Article April 17th, 2023
Lessons on how to make tax collection simple, safe and transparent
We recently completed a long-running program with the Government of Botswana to bring the country’s tax management and collection system online, making it fast, easy and efficient for companies and citizens to declare and pay tax.
The digital transformation work started a decade ago when we implemented an electronic tax filing system for the Botswana Unified Revenue Service (BURS), and a full tax management and revenue collection system is now in place. The results speak for themselves: companies and private individuals can now file and pay their taxes in five minutes, and Botswana has substantially reduced its tax gap.
The project offers a number of positive lessons for other governments seeking to make tax collection simple, safe and transparent – our project delivery manager Jacob Tshube shares what he has learned.
Can you describe the public finance management situation in Botswana when Nortal first started working with BURS?
Before BURS introduced the first electronic filing system in 2014, small business owners would have to go to a BURS office every month and spend a full day waiting in line to file their VAT returns. Even more frustratingly, the paperwork was very complicated, so most entrepreneurs ended up paying a tax agent $150 each visit, to help them file the documents correctly.
Now, we estimate it takes a first-time user about ten minutes to file their information via the BURS online portal and no more than five minutes for experienced users.
What did the Government of Botswana want to achieve with the digital transformation?
BURS’ objectives were clear from the outset: increased revenue collection, better customer service and a reduced burden on the taxpayer, operational efficiency and enhanced management decision-making, lower operating costs, and of course compliance with Botswana’s tax laws.
The transformation was also carried out in line with BURS’ values of integrity, accountability, innovation, and “botho” – a cultural concept in Botswana based on mutual respect and trust.
– Jacob Tshube, Project Delivery Manager
For a transformation project, it’s important to keep an agile and innovative mindset, and be open to adjusting business processes to take advantage of new capabilities introduced by technology.
Nortal has been working with BURS for a number of years – what were the main stages of the digital transformation?
Our first project was to set up the e-filing system in 2014 and following on from that, we were asked by BURS in 2017 to create a full tax management and revenue collection system, which was in place by 2020. That replaced Botswana’s tax system entirely, changing the tax authority’s work processes and creating new areas of responsibility including risk management.
Alongside the technical implementation, and following on from it, we have been working with BURS in a support role to ensure the team gets the best out of the software. This has included adding and improving features over time – for example, we put in place extended features for corporate income tax returns, including Directors’ Fees and Foreign Dividends, in December 2022 on a tight schedule.
Can you describe some of challenges along the way?
Our main challenge during the time we were implementing the tax management and revenue collection system was COVID-19, which resulted in the project being extended for almost a year beyond the initial schedule. Pandemic restrictions disrupted travel arrangements for the delivery team, resulting in only two team members working on-site during the go-live and everyone else having to support it remotely.
And as with all software projects, with more time, we could have done even more!
What advice would you share with other governments considering such a transformation project?
There will be substantial changes to a tax authority’s ways of working as a result of digital transformation. Firstly, it’s important to keep an agile and innovative mindset, and be open to adjusting business processes to take advantage of new capabilities introduced by technology. Secondly, tax authorities need to have the time and the budget for training their teams to use the new system and, thirdly, it’s essential to maintain data quality. Without that the best system in the world won’t give you the results that you want.
At the big picture level, it’s important for governments to go into tax management transformation with very clear objectives, as BURS did, and to keep sight of them throughout the work.
For more information about the BURS project and the impact it created, read our Botswana case study.
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