Transcript Auditing SMEs

Organisation for Economic Co-operation and Development
RISK MANAGEMENT AND TAXPAYER
SERVICE
15. Organization and Management of Taxpayer Service,
Market Segmentation, Channel Strategies,the Use of
ModernTechnology, and
Communication Strategies
Kampala,17 – 21 May 2010
Centre for Tax Policy and Administration
Organisation for Economic Co-operation and Development
INTRODUCTION
Centre for Tax Policy and Administration
Effective and efficient Taxpayer Service programs
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An effective and efficient program of taxpayer service
activities is a critical objective of all Tax Administrations.
Tax Administrations rely substantially on taxpayers’
voluntary compliance to achieve the outcomes expected
of them.
To achieve high levels of voluntary compliance,
taxpayers must have a good standard of services to:
 help them determine their obligations under the laws
 to complete the steps required to acquit those obligations
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Methods or channels for delivering services
Tax Administrations have a variety of methods
for delivering services. These include:
• Physical sites
• Phone inquiry services
• Written correspondence using postal services
• Electronic services
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The need for a systematic approach
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Tax Administrations require a systematic approach or
strategy for arriving at an optimal mix of channels for
service delivery
The objective is high standards of effectiveness and
efficiency, both from the viewpoint of the Tax
Administration and taxpayers at large.
Organisation for Economic Co-operation and Development
GUIDING PRINCIPLES
Centre for Tax Policy and Administration
1) Develop a channel strategy to improve service
delivery and compliance
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Develop a clear understanding of what you want to
achieve with your channel strategy
Consider channel strategy development in the context of
broader organisational strategies and objectives
Set clear goals for channel strategy development
Channel Strategy Visions - examples
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A directive and differentiated approach that clearly guides
customers to the most appropriate channel that meets both
the needs of the customer and the organisation and
achieves compliance at the lowest cost
Her Majesty’s Revenue and Customs (UK)
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Provide timely, accurate, courteous, and understandable
responses to questions and inquires regardless of how they
reach us
North Carolina Department of Revenue
2) Move towards a holistic channel approach
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Understand the nature of your services and channels
Move towards an integrated channel approach,
including governance
Define clearly the roles and responsibilities of each
channel by customer group and product
Join-up and share services across public bodies where
that is sensible
3) Put the customer in the centre
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Understand your customers
Use customer segmentation models to add value and
support migration to alternative channels that better
meet customer needs
Conduct customer surveys and analyses in proactive
way to improve customer service
4) Raise channel cost awareness
 Produce overview of relevant costs
• Cost of channels
• Cost for customers
 Undertake cost analysis
 Establish a cost accounting system
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5) Establish sound implementation and
evaluation systems for the channel strategies
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Shift channel usage through take-up and migration
strategies
Develop momentum for change within the organization
Measure changes in voluntary compliance and costs
due to channel changes
Produce reliable management information for a range of
metrics covering each channel
Organisation for Economic Co-operation and Development
CHANNEL STRATEGY
DEVELOPMENT
Centre for Tax Policy and Administration
Channel strategy
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A channel strategy affects organisational dimensions
including the technical and physical infrastructure,
services content, administrative processes and culture.
Stakeholders often have a view on what the channel
strategies should be
How does a Tax Administration deal with conflicting or
differing interests?
Important considerations
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What will be influenced by the channel strategy?
• Marketing strategy
• IT strategy
• Business strategy
Recommendation:
See channel strategy as a means of achieving strategic
goals!
Elements influencing the channel strategy
Users
Strategic
decisions
Tax
administration
Environment
Government
An optimal channel mix
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Make the channels known to the users
Create hierarchy of channel preferences
Web
Phone
Web
Phone
Web
Paper
Paper
Email
Phone
Face to Face
Paper
Email
Email not an option
Face to Face
Face to Face
Transactions
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Interactions
Information
Channel strategy is a tool for:
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Increasing taxpayers’ compliance
Promoting cost efficiency and user friendliness
Increase cooperation with other government bodies
Provide customer relationship management (CRM)
Customer Relationship Management
An efficient Customer Relationship Management (CRM)
system should at least be able to:
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Identify factors important to clients.
Promote a customer-oriented philosophy
Adopt customer-based measures
Develop end-to-end processes to serve customers
Provide successful customer support
Handle customer complaints
Characteristics of a CRM
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Instant viewing – no paper anymore.
Full contact history
Accountability
Management
Statistics
Archiving
Service categories
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Information:
One way communication that doesn’t result in change to
account status.
Interaction:
Two-way communication that doesn’t result in change to
account status.
Transaction:
Activity or service that result in a change in account
status or account information.
Holistic approach
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The goal for multi-channel service delivery is to provide
a consistent view of the customer
Electronic channels are playing an increasingly
important role in a multi-channel service.
The challenge is to attain the right channel mix, based
on a balance between user preferences and channel
costs.
Organisation for Economic Co-operation and Development
THE CUSTOMER IN THE CENTRE
Centre for Tax Policy and Administration
Users needs
 Effective channels that meet user requirements
and give them increased access to high value
added services. Examples are:
• Choice of channels available
• The security and confidence associated with the
channel
• Cost of using the channel
• How accessible and effective the channel is
• The inclusiveness of the channel
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A good segmentation approach has the following
characteristics:
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It will categorise customers into mutually exclusive and
statistically valid groupings
Within each grouping, customers are likely to have
similar responses to services and treatments
Between different groupings, customers will have
significantly different needs and responses to our
services and treatments
The same segmentation is not necessarily of relevance
for all services.
Example: User segmentation
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In Norway an analysis of users conducted in connection
with a channel cost analysis project showed that it was
useful to divide users into segments in order to achieve
a better understanding of their use of channels,
preferences, value drivers, attitudes, and barriers.
Example: User segmentation
The Norwegian tax agency found that the most suitable way to segment
wage earners and pensioners was by educational level and age. The
following segments were identified:
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Young and middle-aged (under age 60) with a high level of
education (more than three years of college)
Young and middle-aged (under age 60) with an average level of
education (one to three years of college)
Young and middle-aged (under age 60) with a low level of
education
Elderly over age 60
Example: User segmentation
They also found that the most suitable way to segment business users was
by size, organizational structure and use of third parties (accountants and
auditors). The following segments were identified:
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Micro-enterprises with fewer than five employees who are in
contact with the revenue body
Medium-sized enterprises with 5-99 employees who are in contact
with the revenue body
Large enterprises with over 100 employees and public limited
companies who are in contact with the revenue body
Auditors and accounting firms who represent enterprises without
their own accounting functions.
Organisation for Economic Co-operation and Development
INCREASED AWARENESS OF COSTS
Centre for Tax Policy and Administration
Cost awareness – key points
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The volume in high cost channels will not automatically
go down as a result of the introduction of a new
channel.
There are three main initiatives that can reduce cost:
• Reduce user contacts in costly channels
• Use migration initiatives
• Improve internal efficiency
Tax Administrations would try to serve users in the most
cost efficient channels.
Increased contact volumes
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Many Tax Administrations face increased contact
volumes in total.
Some experience considerably reduced contacts for
instance in the face-to-face channels but an increase in
other channels which in total bypass the reductions.
There seems to be a much lower threshold for
contacting a public agency than before
New channels makes it easier to get in touch.
Reducing contact volumes
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The Tax Administrations want to bring the volumes down.
Many Tax Administrations ask themselves how they can
avoid or prevent contact in the first place.
Many contacts are a result of taxpayers unintentionally
making mistakes
Find out how these mistakes can be avoided, mainly by
provision of better information and making things easier.
Organisation for Economic Co-operation and Development
IMPLEMENTATION AND EVALUATION
OF CHANNEL STRATEGIES
Centre for Tax Policy and Administration
Implementation and Evaluation of Channel
Strategies – Key Points
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Use incentives.
Campaigns to persuade the customer to choose the
electronic channels for filing.
New channels will change the way tax staff interact with
customers. This may cause uncertainty and resistance
to change.
Introduce a measurement system that provides
information on the efficiency of the channel strategy.
Incentives
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Faster refunds and direct deposit of refunds
Extended due dates and deferred filing for system users
Penalty rebates or delayed penalties
Free software
Free software for low income filers
Offering of (free) internet access centres at shopping centres, offices of the
Tax Administration and mobile access points
Educational programs for school children, citizens and migrants
Advance tax notice, preliminary estimated tax amounts, tax guides
Monetary incentives (rebates)
Preliminary filing assessments on the web, free certified copies of last years
tax returns and competitions between tax offices
Information campaigns to promote electronic
services
 Media campaigns
 Outreach efforts
 Cooperative marketing efforts
 Developing of external websites
 Internal websites
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Mandatory Requirements
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Experiences generally positive
Flattening out return filing requirements to avoid of huge filing
volumes on peak filing days
Automating the corporate income tax return achieved by limiting the
information requirements (electronic return without detailed
financial statements)
Mandatory for all business taxpayers or targeted at large business
(turn over or asset size criteria)
Mandatory for CIT, and or VAT and payroll taxes
Requirements for third parties including employers and financial
institutions to report information on payments, and interest, which
are used to verify PIT returns or as the basis for pre-filled returns
Direct support
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On-line help facilities (context sensitive help)
On-line learning systems with hints and suggestions
Software vendor support
Call centres and personal telephone assistance by
special trained staff
Results based on the strategies for promoting
electronic services
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Substantial progress in the use of electronic filing by taxpayers and
their agents
Most substantial progress made in electronic filing for personal
income tax
Less progress for VAT and corporate income tax
Introduction of electronic filing business tax payers on mandatory
basis
The internet has become a significant tool for the delivery of
services to taxpayers. Tax Administrations have increased the
information content, functionality and user friendliness of their
websites
Conclusions
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Information campaigns is an effective tool in increasing awareness
and usage of electronic products and services
Mandatory requirements have a positive impact and are likely
required for business taxpayers
Relationship building with stakeholders may be time consuming but
pays off in the end
Incentives especially in the form of extensions and faster returns
and direct deposits have a positive impact as do monetary awards
and peer recognition
On-line support is a must but direct support is still the preferred
method by the general public
Key advice relevant to this process - summary
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Develop a consistent and future-oriented channel strategy to
improve service delivery and voluntary compliance
View the different channels in a holistic way, having different roles
to play for different customers
Ensure a good understanding of your customers through surveys,
channel metrics and involvement in administrative channel design
Put in place a channel cost model that supplies essential
information in a targeted and efficient way
Establish mechanisms, such as marketing, to promote the strategic
objectives