Taxation and Customs

Efficient tax and VAT systems encourage greater compliance and help to formalise the economy which brings important benefits to government and civil society. They also benefit businesses which make fewer and simpler payments.

Streamlined customs processes can help encourage cross-border and international trade. By stimulating new business opportunities, robust customs systems can help enhance competitivity and ensure greater compliance.

ICF is supporting a project with the Government of Ethiopia to modernise the Ethiopian Revenues and Customs Authority (ERCA). The project will introduce an electronic filing and payment system to streamline procedures at the ERCA, reducing the time it takes to submit tax forms and effect payment to just one day and reducing the number of procedures to submit tax application and effect payment to just three.

The project is being implemented in close collaboration with the private sector throughout its four year life-span and beyond, and will combine taxpayer education and staff training programmes to ensure the project is truly sustainable in the long-term.

ICF supported BAFICAA (Business Action for Improving Customs Administration in Africa) to create a productive dialogue between businesses and customs authorities in Africa.

Recommendations have been successfully implemented, leading to simplified processes, fast track procedures and computerisation of systems.

ICF partnered with the government of Lesotho on a pilot project to simplify the assessment, administration and collection of VAT. A diagnostic study was conducted on the Lesotho Revenue Authority's (LRA) VAT administration systems, resulting in the implementation of a number of measures to improve efficiency.

Tangible benefits to business include the simplification of processes with a unique TIN and fewer steps saving time and positively affecting businesses' cash flow.

Now business owners can lodge VAT requests in 24 outlets rather than three and it takes just one day to register rather than 14 requiring two signatures for approval instead of seven.

A project in partnership with Liberia’s Ministry of Finance, has computerised the manual paperwork systems in the Customs House and Port of Monrovia and provided basic computer training to 110 customs employees on the new systems.

The project is a component within Phase 1 of a larger and longer-term Trade Logistics Project, being undertaken by the Government. It now takes an average of 4 days, instead of 30, for goods to be released involving only nine procedures instead of 14.

More efficient customs systems will help to encourage cross-border and international trade. They will also help to stimulate new business opportunities, enhance competitiveness and ensure greater compliance, which will all make the processing of goods less time-consuming and costly to business.

ICF is working with Mali’s government to improve the efficiency of tax dispute resolution. At the moment tax policy is a source of many commercial disputes due to a lack of transparency, adequate procedures and institutional organisations.

The project aims to reduce the time, costs and uncertainties related to fiscal dispute resolution and to modernise and strengthen the tax administration system with the long-term aim of reducing the number of fiscal disputes.

Phase I
The first phase of a programme in partnership with GAINDE 2000, a public-private partnership acting as the implementation agency, to streamline and refine the existing system of paperless electronic customs administration. The first phase of our involvement focused on increasing the efficiency of Senegal’s paperless pre-clearance process. Through the provision of technical support and investment in IT equipment, this phase of the project has successfully redefined and streamlined procedures, resulting in a reduction in the issuing of customs pre-clearance declarations from two days to a maximum of seven hours.

The project cost is shared equally by ICF and GAINDE 2000 whose services have already sped up processing of certificates of origin and other import documentation by over 30%. Before ICF support, the processing time for pre-customs declaration was two days, whereas it now takes now longer than seven hours (85% faster).

Likewise, 853 certificates of origin were processed by GAINDE in 2007 but with ICF support this increased to 1,983 certificates in 2008.

Private sector users are already reporting that systems enhancements are having a direct positive impact on their daily business, in terms of time and costs saved.

Phase II
The second phase of the programme commenced activity in 2009 will render the Port of Dakar's customs clearance process entirely paperless. This will be achieved in two stages over the next two and a half years. Firstly, on a national level, the pre-clearance (ORBUS) and clearance (GAINDE) systems will be connected.

Then, at an international level, the ORBUS pre-clearance platforms will be linked with those in Europe, Asia and East Africa. By interconnecting electronically, the Senegal's Customs Administration and Port Authority has committed itself to achieve non-stop 24 hour operations in the Port of Dakar.

The second phase of the project aims to reduce the time associated with the custom clearance process by a further 50%, from an average of 18 to just 9 days. An improvement of this scale will put Senegal's customs administration system on a par with countries like France and Spain where it currently takes nine days to clear customs. The paperless pre-clearance system has been extended to 31 stakeholders including banks and insurance firms.

ICF supported Tanzania's judiciary to modernise and strengthen its capacity to deliver commercial justice promptly, efficiently and transparently through training of judges and court staff and the application of modern technology in the courtrooms.

Four courts in Dar es Salaam (the High Court and its sub-divisions of Commercial, Land and Labour) have been fully equipped with modern audio recording systems; 40 judges, 35 registrars and 35 clerks have been trained on computer skills, 20 court reporters have been trained on the use of the recording equipment and 12 IT staff were recruited and trained.

A more efficient commercial justice system leads to enhanced transparency and accountability, while providing improved security and peace of mind for investors. This will help ensure faster resolution of commercial disputes.

ICF is supporting a project aimed at making the Zambia Revenue Authority (ZRA) a more customer-oriented organisation, educating taxpayers on tax regulations and improving their understanding of ZRA and its services.

It will also include implementation of a new IT system to permit a complete integration of the tax administration.

A third project will modernise tax administration by improving customer services and communications at the Rwanda Revenue Authority (RRA) and establishing an online electronic filing and payment system, further reducing the time and costs associated with doing business in the country.

The new project, endorsed by both the Government of Rwanda and the private sector aims to streamline administration of domestic taxes at the RRA in order to reduce time and costs faced by business tax-payers reducing the time it takes to process VAT, income and employment tax returns from four weeks to just one or two days. It will also allow for tax clearance certificates to be issued in 10 minutes instead of three days.

Key project objectives include capacity building and training, improving communications and customer care at the RRA, as well as the establishment of e-filing and e-payment systems. The project will increase transparency, create a fair, competitive and consistent tax regime and a more conducive business environment in Rwanda.

ICF is working in partnership with the Government on a fourth project which will streamline customs procedures for import and export of goods reducing the preclearance process from 15 to 3 days and the processes for import from 10 to 7 and for export from 10 to 3.