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Joint ATAF – Korea Conference on Domestic Resource Mobilisation: Challenges to African Tax Policy and Administration – Session 6 Building Sustainable African Industries – the Challenges and Opportunities for Revenue Administrations: The Case of Mauritius Presented By: M.S.Lal, Director-General Mauritius Revenue Authority 4 April 2011 Contents 1. The Mauritian Economy 2. Policy Responses to Crisis 3. Revenue Administration in Mauritius: MRA 4. Strategic Objectives of MRA 5. Change Management at MRA 6. Opportunities and Challenges - Automation Taxpayer Education, Outreach & Feedback Service Delivery Risk Management Trade Facilitation & Border Protection Tackling Corruption The Mauritian Economy Population of 1.2 million inhabitants Upper Middle Income Country with a GDP per capita of $ US 7,240 Economic growth of 4.2% in 2010 Tax to GDP ratio of 18% Initially Agriculture based Diversified into textile & apparel, tourism and financial services New expanding sectors include fish processing, ICT, hospitality and property development Policy Responses to Crisis Expansionary budget in 2008 apprehending the crisis Additional Stimulus Package in Dec 2008 with the following tax measures: • Tourism sector - suspension of solidarity levy on hotels and environment levy on airlines & exemption from environment protection fee for nonprofitable hotels; • Construction sector – exemption from land transfer tax & registration duty for big projects, reduction in customs duty on iron bars; • Other sectors – 2 additional years of income tax exemption for freeport operators & freezing of plan to lower import duty in 2009 & 2010 Policy Responses to Crisis Economic Restructuring and Competitiveness Programme in August 2010 to support enterprises, shore up their finances and ensure their long term resilience Credit Support under two Schemes: • 50/50 Matching Grant Scheme for SMEs with turnover less than Rs 50 million • 90/10 Grant Scheme for all companies with the 90% grant by Government repayable after a moratorium of 2 years Revenue Administration in Mauritius: MRA MRA: - Was set up through an Act of Parliament – MRA Act - Has been in operation since July 2006 - Collects revenues on behalf of the Government (more than 90% of tax revenue) - Administers revenue laws (16 taxes administered which includes income tax, VAT, Customs & Excise, Gaming etc) Revenue Administration in Mauritius: MRA - Is under the overall responsibility of the Ministry of Finance - Is administered and managed by the MRA Board with a Chairperson and six members - Has a Director-General as the Chief Executive Officer who implements the policy of the Authority - Consists of 13 departments each headed by a Director Strategic Objectives of MRA The strategic objectives as laid down in the 2011-13 Corporate Plan are: Promoting Voluntary Compliance Providing Quality Services Developing People, Processes & Technology Facilitating Trade and Ensuring Border & Society Protection Strengthening Good Governance and Improving Corporate Image Change Management at MRA Performance and Efficiency New Human Resources Framework Ethics and Transparency Information Management System Opportunities and Challenges Automation Taxpayer Education, Outreach & Feedback Service Delivery Risk Management Trade Facilitation & Border Protection Tackling Corruption Automation Main Achievements - implementing Integrated Tax Administration Solution (ITAS) - introducing e-filing and e-payment of tax by individual taxpayers - initiating online registration of taxpayers engaged in business - promoting e-filing service centres for companies - facilitating electronic submission of customs & excise declarations Automation Future Challenges - ensuring e-filing and e-payment by all taxpayers - implementing Tax Portal On-line Service (TPOS) allowing online enquiry on taxpayer account - implementing Record Management System to move to a paperless organisation - developing virtual audit files - facilitating online objections to assessments raised - implementing Single Window Project for improved cargo dwell time - executing on-line tracking system at freeport Taxpayer Education, Outreach & Feedback Main Achievements - setting up dedicated Taxpayer Education & Communication Department - launching Taxpayer Mailing Service providing tax updates freely & electronically to subscribers - simplifying forms and returns - conducting Taxpayer Satisfaction Surveys Taxpayer Education, Outreach & Feedback Future Challenges - using communication websites (facebook, twitter) to encourage e-filing - introducing taxation syllabus in secondary schools - revamping MRA’s website to improve quantity and quality of information - putting in place Client Relationship Managers for specialised taxpayers - holding Stakeholders’ Forum - celebrating taxpayers’ weeks & giving rewards Service Delivery Main Achievements - issuing fast track VAT repayments within 7 days & others in 45 days - introducing cumulative PAYE to reduce number and amount of refunds - effecting income tax refunds expeditiously (7 days for electronic & 30 days for manual) - issuing Tax Residence Certificates within 1 week Service Delivery Future Challenges - conducting tax audit at taxpayers’ premises or at MRA with duly recorded proceedings - facilitating SMEs through presumptive taxes or proposing a simplified accounting system for them - reducing VAT repayment for non-fast track cases to 30 days - refunding income tax claims within 20 days - reducing average waiting time from 10 mins to 6 mins Risk Management Main Achievements - introducing parametric selection of audit cases - having recourse to non-intrusive techniques for tax audits (e.g 3rd party matching) - setting up Risk Management Unit in Customs for expeditious release of goods - finalising a Business Continuity/Disaster Recovery Plan - preparing risk registers & risk matrix for all departments Risk Management Future Challenges - embedding risk management in corporate strategy, day to day operations and management culture - setting up Risk Management Unit for income tax and VAT - preparing risk management policy document and a guidance manual - procuring & utilising advance Risk Management Software - training staff on intelligence analysis and risk management Customs: Trade Facilitation & Border Protection Main Achievements - establishing fast track clearance of goods (Blue Channel) - using non-intrusive X-ray equipment - initiating Cargo Community System - providing advanced tariff ruling expeditiously - establishing a valuation database for commonly imported goods including second hand vehicles - removing resident officers from excise stations and initiating post clearance audit Customs: Trade Facilitation & Border Protection Future Challenges - setting up Single Window Project with other agencies for faster clearance of goods - implementing door to door customs - goods move straight from customs to trader’s warehouse - introducing Authorised Economic Operator programme - extending excise stamps to spirits and beverages Tackling Corruption Main Achievements - setting up Internal Affairs and Audit Divisions to manage integrity, promote best practices & controls - carrying out pre-employment integrity checks - requiring Declaration of Assets every 3 years - promoting a transparent & open office environment - ensuring minimum physical interaction between officers & the public - abiding by the Code of Conduct & Ethics & Prevention of Malpractice Manual Tackling Corruption Future Challenges - overhauling Standard Operating Procedures to ensure that every taxpayer is treated in a fair, equitable and just manner - introducing a whistle blowing programme in MRA Act to protect and reward whistle blowers - issuing an approved Integrity Policy Statement - ensuring a policy of zero tolerence to corruption - carrying out an Integrity Perception Survey Other Challenges drafting of a Tax Administration Act to simplify - and harmonise various generic administrative provisions - expeditious resolution of disputes - expanding the network of Double Taxation Avoidance Agreements - updating SOPs and expediting the issue of practice notes and advance tax rulings THANK YOU