State of the Union: Five key takeaways from Ursula Von der Leyen
17 September 2020
Key points from von der Leyen's state of the union speech [caption id="attachment_14822" align="alignnone" width="640"]...
GRTU President Paul Abela, Director General Vincent Farrugia and Executive Abigail Mamo have this week met the Government officials that head the Departments that are set for merger: Inland Revenue, VAT, Customs and Tax Compliance. This following communication in December 2012 by which GRTU was informed of the planned merger and to initiate a consultation process.
In its initial reaction GRTU emphasized that these departments are very important civil service departments that perform very important functions because these decisions have a real effect on entrepreneurship and enterprise. GRTU's initial reactions were targeted at outlining very important organizational arrangements required for Government to achieve its tax objectives within this merger, while giving an efficient service.
GRTU is convinced that by removing departmental barriers and focusing on the customer, the departments can make a step in performance and efficiency. GRTU feels that the merge is a positive move as long as it is done in the right way. It must also not be an aggressive human resource cutting exercise that will leave the joint department with insufficient resources leading to poor service and a poor tax collection track record. Human resources must be shifted to better customer care and specific focus on hand-holding and one-to-one care. Focusing much more in terms of what the taxpayer needs, and being able to deliver for the Government a more user-friendly interface in extracting the money from the taxpayer. Focus on helping taxpayers comply with the complexities of the tax system. Tax simplification must be at the heart of this change. What we need is a sea change in the view and the attitudes that taxpayers encounter within such departments.
GRTU requested that this exercise should result in a one-stop-shop that would help taxpayers and businesses and better coordination especially in inspections and visits. The Joint Department should cater for a specific desk/ department for Micro Enterprises and self-employed.
Small businesses and Individuals who try to comply with the system who are not tax evaders, who are not fraudulent, who make genuine mistakes, need to be helped rather than penalized. There needs to be a culture change of Revenue Departments that are more willing discuss, giving it a human face, with a structure of training that is recognized, well thought through and balanced. The joint department should not only remain focused on castigating evaders but also of being very supportive with the taxpayer that is genuinely trying to be compliant. Businesses cannot be treated as potential tax evaders. The approach should be "we're in this together, lets cooperate". There is no question on the amount of tax to be paid, the right amount of tax must be paid but there are different ways of getting people on your side. To ensure the greatest possible transparency and performance the new joint department should benefit from a new accountability framework. Committee to keep an eye on the merger (watch dog). The Committee would meet on a regular basis and be presented with reports, similar to the system that used to be carried out when the business first was set up.
GRTU was assured that we share the same ideas and these are the basis for the reform. GRTU requested that in future meetings, which should also involve the company users, the heads should explain how current difficulties and shortcomings will improve, how the customer will be better served and how solving problems will become easier and not more bureaucratic. GRTU emphasized that all prior mergers were successful only in making the life of the public servants easier and not in real improved customer care. GRTU warned that structures following mergers have the tendency of becoming more complex and powers more centralized and more difficult to reach. GRTU told the officials that for instance we work well with Customs where even though it's not always rosy it's easy to access the person you need, sit down and find a solution. This unlike the customer care system of the VAT Department where it has only added to bureaucracy and difficulty even to get basic help.
When asked about the problems the GRTU hears about from members and encounters in order to have them addressed by the merger GRTU mentioned that members are sometimes investigated for no apparent reason and the Department keeps asking them for papers for months which amounts to a ridiculous amount of time and cost not only for the member but also for the department. GRTU emphasized that evaders must be investigated but investigations for genuine mistakes and investigations for no reason but a simple sampling exercise have to be sensitized. GRTU also mentioned how difficult it is to get to the right person at the VAT Department, how long it takes for someone to answer the line and when finally a customer care representative answers they simply ask you to send an email and you have to wait for an answer. GRTU however told the representatives that they have to start giving a face to their departments and meeting people and even hold meetings on this merger in order to feel what the users are feeling. The representatives appreciated that this would be a good idea.
GRTU also emphasized that from experience we feel that an intensive amount of training is required and that a significant investment is required in this regard as the Department is made up of people and it is these people we depend on to execute well.
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