Taxes are the lifeblood of any government. Without taxes, a government could not provide vital services for its population. Tax dollars come from individuals and from businesses and are incorporated into every part of the economy. But for taxation to work, it needs a strong administration to manage the collection and processing of tax. As part of the government’s fiscal reform programme, a new Tax Authority has been established to meet the growing needs of the population and economy.
Over the next three years, tax administration will be completely reformed. New laws and procedures for taxation will set the legal basis for the reforms. New IT systems will make the process of collecting and paying taxes easier and tax officials will be trained in the new systems. And finally, the recruitment of new tax officials will ensure that the Tax Authority has sufficient qualified human resources to implement the reforms.
To show how important human resource development is to the reforms, current tax officials will undergo training for the next two years to understand new processes and laws, develop skills in auditing, tax payer services, risk management and tax return processing. The training will include a combination of on-the-job training and workshops run by national and international tax experts.
How will a new Tax Authority help people, businesses and the country?
The new Tax Authority will be guided by four values: Integrity, Professionalism, Transparency and Respect.
Integrity is the foundation of the new Tax Authority. Integrity means that officials will treat all people the same and apply the law fairly. Integrity requires that tax officials act with honesty and openness. In this way, the new Tax Authority will promote good governance.
Professionalism is the key to success in achieving tax reform. Professionalism reflects an ongoing commitment to the highest levels of achievement. It means establishing standards for accounting, auditing and tax processing to make sure that all transactions and records are kept in the same way, and that they are compatible with best practice. In this way, the new Tax Authority will support all tax payers.
Transparency in tax administration will promote compliance. Transparency means ensuring that information on tax rates and procedures is clear, consistent and readily available. It also means that incentives for compliance and penalties for non-compliance are socialised and enforced.
Respect will form the basis for how tax officials will deal with clients. Respect means being sensitive and responsive to the rights of all individuals. Respect requires that tax officials act with courtesy and consideration at all times. And finally, respect of clients means providing excellent customer service to all tax payers.
The new Tax Authority will:
The new Tax Authority does not take these responsibilities lightly. It understands that reforming to ensure integrity, professionalism, transparency and respect will facilitate the consistent and fair application of the law. This will help the tax payer, create a better business environment, facilitate trade, and strengthen the economy.
The changes won’t happen overnight. It will take time and dedication to bring the tax administration to the high standards of integrity, professionalism, transparency and respect for clients needed to modernize the administration.
But changes are happening and the government is committed to reforming the state structures it needs to make Timor-Leste a country able to provide for the needs of all its citizens.