Reinventing VAT collection : industry vertical assessment, revenue increase, and public sector reliability
Author(s)Pinhanez, Monica F. (Monica Fornitani)
Reinventing Value Added Tax collection : industry vertical assessment, revenue increase, and public sector reliability
Massachusetts Institute of Technology. Dept. of Urban Studies and Planning.
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This dissertation shows how administrative reforms of the State Tax Administration Bureaus (STABs) in Brazil between 1997 and 2005 contributed to strengthening public sector bureaucracies and institutions at the sub-national level, while increasing tax revenues and compliance. STABs' administrative reform comprised changes in organizational structure (i.e. rationalization of procedures and processes), technological processes (i.e. computerization and on-line processes), and institutional arrangements (i.e. development of public-private sector relationships to improve tax collection and tax collector professionalization). Beyond the market-oriented reforms, these joint changes made possible to taxpayers and tax collectors to visualize the connections and functioning of the tax administration and collection process that they were not able to think about before, i.e., there is evidence for how the administrative reform facilitated the understanding of the links among the several processes in the tax collection, particularly the backward and forward linkages in each industry. The understanding of these linkages advanced a conceptual shift and the adoption of a new cognitive axis-the industry linkages that changed the way tax collectors envisioned the tax collection process. This dissertation shows that understanding these new connections led to increased efficiency, effectiveness, accountability, and transparency, providing faster and more accurate information on taxpayers and tax returns. In addition, I show that in the case of tax administration reforms in the Brazilian STABs the conjunction of tailored organizational and technological changes influenced tax collectors' and taxpayers' compliance, cooperation, and adhesion to reform efforts.(cont.) Technological change enabled the new understanding of the tax sector and enabled industry vertical assessment and functional specialization. The capacity to grasp the conceptual shift emerged from the joint efforts. In turn such efforts led to institutional change and the strengthening of public sector bureaucracies, particularly of the STABs. Through a multi-level methodology, I use quantitative and statistical analysis to show that separate and joint aspects of the administrative reforms had an effect on Value Added Tax (VAT) collection. Then, I carry out a qualitative analysis using case studies to evaluate the aspects of reform that had an impact on the changes in the STABs and how they acted together to create a shift in the conceptual understanding of taxations, of its relationship to industry structure, and of the identity of tax collectors. The choice of cases was structured to track public sector reform, development capabilities (e.g. public officials' capacity training), and the effectiveness of tax collection over time, specifically a period of eight years, between 1997 and 2005.(cont.) The focus was on the local states system that implemented tax administration reforms, specifically related to the collection of the VAT. This data, presented in this dissertation, supports the argument that success is a function of technology, organizational changes, functional specialization, and institutional arrangements, which combined, led to envision a new way to achieve greater tax collection and compliance, a shift in tax-collectors identities, and the strengthening of public sector's institutions. Finally, the diversity of features in the chosen states range from wealth and industrialized, to rural and agricultural, to developing states. Yet, the same national policies cut across states, forcing less developed and active states to engage and catch-up with the reform plans. In this fashion, my findings can be applied to the most developed nations as well as to striving developing countries and poorer nations.
Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 2008.Includes bibliographical references (p. 207-221).
DepartmentMassachusetts Institute of Technology. Dept. of Urban Studies and Planning.
Massachusetts Institute of Technology
Urban Studies and Planning.