quality Service to Customers

2.      Increased Employees' Satisfaction, Productivity and the establishment of a Quality Working Environment

3.      Maximum Voluntary Compliance

4.      Re-engineered Business Processes to increase productivity and efficiency.

5.      Improved Tax Administration Information Technology Capability.

The last major reform of the Tax Administration was in the late sixties. Now that we have started again the sleeping giant has awoken. I hope he will not rest until we have achieved the Prime Minister's 2020 Vision.

Thank you.