Intergrity Management Guide (Final)

download Intergrity Management Guide (Final)

of 70

Transcript of Intergrity Management Guide (Final)

  • 8/14/2019 Intergrity Management Guide (Final)

    1/70

    Central Board ofDivision

    Government of Pakistan

    INTEGRITYPOLICY DOCUMENT

    January 2007

    MODERATED AND REPORT COMPILED BY HRM WING

    1

    1

  • 8/14/2019 Intergrity Management Guide (Final)

    2/70

    TABLE OF CONTENTS

    PageExecutive Summary 3

    Part 1Introduction to the Integrity Development Process: 8

    A. General 8B. Defining Integrity 10C. The Elements of an Integrity Strategy 11D. Integrity Development Cycle 12E. Methodology of the Workshop 13F. Participants of Workshops 14

    Part 2 The Self-Assessment Process: 15

    1. Leadership and Commitment 152. Regulatory Framework 183. Transparency 204. Automation 235. Reform and Modernization 256. Audit and Investigation 277. Code of Conduct 308. Human Resource Management: 32

    8.1 Remuneration and conditions 338.2 Recruitment, selection and promotion 348.3 Deployment, rotation and relocation 358.4 Training and professional development 368.5 Performance management/appraisal 37

    9. Morale and Organizational Culture 3910. Relationship with the Private Sector 41

    Part 3 The Action Planning Process: 44Action Plans 44Integrity Vision Statement 50Integrity Steering Committee 51Marketing Strategy 51

    Part 4 Action Plan Review, Evaluation and re-development 51

    Annexure (A-K) 53-69

    2

  • 8/14/2019 Intergrity Management Guide (Final)

    3/70

    Executive Summary

    1. General In view of the tremendous impact, which the integrity of tax collectors

    has on the overall legitimacy and ability of the tax collecting institutions to collect the

    due taxes, the Integrity Management of the Human Resource cannot be

    overemphasized. Recognizing this important aspect of Integrity management of the

    workforce, the Secretary General Division/Chairman CBR assigned the task of

    consulting the prevalent best practices around the world to HRM Wing for suggesting

    policy options.

    2. During the course of this task the World Revenue Organizations (WCO) Integrity

    Development Guide was found to be most relevant and a professional document, which

    serves as a resource material for its member administrations to develop their own

    strategies for dealing with integrity issues with due regard for each countrys own unique

    cultural and socio-economic environment. The Guide is based on the philosophy of

    continuous improvement i.e. by implementing an ongoing cycle of integrity self-

    assessment, strategy development and progress evaluation. Though the processes are

    designed for Revenue administrations but from view point of usefulness and flexibility

    these are practically applicable to all Collecting Agencies and even may serve as a

    starting point for such endeavors to all government organizations.3. Based on the Revised Arusha declaration, the guide focuses on a number of core

    issues that are central to the development of an effective and efficient integrity program.

    It provides a framework to examine the management, administrative and integrity

    strategies currently being employed and to identify opportunities for further

    improvement.

    4. Keeping in view its adaptation by various administrations of other countries it

    was decided to use it as the basic framework for Central Board of s Self

    assessment/evaluation of its integrity management situation.The integrity development

    cycle of the WCO Guide is designed to be undertaken as a group exercise, drawing on

    the strengths and experience of a range of people from within the organization, and

    where appropriate, from outside the organization. To get the most out of this process it

    3

  • 8/14/2019 Intergrity Management Guide (Final)

    4/70

    was decided that the Top Management of CBR be invited to deliberate the issues.

    Accordingly the First Strategic Integrity Management workshop of the TOP

    Management was held on 9th and 10th December, 2006 at Bhurban. The following are

    some of the key developments arising out of the workshop.

    2. Assessment/identification of weak areas of CBR on the 10 Elements. The

    participants assessed the prevailing conditions in CBR on the 10 elements of the

    Arusha Declaration. This assessment was done through a general vote for the element

    (to find out the participants perception) and then through an assessment of the whole

    checklist provided with the integrity Development guide. The results are as follows.

    Ratings By Participants (By Vote)

    S.No Element Very low(1)

    Low(2)

    Neutral(3)

    Good(4)

    VeryGood (5)

    1 Leadership & Commitment 3 7 8

    2 Regulatory Framework 3 14

    3 Transparency 7 9

    4 Reform & Modernization 8 9

    5 Automation 1 1 15

    6 Audit & investigation 2 11

    7 Code of Conduct 1 14

    8 HRM (Separately)

    9 Morale & Corporate Culture 1 16

    10 Relationship with Privatesector

    2 6 8

    Ratings By Participants of HRM (By Vote)

    S.No Element Very low(1)

    Low(2)

    Neutral(3)

    Good(4)

    VeryGood (5)

    1 Remunerations & Condition CBR

    2 Recruitment, Selection &Promotion

    CBR

    3 Development, Rotation &Relocation

    CBR

    4 Training & ProfessionalDevelopment

    CBR

    5 PerformanceManagement/Appraisal

    CBR

    4

  • 8/14/2019 Intergrity Management Guide (Final)

    5/70

    Over all ratings based on calculation for each item of check list

    S.No Element Over all rating

    1 Leadership & Commitment 3.16

    2 Regulatory Framework 2.71

    3 Transparency 2.524 Reform & Modernization 2.26

    5 Automation 2.81

    6 Audit & investigation 2.33

    7 Code of Conduct 3.13

    8 HRM (Separately) 2.73

    9 Morale & Corporate Culture 2.52

    10 Relationship with Private sector 2.32

    Over all ratings for various elements of HRM for each item of check list

    S.No Element Over all rating

    1 Remunerations & Condition 2.34

    2 Recruitment, Selection & Promotion 3.31

    3 Development, Rotation & Relocation 2.37

    4 Training & Professional Development 2.64

    5 Performance Management/Appraisal 2.98

    3. Action plans for weak areas and its implementation leadership.The following action plans and its implementation leadership were decided for itsimmediate adoption/approval by Secretary General Division/ Chairman,CBR.

    Formal review of procedures and systems on at least annual basis in

    consultation with field formations: (Member Legal in consultation with MemberTP&R)

    Simplification of procedures, facilitation of stakeholders and quick disposal of

    complaints and regular surveys to seek feedback of stakeholders. (MemberFATE, Member FR&S and Reps of line members)

    Effective and comprehensive internal controls should be tested and put in place

    to prevent corruption. Information should be obtained and analyzed to identifytrends, opportunities, vulnerabilities with a view to improvement. (Member Audit,DGs I&A, DG I&I & reps of line members).

    Automation of Business processes and systems as per international standards to

    be reviewed by an external independent agency. ( Member TP&R, Member IMS,Member FR&S)

    Development of codes of conduct for the private sector, which will clearly set out

    standards of professional behaviour. (Member FATE & Reps of Line Members)

    5

  • 8/14/2019 Intergrity Management Guide (Final)

    6/70

    Appropriate result-focused performance standards and indicators to be

    established and regularly monitored. (Member FR&S and reps of other wings)

    Reactivate Cabinet Committee on Financial Reforms. (Chairman)

    Revise/Improve Code of Conduct (Member HRM)

    Regular meetings with field officers/staff to educate them on integrity & reforms

    (All Members & Communication Specialist).

    4. Development of Integrity Vision Statement

    At the end of the conference the participants worked on developing an integrity visionstatement for the CBR. The statement was unanimously developed and accordinglysubmitted for the approval of the Secretary General Division/Chairman CBR.A copy of the CBR Integrity Management Policy Statement signed by all the Members ofthe Board and the respective DGs is reproduced below.

    6

  • 8/14/2019 Intergrity Management Guide (Final)

    7/70

    4. Integrity Steering Committee.

    The conference also approved an integrity steering committee which will oversee theimplementation of the above mentioned action plans. The committee was further taskedto develop a charter of its functions and steer the integrity vision and management of

    CBR. The composition of the committee is as follows:-

    Member Direct Taxes

    Member Sales Tax & Federal Excise

    Member Revenue

    Member HRM

    Member Admin

    DG Intelligence & Investigation

    DG Audit & Inspection (Direct taxes)

    DG Audit & Inspection (Indirect Taxes)

    MARKETING STRATEGY

    In order to ensure that the results of the self-assessment and action planning processare well understood and accepted by the executive and embraced by the majority of theorganizations staff, the following marketing strategy was adopted.

    Involve as many people as possible in the process; Secure political and media support; Secure private sector support and involvement;

    Sell the real benefits of an improved integrity regime to all staff; Gain executive management commitment to the Plan; Ensure that those not present at the workshop are not overly suspicious of theworkshops outcomes and the rationale behind each of the key elements of the ActionPlan; and Ensure that each of the workshop participants maintains an active role in theimplementation of the Action Plan.

    7

  • 8/14/2019 Intergrity Management Guide (Final)

    8/70

    Part 1

    INTRODUCTION TO THE INTEGRITY DEVELOPMENT PROCESS

    A. General

    administrations generally deal with four key issues: collection, community protection,

    trade facilitation and protection of national security. To effectively deal with these issues,

    a high level of integrity is critical.

    2. The adverse effects of corruption within a administration include reduction in

    public trust and confidence in government institutions; increased costs of business,

    which are ultimately borne by the community; reduction in the level of voluntary

    compliance with laws and regulations; leakage; distortion of economic incentives; a

    reduction in national security and community protection; and creating an unnecessary

    barrier to international trade and economic growth.

    3. Though probably some degree of corruption is present in all countries and in all

    public institutions, yet the services, because of the scope, nature and complexity of

    their work are particularly susceptible to corruption. In order to both minimize the

    negative consequences of corruption and to further develop and maintain public trustand confidence, administrations need to address the issue in a logical and systematic

    way and develop and implement solutions which are relevant to their needs and which

    reflect their unique operating environment.

    4. In recent years a significant amount of international attention has also been

    devoted to this issue in a number of conferences, declarations and conventions focused

    on the issue of administrative corruption, attempting to identify the problem of corruption

    and set out a range of standards and practices considered necessary to deal with it.

    From services point of view, three declarations: the WCOs 1993 Arusha Declaration;

    the 1994 Columbus Declaration; and the 1997 Lima Declaration set forward a range of

    Revenue-related recommendations. Additionally, the OECD, the Organization of

    8

  • 8/14/2019 Intergrity Management Guide (Final)

    9/70

    American States, the European Union, the United Nations, the World Bank and

    Transparency International have focused their attention on administrative corruption.

    5. In November 2001, the President of Pakistan approved the Strategy Document of

    CBRs Tax Administration Reform Project (TARP). The vision of the CBRs Reforms

    Programme is to transform CBR into a modern, progressive, effective, autonomous and

    credible organization for optimizing by providing quality service and promoting

    compliance with tax and related laws. The mission comprised of enhancing the

    capability of the tax system to collect due taxes through application of modern

    techniques, providing taxpayer assistance and by creating a motivated, satisfied,

    dedicated and professional workforce. Emphasis was also placed on values which

    included integrity, professionalism, teamwork, courtesy, fairness, transparency andresponsiveness.

    6. In view of the tremendous impact, which the integrity of tax collectors has on the

    overall legitimacy and ability of the tax collecting institutions to collect the due taxes, the

    Integrity Management of the Human Resource cannot be overemphasized. Recognizing

    this important aspect of Integrity management of the workforce, the Secretary General

    Division/Chairman CBR assigned the task of consulting the prevalent best practices

    around the world to HRM Wing for suggesting policy options.

    7. During the course of this task the World Revenue Organizations (WCO) Integrity

    Development Guide was found to be most relevant and a professional document, which

    serves as a resource material for its member administrations to develop their own

    strategies for dealing with integrity issues with due regard for each countrys own unique

    cultural and socio-economic environment. The Guide is based on the philosophy of

    continuous improvement i.e. by implementing an ongoing cycle of integrity self-

    assessment, strategy development and progress evaluation. Though the processes are

    designed for Revenue administrations but from view point of usefulness and flexibility

    these are practically applicable to all Collecting Agencies and even may serve as a

    starting point for such endeavors to all government organizations. Based on the

    Revised Arusha declaration, the guide focuses on a number of core issues that are

    9

  • 8/14/2019 Intergrity Management Guide (Final)

    10/70

    central to the development of an effective and efficient integrity program. It provides a

    framework to examine the management, administrative and integrity strategies currently

    being employed and to identify opportunities for further improvement.

    8. The nature of corruption and developments in the field of integrity, are constantly

    changing and accordingly there is a growing body of knowledge and experience that

    authorities can draw on to further develop their integrity strategies. However the WCO

    guide contains a wealth of time tested checklists, which are very relevant to the task in

    hand. Moreover keeping in view its adaptation by various administrations of other

    countries it was decided to use it as the basic framework for Central Board of s Self

    assessment/evaluation of its integrity management situation.

    9. The integrity development cycle of the WCO Guide is designed to be undertaken

    as a group exercise, drawing on the strengths and experience of a range of people from

    within the organization, and where appropriate, from outside the organization. To get the

    most out of this process it was decided that the Top Management of CBR be invited to

    deliberate the issues.

    10. This present paper is based on the proceedings of the First Strategic Integrity

    Management workshop of the TOP Management which was held on 9

    th

    and 10

    th

    December, 2006 at Bhurban based on the aforesaid framework of WCO.

    B. DEFINIG INTEGRITY

    At the outset, an appreciation of the implications of the terms corruption and integrity

    is imperative.

    2. There is no universally agreed definition of corruption. However, most useful

    definitions focus on three key themes, namely:

    The departure from, or contravention of, public duty;

    The provision or receipt of some form of improper inducement; and

    An element of secrecy.

    10

  • 8/14/2019 Intergrity Management Guide (Final)

    11/70

    3. Thus for an act to be considered corrupt, it usually needs to involve the

    contravention of public duty, the receipt of some form of improper inducement, and it

    needs to occur in an environment of secrecy, or at least without official sanction. At the

    same time, there are many specific behaviours and combinations of behaviours, which

    are generally regarded as corrupt. These typically fall under three broad headings:

    bribery, nepotism and misappropriation.

    4. In recent times, however, the focus of anti-corruption efforts has expanded to

    incorporate the more positive aspects of integrity development as well. For example,

    some administrations have redefined the concept of integrity to not only include

    combating abuse of power or corruption but also conforming to a standard in service

    performance such as service standards or client charters. In many administrations, theconcept of integrity now means delivering services to meet the expectations of

    taxpayers and stakeholders.

    Integrity therefore can be defined as:

    A positive set of attitudes which foster honest and ethical behavior andwork practices.

    In other words, integrity is more than simply the absence of corruption. Rather, it

    involves also the developing and maintaining a positive set of attitudes and values,

    which give effect to the organizations aims, objectives, and the spirit of its integrity

    strategy.

    C. THE ELEMENTS OF AN INTEGRITY STRATEGY

    The Arusha Declaration (Revised) is the hallmark of the commitment of international

    Revenue community towards good governance and integrity in Revenue.

    2. The ten elements outlined in the (Revised) Arusha Declaration provide the most

    practical basis for the development and implementation of a range of integrity or anti-

    corruption strategies relevant to the operating environment. These elements are:

    1. Leadership and Commitment2. Regulatory Framework

    11

  • 8/14/2019 Intergrity Management Guide (Final)

    12/70

    3. Transparency4. Automation5. Reform and Modernization6. Audit and Investigation7. Code of Conduct

    8. Morale and Organizational Culture9. Relationship with the Private Sector10.Human Resource Management

    D. INTEGRITY DEVELOPMENT CYCLE

    The Integrity Development Cycle comprise of the following phases:-

    Phase One:

    Assessment phase: to

    Identify the key elements of an effective integrity strategy; and

    Provide a practical guide, or checklist, to assist managers to both assess the

    usefulness of their current strategies and to identify areas of future improvement.

    Phase Two:

    Action Plan phase: To develop an Integrity Action Plan that includes a range of keyintegrity development strategies, identifies responsible officials, establishes timelines,

    and sets verifiable performance indicators.

    Phase Three:

    The evaluation phase: This is for administrations that have already undertaken theintegrity self-assessment process and have implemented an Integrity Action Plan. It isdesigned to be conducted at least 12 months after implementation of the Integrity ActionPlan has commenced, and is aimed at assisting administrations to:

    Assess their integrity strategies to determine whether they have achieved the

    anticipated outcomes;

    Determine where there are areas that require further attention and/or newinitiatives that might be introduced;

    Develop an enhanced Integrity Action

    12

  • 8/14/2019 Intergrity Management Guide (Final)

    13/70

    E. Methodology of the Workshop

    The conference was moderated by Mr. Alan Gilmour (HR Advisor to CBR). The

    participants which comprised all the Eleven Members of the Central Board of and the

    Director Generals of Training and Research (Revenue as well as direct taxes), Director

    General Intelligence and Investigation, Director General Post Clearance Valuation,

    Directors General Audit and Inspection (Direct and Indirect Taxes) were divided into

    three syndicates based on their individual competencies (syndicate composition and

    the topics assigned are at Annex K). The three syndicates were then given threeelements each from the above mentioned Elements of Strategy given in para C. The

    syndicates accordingly discussed threadbare the topics assigned to them with the help

    of the checklist of initiatives indicated in the Integrity Guide in its direct relevance to

    CBR and its business processes. The assessment was made for each item on the scale

    of 1-5, with 1 standing for the lowest score and 5 for the highest. The same assessment

    13

  • 8/14/2019 Intergrity Management Guide (Final)

    14/70

    was also made for every topic collectively (Ratings on each checklist are placed as

    Annex A-J). The general consensus of the conference was that any individual checklist

    item receiving a score of less then 3 needs a priority and accordingly actions were

    identified for these along with the timeline for taking corrective action as well as

    delegation of implementation responsibility. Due to the relative importance as well as

    the overriding impact of HR policies on any integrity situation the HR topic was

    discussed/rated separately by all the syndicates collectively.

    2. The specific findings of the work shop on each element of Integrity strategy have

    been discussed in detail in the next section of this report.

    F. Participants of the Workshop

    1. Mr. Mumtaz Ahmad, Member (Legal)2. Mr. Mohammed Talha, Member (HRM)

    3. Mr. Salman Nabi, Member (Direct Taxes)

    4. Mr. Shahid Rahim Sheikh, Member (Revenue)

    5. Ms. Mussarat Jabeen, Member (Sales Tax & Federal Excise)

    6. Maj. Gen (Retd) Mohammad Yasin, Member (Administration)

    7. Mr. Abdul Razzaq, Member (Audit)

    8. Mr. Habib Fakhurrudin, Member (FATE/TP&R)

    9. Mr. AAmir Z. Chaudhry, Member (IMS)

    10. Dr. Ather Maqsood Ahmad, Member (FR&S)

    11. Mr. Munir Qureshi, DG (Training & Research, Direct Taxes)

    12. Mr. Mehmood Alam, DG (Training & Research, Revenue, Sales Tax&Federal Excise)

    13. Mr. Usman Khalid Mirza, DG (Audit & Inspection, Direct Taxes)

    14. Mr. Sher Nawaz Khan, DG (Audit & Inspection, Revenue, Sales Tax&Federal Excise)

    15. Ms. Razia Sultana, DG (Post Clearence Audit)

    16. Maj. Gen (Retd) Fahim Akhtar Khan, DG (Intelligence & Investigation)

    17. Mr. Nasiruddin Ahmad, CEO (PRAL)

    18. Mr. Imran Ghaznavi, Communication Specialist. (TP&R Wing)

    14

  • 8/14/2019 Intergrity Management Guide (Final)

    15/70

    Part 2

    PROCESS OF SELF-ASSESSMENT

    1. LEADERSHIP AND COMMITMENT

    The (Revised) Arusha Declaration states:

    The prime responsibility for corruption prevention must rest with the head of Revenue

    and the executive management team. The need for high levels of integrity must be

    stressed and commitment to the fight against corruption maintained over the long

    term. Revenue managers and supervisors should adopt a strong leadership role and

    accept an appropriate level of responsibility and accountability for maintaining high

    levels of integrity in all aspects of Revenue work. Revenue managers should

    demonstrate a clear and unequivocal focus on integrity and be seen to set an example

    that is consistent with both the letter and spirit of the Code of Conduct.

    1.1 An effective integrity programs require a high level of management support and

    leadership coupled with responsibility. It is important that there are clearly defined

    supervision and decision-making structures and obligations. Managers as well as Staff

    at all levels must accept an appropriate degree of responsibility and accountability. For

    example, a system of accountability could be introduced to make supervisors at least

    partly answerable for their subordinates misdeeds. Staff at all levels should be

    encouraged to identify and report breaches of integrity, including within their own work

    team.

    1.2 For assessment of this aspect a questionnaire containing checklists (Anex A)

    was analyzed by syndicate.

    1.3 The checklist for Leadership and commitment as a whole was rated 3.16 (on a

    scale of 1 to 5, with 1 being the lowest rating). The syndicate acknowledged the need

    for firm commitment at the highest political level to maintaining a high standard of

    integrity throughout the civil service and particularly in services. This is particularly

    important in a society where corruption is a widespread systemic problem, and does

    not just involve individual cases.

    15

  • 8/14/2019 Intergrity Management Guide (Final)

    16/70

    1.4 The syndicate expressed satisfaction on the high level of commitment and strong

    leadership role being expressed by the Chairman and the senior management team in

    the promotion of integrity in CBR.

    1.5 It was generally acknowledged that there is bipartisan support for the integrity

    program in : politicians are aware of the organizations integrity efforts: the Government

    actively promotes the maintenance of a high level of integrity within the civil service

    and/or : the CBR receive adequate resources to allow it to fulfill its functions effectively

    and efficiently: all new projects, policies and initiatives are examined to take into

    account integrity risks: there is a strategy in place to address the issue of integrity

    among the Senior Management Team: in the selection for management positions,appropriate consideration is given to the personal integrity of the officers: the selection

    process takes account of their commitment and ability to implement the CBRs anti-

    corruption policies: supervisors take a strong leadership role for promoting integrity and

    leading by example: the Chairman and the Senior Management Team lead by example,

    provide leadership and demonstrate an active commitment to the integrity program:

    there is proactive and visible leadership on the issue of integrity from the highest levels

    of management: and the Chairman actively promotes integrity with external

    stakeholders.

    1.6 AREAS REQUIRING IMPROVEMENT: However, while there is a satisfactory

    level of commitment and proactive promotion of Integrity at the top level of CBR the

    following weak areas were identified for suitable augmentation in order to further

    improve the situation.

    There is room for improvement on the aspects of supervisors being held

    accountable for corrupt practices and malpractice of staff under their supervision:specifying their responsibility and increasing their competence to undertake this task

    and redefining their role to be held accountable.

    Encouraging managers to work with staff to identify any weaknesses and

    vulnerabilities in relation to processes and procedures.

    16

  • 8/14/2019 Intergrity Management Guide (Final)

    17/70

    Holding members of a work team accountable for corrupt practices engaged in by

    other members of the work team.

    Providing internal management training programs adequately addressing

    management responsibilities for corruption prevention and detection strategies.

    Increasing the level of political support for integrity in : and providing a system in

    place to assist managers to identify staff that, by virtue of temporary personal

    circumstances, may be vulnerable to corruption and malpractices.

    17

  • 8/14/2019 Intergrity Management Guide (Final)

    18/70

    2. REGULATORY FRAMEWORK

    The (Revised) Arusha Declaration states:

    Revenue laws, regulations, administrative guidelines and procedures should be

    harmonized and simplified to the greatest extent possible so that Revenue formalities

    can proceed without undue burden. This process involves the adoption of

    internationally agreed conventions, other instruments and accepted standards.

    Revenue practices should be reviewed and redeveloped to eliminate red tape and

    reduce unnecessary duplication. Duty rates should be moderated where possible and

    exemptions to standard rules be minimized. Systems and procedures should be in

    accordance with the International Convention on the Simplification and Harmonization

    of Revenue procedures (Revised Kyoto Convention).

    2.1 Complex regulations, procedures or administrative guidelines allow corrupt

    practices to develop and flourish. Possible strategies to minimize regulation include the

    adoption of internationally agreed standards and good practices. A key initiative is the

    adoption of risk management principles to ensure that not only the trade and risks are

    assessed but diagnostic and preventive mechanisms are also available to identify and

    investigate integrity risks within the organization of CBR.

    2.2 Questionnaire on Regulatory framework (Annex B) received an overall score of

    2.71 indicating a compelling need for improvement. The syndicate agreed that complex

    regulations, procedures or administrative guidelines allow corrupt practices to develop

    and flourish. However, it also observed that the principles underpinning modern

    regulatory frameworks are being adopted in CBR and all efforts are being made to

    eliminate corruption including a curbing of monopoly power and official discretion.

    2.3 The results on positive note indicate that most of the internationally agreed

    standards have either been implemented or they are scheduled for implementation:

    systems and procedures are periodically reviewed and/or re-engineered to eliminate red

    tape and avoid duplication: changes are based on periodic review and introduced in a

    18

  • 8/14/2019 Intergrity Management Guide (Final)

    19/70

    transparent manner: when systems and procedures are being reviewed attention is paid

    to eliminating the corruption inducing combination of monopoly power, official discretion

    and accountability: there are regular representation at interdepartmental level for

    promotion of trade and activities: regulations, procedures and legislation, are

    transparent and communicated to stakeholders: and the opinion of stakeholders is given

    due consideration on whether legislative provisions and procedures are workable and

    understandable.

    2.4 AREAS REQUIRING IMPROVEMENT: while appreciating the positive aspects

    the he syndicate also identified some weak areas, which need to be improved. These

    include:-

    Suggestions that application of administrative penalty system needs to be moresimple and straightforward and applied in a consistent manner:

    The organization requires improving a formal system to implement a continuous

    improvement strategy:

    Risk management needs to be supported by automated systems: and improved risk

    management policies and practices need to be in place to identify high-risk areas.

    The staff that performs the functions or procedures involved in the review process

    has to be strengthened,. A need for close liaison and co-operation with other agencies to ensure that policies

    and procedures are coordinated effectively and that opportunities to reduce or

    eliminate red tape are explored.

    19

  • 8/14/2019 Intergrity Management Guide (Final)

    20/70

    3. TRANSPARENCY

    The (Revised) Arusha Declaration states:

    Revenue taxpayers are entitled to expect a high degree of certainty and predictability

    in their dealings with Revenue. Revenue laws, regulations, procedures and

    administrative guidelines should be made public, be easily accessible and applied in a

    uniform and consistent manner. The basis upon which discretionary powers can be

    exercised should be clearly defined. Appeal and administrative review mechanisms

    should be established to provide a mechanism for taxpayers to challenge or seek

    review of Revenue decisions. Client service charters or performance standards should

    be established which set out the level of service taxpayers should expect from

    Revenue.

    3.1 Transparency is a key issue for all administrations. Increasing accountability and

    maintaining an open and honest relationship with taxpayers and all stakeholders is

    crucial to maintaining public trust and confidence in the performance of government

    functions.

    3.2 Any deviations from laws, regulations and discretionary power should be justified

    and documented for later review. There should be a capacity for administrative or

    judicial review. In the first instance, such review should be made on an internal basis.

    However, taxpayers should have access to independent, external review. In developing

    or implementing appeal or review mechanisms an appropriate balance should be struck

    between the need to make the process inexpensive, timely and accessible and the need

    to ensure it is not used inappropriately for frivolous appeals.

    3.3 Client service charters are a way of increasing accountability and demonstrating

    Governments commitment to providing quality service to taxpayers. Service standards

    should be challenging but realistic and be fully supported by the organizations systems

    20

  • 8/14/2019 Intergrity Management Guide (Final)

    21/70

    and procedures. A high level of transparency is not an easy task but it is vital to the

    development of a comprehensive integrity program.

    3.4 The results of assessment for Transparency on the checklist (Annex C) on a

    positive note indicate that taxpayers are provided with sufficient accurate, consistent,

    accessible and user-friendly information to allow them to meet their responsibilities to .

    Mechanisms are in place to report new initiatives, decisions, or changes in legislative

    requirements and procedures that may impact upon taxpayers: for access to information

    the Customer Help Desks/Call Centers, Information Centers, Industry Consultative

    Committees, and displays and signage are being employed: all fees and charges levied

    are published in order to allow traders to calculate more accurately the costs involved

    in complying with requirements: electronic media is used for dissemination ofinformation to taxpayers and there are mechanisms in place to interact with the media:

    results of performance is made publicly available (i.e. Internet, annual reports etc):

    simple processes or systems for seeking advice are being established in order to

    provide taxpayers with a degree of certainty and predictability.

    3.5 The syndicate noted with satisfaction that electronic media is increasingly being

    used for dissemination of information to the taxpayers and now there are mechanisms

    in place for regular interaction with media. The syndicate further expressed satisfaction

    on the availability of various review and appeal mechanisms (or independent

    adjudication) available to taxpayers to seek a review of their tax grievances. However

    the overall rating of 2.52 in the sphere of Transparency indicates the compelling need

    for improvement too.

    3.6 AREAS REQUIRING IMPROVEMENT: Potential weak areas requiring attention,

    identified by the syndicate are as following:-

    There is need of easier accessibility of seeking advice/rulings with development of a

    library or database of previous decisions.

    21

  • 8/14/2019 Intergrity Management Guide (Final)

    22/70

    Mechanisms need to be developed and implemented which monitor and evaluate

    the organizations performance against established standards and international best

    practices.

    Citizen or service charters for realistic service standards with ability to be supported

    by the organizations systems and resources, require to be developed indicating

    clearly the level of service that the taxpayers should be able to expect and displayed

    at public as well as work places.

    Once developed the staff would need to be aware of the standards contained in

    service charters and those holding service positions would be provided with training

    in client service.

    Attention is required to be given to informing taxpayers of their rights when dealing

    with and this information needs to be more easily accessible.

    The basis or criteria upon which officials exercise discretionary power needs to be

    clearly defined and made publicly available and, where appropriate, the reasons for

    decisions should be conveyed to those affected.

    In cases of non-compliance with procedures systems are required to analyze and

    determine if the cause is a lack of adequate communication from .

    Suitable controls over procurement procedures and tendering for work need to be

    developed.

    Taxpayers may be consulted to determine their information requirements and

    preferred media.

    There is a need for a system for monitoring consistency between different offices,

    provinces or regions concerning decisions, procedures and information provided.

    22

  • 8/14/2019 Intergrity Management Guide (Final)

    23/70

    4. AUTOMATION:

    The (Revised) Arusha Declaration states:

    Automation or computerization of Revenue functions can improve efficiency and

    effectiveness and remove many opportunities for corruption. Automation can also

    increase the level of accountability and provide an audit trail for later monitoring and

    review of administrative decisions and the exercise of official discretion. Where

    possible, automated systems should be configured in such a way as to minimize the

    opportunity for the inappropriate exercise of official discretion, face-to-face contract

    between Revenue personnel and taxpayers and the physical handling and transfer of

    funds.

    4.1 The Guide suggests that Information and Communication Technology systemsshould complement processes that cannot be automated, the design of computerized

    systems should ensure that the most vulnerable points in the manual system are not

    replicated and that the new system does not simply shift the point of corruption to a part

    of the process that is not being automated

    4.2 The syndicate noted that whereas CBR has made momentous achievements in

    the automation and computerization of its work processes in order to reduce the need

    for direct interaction between taxpayers and tax collectors. However with an overall

    rating of 2.26 on the Checklist (Annex D) reflects that still a lot requires to be done in the

    field of automation.

    4.3 The results on positive note indicate that there is adequate separation of tasks

    between those officials associated with identifying risk and those officials involved in the

    subsequent processes of collection. The opportunity for unnecessary day-to-day

    contact between officials and taxpayers has been reduced: there is a program of

    developing business partnerships with the business aiming at increasing voluntary

    compliance: the automated systems are been designed with elimination of corruption in

    mind and appropriate security and firewall provisions are in place to protect the systems

    from external misuse. STARR AND STREAM are functional on Sales Tax side. On the

    Revenue side, the PACCS will be rolled out throughout the country to replace ONE

    23

  • 8/14/2019 Intergrity Management Guide (Final)

    24/70

    Revenue within this year and the Integrated Tax management System, linking all tax

    streams is under active evolution.

    4.4 AREAS REQUIRING IMPROVEMENT: However, as stated earlier, still there are

    certain weak areas which require attention, and which are given as follows:-

    The external consultants and contractors involved in the provision or support of

    computer systems, require being subject to security checks.

    Supervision and accountability systems need to be established to monitor

    performance.

    The use of on-line transactions supported by self-assessment and audit-based

    controls needs to be promoted.

    A comprehensive risk assessment or review is to be conducted to assess the

    corruption risk posed by automated systems: processes have to be in place to

    ensure that the system is not vulnerable to staff with relevant system knowledge.

    CBR needs to have an on-line action plan supported by an IT security strategy

    addressing the risks associated with on-line electronic transactions: the automated

    payment systems needs to be firmly established to eliminate or limit the physical

    handling and transfer of funds between officials and taxpayers.

    Attention needs to be paid to increasing official supervision and accountability atthose points in the process that cannot be automated.

    The numbers of officials with access to the systems programming need to be limited

    and controlled.

    Access to secure information needs to be strictly controlled, monitored, and regularly

    audited to ensure that information is not being viewed for inappropriate or private

    purposes: and the appropriate operating procedures to support the use of electronic

    transactions have to be developed.

    24

  • 8/14/2019 Intergrity Management Guide (Final)

    25/70

    5. REFORM AND MODERNIZATION:

    The (Revised) Arusha Declaration states:

    Corruption typically occurs in situations where outdated and inefficient practices are

    employed and where taxpayers have an incentive to attempt to avoid slow or

    burdensome procedures by offering bribes and paying facilitation fees. Revenue

    administrations should reform and modernize their systems and procedures to

    eliminate any perceived advantages that might be obtained through circumventing

    official requirements. Such reform and modernization initiatives should be

    comprehensive in nature and focus on all aspects of Revenue operations and

    performance. The Revised Kyoto Convention provides a sound reference point for

    such initiatives.

    5.1 Reform and modernization of administration should be based on a

    comprehensive diagnosis of needs and be tailored to the individual circumstances and

    aspirations of the administration concerned.

    5.2 The syndicate noted that reform and modernization process has been in full

    swing at the CBR for the last five years and many milestones have been achieved since

    then. But with an overall rating of 2.8 on the checklist for Reform & Modernization

    (Annex E) the syndicate felt that the process of reforms still needs further augmentation.

    5.3 The results on positive note indicate that the CBRs reform and modernization

    process is based on a comprehensive diagnosis of the administrations capacity needs:

    the reform and modernization program is comprehensive in nature and address all the

    key functional areas of : due attention has been paid for ensuring active involvement of

    key stakeholders, including the private sector and other government agencies: it is

    focused specifically on improving integrity and the administrative controls designed to

    deter corruption and foster integrity: job design is focused on eliminating the corruption

    inducing factors of monopoly power, officers discretion and low levels of control or

    accountability: performance targets are being set for core processes: the reform and

    modernization program focus on the adoption of agreed international standards and

    instruments: and the possibilities for electronic data submission have been increased.

    25

  • 8/14/2019 Intergrity Management Guide (Final)

    26/70

    5.4 AREAS REQUIRING IMPROVEMENT: On the weaker notes following was

    observed:-

    There is need of more human and financial resources allocation to the reform and

    modernization program.

    The staff within the CBR needs to have access to expert advice and assistance

    necessary to ensure effective implementation of reform and modernization initiatives

    and need to have a stronger sense of ownership and commitment to the reform and

    modernization program:

    staff needs to participate in the reform and modernization of their processes:

    relevant industries need to be consulted more well in advance of reforms: other

    government agencies need to be consulted more and areas of common activity

    simplified.

    The reform and modernization process requires including an external review of the

    changes and an external audit to ensure that the reform is cost effective and

    efficient.

    There is a need of developing a process review mechanism to ensure cyclical

    improvement: the processes have to be benchmarked with other administrations.

    Identification of compliant taxpayers is required for fast tracking their transactionsand targeting of risky taxpayers.

    26

  • 8/14/2019 Intergrity Management Guide (Final)

    27/70

    6. AUDI T AND INVESTIGATION

    The (Revised) Aretha Declaration states:

    The prevention and control of corruption in Revenue can be assisted by the

    implementation of a range of appropriate monitoring and control mechanisms such

    as internal check programs, internal and external auditing and investigation and

    prosecution regimes. Such regimes should strike a reasonable balance between

    positive strategies to encourage high levels of integrity and repressive strategies

    designed to identify incidences of corruption and to discipline or prosecute those

    personnel involved. Revenue personnel, taxpayers and the general public should be

    encouraged to report corrupt, unethical or illegal activity and when such information

    is provided it should be investigated in a prompt and thorough manner and sources

    should be protected. Where large scale or complex investigations are warranted or in

    administrations where corruption is widespread there should also be recourse to

    independent anti-corruption agencies.

    6.1 Mechanisms to detect and prevent corruption are a primary element of any

    corruption prevention strategy. Internal and external audits can review processes and

    procedures with the aim of focusing on areas that have a high risk associated with their

    function. Audits also provide an independent opinion regarding the efficiency and

    effectiveness of procedures and controls.

    6.2 The organization must have the necessary resources to follow up any information

    provided. This may require an internal affairs or investigation capability with sufficient

    independence and autonomy to allow it to undertake its investigations. People selected

    for such work must be given appropriate training and management support and be free

    of any integrity-related suspicions. There should be mechanisms in place to encourage

    staff and stakeholders to report corrupt practices, including confidentiality provisions.

    6.3 The syndicate deliberating on this issue rated the overall position of audit and

    investigation function at 2.33 (Annex F), highlighting the need for improvement.

    27

  • 8/14/2019 Intergrity Management Guide (Final)

    28/70

    6.4 The results on positive note indicate that effective internal audit and internal

    investigation/affairs units and programs are being re-engineered. In the field the

    inspections and examinations are subject to regular internal audit, peer review, and/or

    independent review. The results of audits are reported and regularly followed up for

    review. Special task forces exist to conduct unannounced inspections at high-risk

    posts: staff is aware of the positive role of the special task forces and where large-scale

    corruption is suspected or alleged, access is available to an independent anti-corruption

    investigation authority. The allegations of corruption are followed up and actions are

    taken as a result of audit and investigation.

    6.5 AREAS REQUIRING IMPROVEMENT: Despite above, the syndicate thought

    that much is still desirable on this count. Some areas identified for improvement are asfollows:-

    The role and functions of Audit, Inspection and Intelligence units need to be

    promoted within the organization, including procedures for reporting instances of

    alleged corruption.

    The people selected to perform Audit, Inspection and Intelligence functions need to

    be sufficiently trained, have appropriate powers of investigation and kept at arms

    length from the officials they are investigating.

    Sufficient audit program have to be in place to ensure regular review of high-risk

    work areas and functions.

    Data obtained from audits and investigations needs to be analyzed to identify trends,

    vulnerabilities, and opportunities for improvement: the extent to which major

    activities carry an inherent risk of corruption (dealing in cash, approving applications,

    etc.) need to be benchmarked and systems have to be put in place to identify and

    manage these risks.

    The general control environment (internal controls, audit trails, reporting

    relationships, level of staff competence, delegations etc.) require to be more

    conducive to maintaining high levels of integrity.

    Records of all high-risk decisions made by officials for later review and audit need to

    be kept and taxpayers, the general public and third parties such as banking

    28

  • 8/14/2019 Intergrity Management Guide (Final)

    29/70

    institutions need active encouragement to report instances of corruption or

    attempted corruption.

    Staff has to be made aware of the channels they should follow to report instances of

    corruption, while provisions have to be made to enable the staff to report instances

    of corrupt activities in a way that bypasses their immediate supervisor or work area,

    for example directly to an internal affairs unit.

    29

  • 8/14/2019 Intergrity Management Guide (Final)

    30/70

    7. CODE OF CONDUCT:

    The (Revised) Arusha Declaration states

    A key element of any effective integrity program is the development, issue and

    acceptance of a comprehensive code of conduct, which sets out in very practical and

    unambiguous terms the behaviour, expected of all Revenue personnel. Penalties for

    non-compliance should be articulated in the code, calibrated to correspond to the

    seriousness of the violation and supported by appropriate administrative and legislative

    provisions.

    7.1 A Code of Conduct describes the standards of behaviour and conduct required of

    employees to ensure that the integrity and good reputation of organization is

    maintained. An effective code of conduct must describe in very practical and clear termsthe standards of behaviour expected of all officials; and provide a guide to solving

    ethical issues for those working in the department and those who have dealings with

    officials.

    7.2 The Code should be regularly reinforced to staff. Management must lead by

    example and take appropriate action when staff falls short of the required standards.

    Appropriate conditions of employment, remuneration, and administrative and legislative

    provisions must support the practical implementation of the Code and be sufficient to

    provide a positive incentive. If a general civil service code exists, care should be taken

    to ensure the organizational specific code is complementary but does not replace the

    general code.

    7.3 The syndicate deliberating on this issue rated the overall position regarding Code

    of Conduct matters at 3.13 (Annex G). Although overall it was seen to be encouraging

    however, room for improvement was also felt in certain areas.

    7.4 The results on positive note indicate that the organization has a formal Code of

    Conduct: which provides guidance for dealing with ethical issues that are relevant to the

    different types of work carried out by staff. The code of conduct is readily accessible to

    all staff, and is periodically promoted within the organization and the staff is required to

    30

  • 8/14/2019 Intergrity Management Guide (Final)

    31/70

    sign a provision indicating that they have read and understood the Code, and accept its

    provisions, obligations and responsibilities. There are appropriate sanctions for non-

    compliance with the Code and effective disciplinary measures exist in the form of

    legislations such as Establishment code and the Removal from Service Ordinance

    (2001). The Code describes management and staff responsibilities in respect to the

    collection, storage, maintenance and dissemination of information obtained in the

    course of duty: and includes provisions related to the acceptance of gifts, rewards,

    hospitality and discounts: staff is required to declare their investments, assets,

    indebtedness and possible conflicts of interest. Procedures are also in place to

    investigate alleged or suspected breaches of the Code: members of the senior

    management team lead by example in a manner that is consistent with the spirit of the

    Code of Conduct: and the Code describes the values of the administration in a practical

    way.

    7.6 AREAS REQUIRING IMPROVEMENT: Following are some areas requiring

    improvement.

    It was felt that the new and existing staff needs to be given more extensive training

    in the application of the Code.

    Staff should be required to declare any financial problems or hardships they might

    be facing and appropriate mechanisms be put in place to provide financial support to

    officials facing temporary hardship in order to ensure that they are not tempted to

    engage in corrupt practices to overcome financial problems.

    Appropriate mechanisms needs to be devised for the staff to report suspected

    breaches of the Code.

    Supervisors and managers have to take appropriate action when staff falls short of

    required standards and breaches of the Code need to be fully investigated.

    There is also a need for considering the introduction of a limited amnesty as an

    element of the integrity strategy.

    Training through Directorates of Training in the code of conduct needs to be

    improved and accelerated with increased frequency.

    31

  • 8/14/2019 Intergrity Management Guide (Final)

    32/70

    32

  • 8/14/2019 Intergrity Management Guide (Final)

    33/70

    8. HUMAN RESOURCE MANAGEMENT:

    The (Revised) Arusha Declaration states:

    The implementation of sound human resource management policies and procedures

    plays a major role in the fight against corruption in Revenue. Human resource

    management practices which have proved useful in controlling or eliminating corruption

    in Revenue, include: -

    Providing sufficient salary, other remuneration and conditions to ensure officials

    are able to maintain a decent standard of living

    Recruiting and retaining personnel who have and are likely to maintain high

    standards of integrity

    Ensuring staff selection and promotion procedures are free of bias or favoritism

    and based on the principle of merit

    Ensuring that decisions on the deployment, rotation and relocation of staff take

    account of the need to remove opportunities for officials to hold vulnerablepositions for long periods of time

    Providing adequate training and professional development to Revenue personnel

    upon recruitment and throughout their careers to continually promote andreinforce the importance of maintaining high ethical and professional standards

    Implementing appropriate performance appraisal and management systems,

    which reinforce sound practices and which foster high levels of personal andprofessional integrity

    8.1 A key element in any effective integrity strategy or programme is managing the

    personal integrity of staff. People management is just as important as the reform of

    systems and procedures.

    8.2 Human resource policies should not only be aimed at recruiting the right people,

    but also improve staff skills, and provide a quality work environment which recognizes

    and supports the work efforts of staff. Just as a high standard of work performance and

    integrity is expected from staff, staff expects a high level of integrity in the administrationand implementation of associated HR polices and procedures which underpin the work

    environment.

    8.3 The issues of human resource management will be further discussed under the

    following headings:

    33

  • 8/14/2019 Intergrity Management Guide (Final)

    34/70

    Remuneration and conditions

    Recruitment, selection and promotion

    Deployment, rotation and relocation

    Training and professional development

    Performance management/appraisal

    8.1.REMUNERATION AND CONDITIONS

    8.1.1 Appropriate conditions of employment and in particular remuneration that can

    sustain a reasonable standard of living is extremely important.

    8.1.2 Remuneration may in certain circumstances include social benefits such as

    health care, housing, and/or incentive payments. Non-monetary rewards such as

    transfer, training, travel, praise, and publicity can also be used to encourage positive

    behaviour.

    8.1.3 Staff facing serious debt problems may be more vulnerable to corruption. When

    staffs are identified as facing severe financial difficulties they should receive counseling

    and close supervision, and where appropriate, transferred away from high-risk areas.In

    the opinion of Syndicate the situation of whole ambit of this area both collectively and

    individually needs improvement. With an overall rating of 2.34, it was observed that the

    staff does not receive sufficient remuneration to maintain a reasonable standard ofliving. Some specific weak areas requiring augmentation are as follows:-

    Weak Areas Requiring Improvement

    The remuneration levels for officials are not comparable to similar public/private

    sector positions and does not take into consideration the opportunity presented by

    work to supplement income through illegal commissions.

    Mechanisms are not available to identify signs of serious indebtedness of staff.

    The reward system and its fair administration scored very low indicating the need for

    its fair administration.

    The reward system needs to share the benefits widely amongst all staff that

    demonstrate appropriate ethical standards and encourage the development and

    34

  • 8/14/2019 Intergrity Management Guide (Final)

    35/70

    maintenance of high standards of work performance, rather than only recognizing a

    small number of those officials who work in a particular area where seizures and

    prosecutions are commonplace.

    The government needs to be made aware of the important role that condition of

    service, and in particular, adequate remuneration, plays in maintaining high

    standards of integrity.

    8.2.RECRUITMENT, SELECTION AND PROMOTION

    8.2.1 Recruitment and staff selection procedures should focus on selecting staff on the

    basis of incorruptibility as well as academic, professional and/or technical competence.

    It should also take into account the characteristics of honesty, dependability, and high

    standards of personal behaviour.

    8.2.2 Staff selection and promotion should be based on merit. The process should be

    objective and immune from interference. Each recruitment or promotion committee

    should be composed of independent members selected from different work areas of the

    organization. This arrangement can minimize the chance of nepotism and corruption.

    8.2.3 Examining previous employment records the element of honesty should be taken

    into account when screening potential staff. It may be necessary to use outside

    expertise to examine and suggest improvements to internal selection processes and

    procedures. This policy is particularly important for positions where the exercise of

    discretion is unavoidable and supervision is difficult.

    8.2.4 The syndicate showed satisfaction on situation in this area with an overall score

    of 3.31 and assigning 3 or more points to all except one question. It observed that the

    selection criteria is published and strictly adhered to for all vacancies: it focuses on high

    ethical standards as well as job specific knowledge and technical competence: the

    appointment and selection process is based on merit. The staff is fully aware of the

    selection process and results are communicated promptly: selection committees are

    impartial and their members are chosen on the basis that they come from different work

    areas. Qualifications are always checked: and the acceptance of the Code of Conduct is

    35

  • 8/14/2019 Intergrity Management Guide (Final)

    36/70

    a prerequisite for employment. However the extent of tolerance to conflicts of

    interest and permission to engage in secondary employment is a weak area,

    which requires attention.

    8.3. DEPLOYMENT, ROTATION AND RELOCATION

    8.3.1 The staffs that have remained in posts for a long period of time are more

    vulnerable to corruption. Removing opportunities for such staff to hold vulnerable

    positions for long periods of time is an important integrity measure. Decisions on

    posting of officials should be based on established objective criteria and the basis for

    posting decisions recorded.

    8.3.2 Attention should be paid to the design of jobs to ensure that individual officialsare unable to exercise discretionary power without reference to other officials. For

    example, in keeping with accepted accounting practice, officials should not be able to

    both initiate and certify payments.

    8.3.3 In cases where examinations or inspections need to be undertaken, allocation to

    individual officials may be made on a random rather than on a commodity, industry or

    geographical basis.

    8.3.4 The conduct of examinations or inspections can also be subject to regular peer

    and independent review.

    8.3.5 In the opinion of the conference situation in this area also needs improvement.

    With an overall score of 2.37, the participants acknowledged that the working

    environment fosters the development of an inappropriate relationship between

    staff and taxpayers. The following are some specific areas requiring

    improvement.

    Weak Areas Requiring Improvement

    The rotation guidelines are not clear and rotation/mobility needs to be more clearly

    understood.

    36

  • 8/14/2019 Intergrity Management Guide (Final)

    37/70

    Consideration has to be given to a separate rotation scheme for technical positions.

    Rotation policy needs to be enforced fully and subject to independent review.

    Established mechanisms require to be in place to oversee the rotation of staff at

    regular intervals and this process needs to be free of bias or favoritism. Mechanisms are also required to be in place to ensure suitable control,

    accountability and supervision of staff working in vulnerable environment for e.g. at

    point of interaction with the public such as passenger and cargo control points.

    Mechanisms are required to prevent prior knowledge that particular officials will

    perform particular functions at certain times: and functions segregation in areas that

    are vulnerable to corruption is required.

    8.4.TRAINING AND PROFESSIONAL DEVELOPMENT

    8.4.1 Education and training, both informal and formal, play a major role in the fight

    against corruption. This is particularly appropriate when an organization has in place a

    formal Code of Conduct. Training should focus on the standards of behaviour expected

    of all staff and the mechanisms available to report breaches of the Code. A sense of

    group or shared responsibility should be fostered wherever possible.

    8.4.2 While on-the-job training is very important, care needs to be taken to ensure it is

    both positive and structured and does not inadvertently reinforce certain inappropriate

    practices that have developed over time.To maintain the credibility of the informal and

    formal training that is provided, it is essential that the content of the training accurately

    reflect what is happening on the job.

    8.4.3 In the opinion of syndicate, this area also bore a weak situation with an overall

    ranking of 2.64. Though the syndicate noticed that the CBR provides formalprofessional training and structured on-the-job training for staff covering both general

    and specialist skills but a number of specific areas were identified for more concerted

    actions. These include:-

    37

  • 8/14/2019 Intergrity Management Guide (Final)

    38/70

    Weak Areas needing improvement

    All formal training should cover and reinforce the integrity/anti-corruption message

    and focus on the standards of behaviour expected of all officials.

    New recruits should specifically be given introductory training regarding integrity

    principles/Code of Conduct in the organization.

    On-the-job training should be structured to reinforce the integrity policies of the CBR.

    There should be a program of succession planning to ensure that the administration

    does not become over-reliant on a few key individuals.

    The effectiveness of training should be periodically evaluated.

    Responsibilities and accountabilities for corruption prevention and detection should

    be clearly identified and understood by all staff and these responsibilities should

    include identifying and correcting any behaviour that falls below expected standards.

    The performance management/appraisal system should identify development needs

    and reinforce integrity principles.

    Local operating practices should be consistent with the content of formal training

    programs.

    8.5.PERFORMANCE MANAGEMENT/APPRAISAL

    8.5.1 A performance appraisal and management system concerns the day-to-day

    management of people and their performance. Performance appraisal is a process

    where managers can assess the performance of staff, identify developmental

    opportunities, recognize and reward staff for good work, and contribute to the

    achievement of an organizations goals.

    8.5.2 Performance appraisal can also provide incentives for model behaviour by

    reinforcing the desired workforce characteristics and conduct. Regular appraisal

    encourages staff to take responsibility for maintaining high levels of personal and

    professional integrity.

    8.5.3 The performance appraisal process should be linked to a comparable reward

    system. This may include salary advancement, as well as non-monetary rewards such

    38

  • 8/14/2019 Intergrity Management Guide (Final)

    39/70

    as transfer, training, travel, praise, and publicity to further encourage positive behaviour.

    Such rewards may recognize immediate good performance, however the appraisal

    system should be designed with the aim of optimizing staff performance in the long

    term.

    8.5.4 Performance appraisal should be undertaken on a regular basis. Management

    should be accountable for the performance of their staff and actively manage

    performance issues.

    8.5.5. With an over all score of 2.98, situation in this area was found by the syndicate,

    to be hanging in balance with a set of almost equal strong and weak points. It was noted

    that although a customary annual reporting system is in place (which is undertaken on a

    regular basis) with demonstration of a high level of personal and professional integrity

    specifically included as an appraised quality, but a CBR specific performance appraisal

    system is a prerequisite for management of its HR on modern lines.

    AREAS REQUIRING IMPROVEMENT:

    The syndicate observed that the reward system needs to be linked more closely to

    the performance appraisal system which needs to be more fairly administered and

    regularly monitored and reviewed. The reward system should share the benefits widely amongst all staff that

    demonstrate appropriate ethical standards and encourage the development and

    maintenance of high standards of work performance, rather than only recognizing a

    small number of those officials who work in a particular area where seizures and

    prosecutions are commonplace.

    The performance appraisal system should link performance to the CBR's Code of

    Conduct and staff should have the opportunity to challenge their performance

    assessment if they disagree with any aspect of their appraisal.

    39

  • 8/14/2019 Intergrity Management Guide (Final)

    40/70

    9. MOR ALE AND ORGANIZATIONAL CULTURE:

    The (Revised) Arusha Declaration states:

    Corruption is most likely to occur in organizations where morale or esprit de corps islow and where Revenue personnel do not have pride in the reputation of their

    administration. Revenue employees are more likely to act with integrity when morale is

    high, where human resource management practices are fair and where there are

    reasonable opportunities for career development and progression. Employees at all

    levels should be actively involved in the anti-corruption program and should be

    encouraged to accept an appropriate level of responsibility for the integrity of their

    administration.

    9.1 Before organizational change can occur, it is firstly necessary to understand the

    culture and practices that currently exist within the administration and determine the

    most appropriate methods for achieving real and sustained improvement. The extent of

    the changes necessary must be based on the administrations current situation and its

    capacity to appropriately support and embrace the necessary cultural change.

    9.2 Changes in attitude and organizational culture are extremely difficult to achieve,

    particularly when corruption is widespread or endemic. Without change, however, even

    if those guilty of corrupt behaviour are replaced, corruption may occur with their

    replacements. Improving organizational culture in a way that staff has pride and loyalty

    in the service is vital for breaking this cycle. For this purpose, staff and staff associations

    should be actively involved in this process.

    9.3 The syndicate assigned an overall score of 2.52 to the questionnaire relating to

    morale and organizational culture (Annex I). On the positive note it observed that the

    senior management leads by example and demonstrates their commitment to integrity

    and fairness through their behaviour and its decision-making which is both open and

    transparent. The CBRs systems and culture recognizes and respects the rights of staff

    and the need for fairness in all human resource management matters: staff are

    recognized or rewarded for performance and the penalties for corrupt behaviour are

    40

  • 8/14/2019 Intergrity Management Guide (Final)

    41/70

    also sufficient to deter inappropriate behaviour. However a wide room for improvement

    was also identified.

    AREAS REQUIRING IMPROVEMENT:

    The following are some areas identified by the syndicate as requiring further

    improvement:-

    It was felt that staff needs to be more encouraged, recognized, acknowledged or

    rewarded for identifying methods by which corruption can occur and for suggesting

    improved control mechanisms.

    Special project teams need to be used to develop integrity strategies for their work

    areas and all staff needs to have the opportunity to contribute.

    Activities are required to be undertaken to measure levels of morale, such as staff

    surveys to gather feedback and provide suggestions.

    Mechanisms need to be available in which staff can raise, discuss and resolve any

    cultural and/normal issues which impact on the CBRs anti-corruption efforts.

    Meetings and staff journals are required to be used to communicate the standards of

    behaviour expected, reporting instances of meritorious behaviour, and exposure of

    those found to be involved in corruption.

    Internal communication mechanisms need to be developed to discuss integrity andethical issues and cases of corruption openly.

    Prompt action needs to be taken against those who fail to meet integrity standards

    and more effective legislation needs to be in place that protects staff who report

    breaches of integrity.

    Staff at all levels needs to be encouraged to identify and report breaches of integrity

    and the staff that comes forward to report corrupt practices should be rewarded

    rather than victimized.

    41

  • 8/14/2019 Intergrity Management Guide (Final)

    42/70

    10. RELATIONSHIP WITH THE PRIVATE SECTOR:

    The (Revised) Arusha Declaration states:

    Revenue administrations should foster an open, transparent and productive relationshipwith the private sector. Client groups should be encouraged to accept an appropriate

    level of responsibility and accountability for the problem and the identification and

    implementation of practical solutions. The establishment of Memoranda of

    Understanding between Revenue and industry bodies can be useful in this regard.

    Likewise, the development of codes of conduct for the private sector, which clearly set

    out standards of professional behaviour, can be useful. Penalties associated with

    engaging in corrupt behaviour must be sufficient to deter client groups from paying

    bribes or facilitation fees to obtain preferential treatment.

    10.1 It is important to focus attention on the central role that client groups play in

    controlling corruption. After all, many forms of administrative corruption require the

    active involvement of external partners.

    10.2 Performance standards and/or client service charters may provide a useful

    starting point and a practical monitoring mechanism. When undergoing a major integrity

    program it may be useful to have feedback through client surveys on their perceptions

    of service quality and operating effectiveness. This may be in addition to the quantity

    and timeliness standards that are measured under a client service charter.

    10.3 Liaison committees can provide an important vehicle for administrations to clearly

    communicate the standards of behaviour expected of taxpayers. It may be appropriate

    to establish a joint organization/client anti-corruption task force to identify practical

    solutions and identify corrupt officials. Co-operative mechanisms can be established

    with industry groups, to encourage the provision of information to identify unusual or

    suspicious activity related to illegal activities such as drug trafficking and money

    laundering.

    42

  • 8/14/2019 Intergrity Management Guide (Final)

    43/70

    10.4 Taxpayers, the general public and third parties such as banking institutions and

    trade associations can provide potential sources of information about an organizations

    most vulnerable points, or indeed, about actual instances of corruption. Providing

    guarantees of anonymity can facilitate the provision of information, as can setting up a

    hotline and a complaints and compliments system. Information received needs to be

    thoroughly investigated, and it should be clearly apparent that the administration has

    responded effectively.

    10.5 A comprehensive communication strategy could include setting up Customer

    Information centers and hotlines to provide information on all processes and

    procedures, information leaflets/official notices, as well as promoting the achievements

    of organization via the media. These initiatives need to be well publicized and easilyaccessible.

    10.7 AREAS REQUIRING IMPROVEMENT: With an overall rating of 2.32 (Annex J),

    the syndicate felt that almost the entire ambit of this area needs serious thoughts.

    The areas which require augmentations are as follows:-

    All relevant stakeholders and taxpayers need to be identified and their support and

    co-operation be obtained. The client groups need to accept a share of responsibility for both the problem and

    the solution.

    Appropriate consultative mechanisms needs to be established to facilitate

    communication and co-operation between and client groups.

    Major client groups need to be involved in the development of CBRs

    administrations anticorruption strategies.

    Formal co-operative arrangements are required to be established with industrybodies which can deliberate on all important issues affecting the stakeholders.

    There is a need for development of codes of conduct for the private sector, which

    clearly set out standards of professional behaviour.

    43

  • 8/14/2019 Intergrity Management Guide (Final)

    44/70

    When corrupt practices are detected involving members of client groups the

    taxpayers should be penalized for engaging in such behaviour and the penalties

    imposed should be sufficient to deter future violations.

    The taxpayers, the general public and third parties such as banking institutions need

    to be actively encouraged to report instances of corruption or attempted corruption.

    Mechanisms are required to be in place to report instances of corruption, such as

    through hotlines or a complaints and compliments system and these mechanisms

    need to be regularly promoted to stakeholders.

    Some form of guarantees/commitments should be provided to taxpayers and third

    parties that any information provided will be treated confidentially and these

    commitments should be honoured.

    Mechanisms are also required to be in place to investigate information provided to

    from third parties: taxpayers should accept their share of responsibility for

    maintaining a corruption free environment: and there should be a client

    communication strategy to not only provide information to taxpayers, but also

    promote the achievements of Division.

    44

  • 8/14/2019 Intergrity Management Guide (Final)

    45/70

    Part 3 THE ACTION PLANNING PROCESS

    The self assessment arrived at in the last section was subsequently prioritized toascertain the important opportunities/problem areas that were identified during theprocess. The identified areas were prioritized on the basis of the following criteria:

    Importance Urgency Consequence of failure Probability of obtaining executive and staff commitment Impact National/International obligations Ease of implementation Cost

    3.1 Action Plans

    After prioritization action plans were developed by the participants for some of thehigh priority areas including a decision for its implementation leadership andtimelines for achieving the desired results. They are as follows:-

    3.2 Immediate and most important action Plans and implementation Leaders

    1. Formal review of procedures and systems on at least annual basis in consultationwith field formations: (Member Legal in consultation with Member TP&R)

    2. Simplification of procedures, facilitation of stakeholders and quick disposal of

    complaints and regular surveys to seek feedback of stakeholders. (Member FATE,Member FR&S and Reps of line members)

    3. Effective and comprehensive internal controls should be tested and put in place toprevent corruption. Information should be obtained and analyzed to identify trends,opportunities, vulnerabilities with a view to improvement. (Member Audit, DGs I&A,DG I&I & reps of line members).

    4. Automation of Business processes and systems as per international standards to bereviewed by an external independent agency. ( Member TP&R, Member IMS,Member FR&S)

    5. Development of codes of conduct for the private sector, which will clearly set outstandards of professional behaviour. (Member FATE & Reps of Line Members)

    6. Appropriate result-focused performance standards and indicators to be establishedand regularly monitored. (Member FR&S and reps of other wings)

    7. . Reactivate Cabinet Committee on Financial Reforms. (Chairman)

    45

  • 8/14/2019 Intergrity Management Guide (Final)

    46/70

    8. Revise/Improve Code of Conduct (Member HRM)

    9. Regular meetings with field officers/staff to educate them on integrity & reforms (AllMembers & Communication Specialist).

    3.3 Syndicate Wise/Topic Wise Detailed action plans

    (SYNDICATE A)Leadership and Commitment

    Short Term Measures Long Term measures

    1. Change in CBR Act (Rules)2. Reactivate Cabinet Committee on Financial

    Reforms (CCFR)3. Communication plan

    4. Implementation Plan5. Top Leadership to be briefed about the

    integrity Policy6. Superior Judiciary to be briefed7. Fixed Tenure of Chairman for 5 years

    Federal Board of Act

    Code of Conduct

    Short Term Measures Long Term measures

    1. Formalize/regularize Training

    2. Circulate/disseminate/communicate Code Of Conduct3. Urdu Translation for lower staff4. VCDs/media to ensure implementation

    Audit/Inspection authorized to

    conduct/supervise checks/auditto check implementation.

    Violators of Code Of Conduct to

    be de-notified from special pay

    DGs to check & enforce Code

    Of Conduct

    46

  • 8/14/2019 Intergrity Management Guide (Final)

    47/70

    Morale & Organizational Culture

    Short Term Measures Long Term measures1. Subsidised TransportPick & Drop.

    2. Medical Insurance3. CBR Housing Society4. Training in Decision Making5. LUMS6. IBA7. Participatory Work environment8. Physical Environment9. Work ethics

    10.Quick Promotion of all levels/eligibleemployees11. Merit/integrity/competency based

    promotions(New PMS)12.Timely completion of PERs

    Housing/ accommodation

    Expansion of CBR House

    CBR Colony at Islamabad

    CBR Foundation

    (SYNDICATE B)Regulatory Framework

    Short Term Measures Long Term measures

    1. All the Risk Management Systems for alltaxes should be supported by automatedsystems.

    2. (Quarterly meetings should be held withother concerned government agencies)

    3. Base line surveys of performancemeasurement should be done across alltaxes and then later (yearly) surveys tocompare with the base line to determineefficiency.

    4. The same should be published yearly in

    CBR year Book.

    1. BPR teams should beinstitutionalized to ensurecontinuous improvement at CBRlevel.

    2. Risk Management should bedeveloped /applied across alltaxes

    47

  • 8/14/2019 Intergrity Management Guide (Final)

    48/70

    Transparency

    Short Term measures Long Term measures

    1. Periodical surveys should be conducted to

    ascertain the clients requirement ofinformation.

    2. Simplified and realistic procurementprocedures should be devised andimplemented. All taxes should devisemechanisms to determine that if their lackof compliance is due to a lack ofcommunication from the respectivedepartment.

    3. Sufficient infrastructure/manpower beemployed to conduct meaningful audit and

    investigation.4. Each Wing should develop a

    library/database of decisions.5. Simplified and realistic procurement

    procedures should be devised andimplement.

    6. CBR needs to develop a system forensuring consistency/ informality in alltaxes through out the country. To beexecuted at the CBR by each tax wing.

    7. Staff should be trained in the service

    charters.

    1. CBR needs to develop systems for

    ensuring consistency/uniformity inall taxes throughout the country. Tobe executed by each tax wing.

    2. Each Wing should develop a Library/Database of decisions (long termavailability on internet)

    Audit & Investigations

    Short Term measures Long Term measures1. Officials should be properly trained to handle

    corruption complaints and CBR to take strongaction where gross violation of law andprocedures are established.

    2. Data should be obtained and analyzed toidentify trends, opportunities, vulnerabilitieswith a view to improvement.

    3. Effective and comprehensive internal controlsshould be tested to prevent corruption.

    4. Decisions should be recorded and archivecreated for important decisions.

    Risk based Audit programme shouldbe devised and implemented.

    48

  • 8/14/2019 Intergrity Management Guide (Final)

    49/70

    5. Private sector should be encouraged to reportany instances of corruption ensuring itsconfidentiality and secrecy.

    6. Mechanisms be put in place to encourageofficials to report corruption to the identified

    authority.

    Syndicate-C

    Reform & modernisation

    Short Term measures Long Term measures

    1. Upgrade and Debug2. TMS/STMS/ONE REVENUE

    1. Replace with ITMS/PACCS

    3. Implement TMS and STMS 2. Replace with ITMS/PACCS

    4. Data cleansing and matching,updating and conversion inelectronic format

    3. 100% reliable data base

    5. Conceptualization of DWH 4. Development of DWH

    6. Develop Audit trail 5. Fully implement audit trail by ITMSand PACCS

    7. Intensive hands on training of staffon IT Systems

    6. Education of personnel inadvanced courses to reach and

    sustain a paperless environment

    Automation

    Short Term measures Long Term measures

    1. E-filing by tax payers 1. Full implementation

    2. CPR generation (Pilot) 2. Full fledged CAP implementation

    3. Existing code of conduct of CBR

    employees to be revised andextended

    3. Code of conduct for private sector

    to be developed and implementedin consultation with private sector

    4. Education of trade and industry,sensitizing the need for reciprocity.

    5. Make a clear distinction betweenfacilitation for compliant taxpayersand strict enforcement for non-compliant taxpayers

    4. Seeking political will for effectiveenforcement.

    49

  • 8/14/2019 Intergrity Management Guide (Final)

    50/70

    Relationship with the Private Sector

    Short Term measures Long Term measur