4 YEARS AS THE HEAD OF FIRST TAX ADMINISTRATION IN BURUNDI (OBR)

Bujumbura, June 9th 2014

CREATION OF THE OBR • OBR became the principal agent for tax collection in

Burundi following enactment of the 2009 legislation.

The OBR mission is to assess, collect, and comprehensively administer and account for all the tax and customs revenues

Although the OBR is the agent for tax collection, the Ministry of Finance (MoF) determines tax policy. The OBR is obliged by contract with the MoF – the contrat de performance – to meet strict performance targets,

MY APPOINTMENT IN JUNE 2010• The UK’s Department for International Development (DFID)

supported the creation of the new institution and this support was then passed on through TradeMark East Africa (TMEA).

• After competition, I was appointed as the First Commissioner General of the Office Burundais des Recettes on June 16, 2010

• Courageous decision by the Government to appoint an expatriate as the head of the tax administration in Burundi

STATUS AT MY ARRIVAL• Only the EMT and SMT members were already appointed• In other words, OBR had no staff• Old fashioned and outdated tax laws• Negligent behavior and corrupt tendencies amongst OBR

officers; • Closed offices contributing to corruption• Resistance to change• Most of the OBR activities were manual• Poor working conditions ( No computer, few desks for staff) • Trade facilitation programs inexistent• No clear vision and mission of the institution

STATUS AT MY ARRIVAL- PART 2• Old fashioned revenue collection systems and procedures • No Code of Conduct• Communications deficit • No capacity building Plan• OBR working in different sites • No collaboration or consultation with the private sector• Very Poor service delivery• Last but not least, revenue collection Bif 301 billion

MY FIRST TASKS

•Build the tax administration from scratch;

•Sit with my senior staff and design the first five year Corporate Plan.

OTHER PRIORITIES• Get the technical assistance to support OBR; • Eradicate any kind of corruption in the institution, starting

with establishing a new Code of Conduct and an obligation for any OBR staff to declare assets

• Convince the OBR Board and staff to have open plan offices to reduce corruption

• Recruit more than 400 staff in a open, transparent manner;

2. Domestic resistance 3. Donor resistance 4. Way forward1. Building tax systems

WAS IT EASY TO INTRODUCE ALL THESE REFORMS?THE ANSWER IS NOAt the beginning of any kind of reform, people tend to resist to change However, with time and seeing the excellent results, I began to feel a sense of ownership

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.• George Bernard Shaw

REVENUE COLLECTION FROM 2009 TO 2013

• From 2009 (our baseline) to 2013, revenue increased from BIF 301.21bn to 559.51bn, i.e. an 85.75% growth rate

• For the second time in a row, OBR has collected Half-a-Trillion Burundi Francs.

• This milestone has been reached in November and this is the first time ever in Burundi these results are achieved in such a short period of time.

• The graph below illustrates this increase

GRAPH ( FROM 2009 TO 2013)

301363

472527

560

0

100

200

300

400

500

600

2009 2010 2011 2012 2013

OBR revenues (BIF bn)

REVENUE COLLECTION AT THE END OF MY CONTRACT• Revenue collection results for May 2014 show that OBR

collected BIF 40.30bn.

• Cumulatively, OBR has now collected BIF 241.16bn since the beginning of 2014. This is 3.59bn above cumulative targets (+1.51%) and 21.07bn above cumulative 2013 results (+9.72%).

• OBR is now on track to collect in six months revenues that used to take a year to be collected in 2009, before the creation of OBR.

OBR contribution to public expenditure

50%

55%

60%

65%

70%

75%

80%

200

300

400

500

600

700

800

2009 2010 2011 2012 2013

OBR

's co

ntrib

ution

rate

BIF

bn

OBR's contribution to total public expenditure

OBR collection (A)

Total public spending domestically financed (B)

OBR contribution (A/B)

NON REVENUE ACHIEVEMENTS• Doing Business Index: Burundi advanced 19 places in the

World Bank’s Doing Business Index and, for the third year in a row, placing the country amongst the top ten best reformers in the world. OBR has played an active part in this achievement by working closely with other agencies. Most notably, it carried out the establishment of the Single Window for Business Registration, the creation of three new OSBPs and the development of new tax procedures derived from new modern tax laws.

FIGHT AGAINST CORRUPTION- EABI REPORT

Trade facilitation• It is now possible to register a business inside one hour in

Burundi – a huge advance on the time taken previously.• ASYCUDA World computer system (Automated System for

Customs Data) became fully operational in May 2013. This gave the traders the possibility to conduct customs clearances online. Additional systems were rolled out and these enable online communications from Burundi all the way to the ports of Mombasa and Dar es Salaam

• We now have a much simplified tax system with lower tax rates in line with the rest of East Africa and we have removed many small taxpayers completely from taxation.

Trade facilitation initiatives • One Stop Border Posts –These are currently located at the

borders of Kobero, Gasenyi and Ruhwa. These sites were selected to enhance trade facilitation by combining border control activities at one location, share border control data, and reduce the time it takes to clear passengers and goods at the border

Trade facilitation initiatives-Part 3• AEO: Aimed at establishing a partnership with

International Trade Operators to secure and facilitate global trade. OBR Customs are now in a better position to exercise controls on imports and exports without compromising trade facilitation and security

• The EAC’s Single Customs Territory was adopted. As a result, all 5 EAC Revenue Authorities are now working on integrating customs clearance processes and reducing internal border controls on goods moving between Partner States

Modernization of HR• Initiated a new OBR structure taking into account the needs

of the organization and the best practices ; • Institutional Restructuring and right-sizing; • New HR policies and procedures introduced; • Leadership and Management Training : two leadership

development programmes were designed and facilitated by advisers between 18 and 26 August 2012. All OBR Commissioners and Directors participated in this course;

Improved Communication• Series of education and sensitisation campaigns is now underway to address

the wide range of target audiences identified which includes the general public, media, specialised and technical groups and public officials. 

• Employing a unique range of communications tools to aid this - leaflets, banners, flyers, public service announcements, media slots, radio dramas, seminars and workshops, door-to-door campaigns and market-place visits.

• OBR’s recently launched pilot Call Centre operation;

• a monthly newsletter targeting government officials and other external audiences and

• OBR website operational in both English and French versions;

• I take this opportunity to thank the USAID and TMEA for its support to improve OBR Communication Strategy

Quarterly briefing with media

Computerisation of the OBR services• With UNCTAD technical assistance, the old Asycuda ++ was

been upgraded to the most recent version, which is Asycuda World

• A commercial ERP software was selected and implemented to manage Finance, HR, Payroll and Procurement

• Taxpayer registration is managed by the systems in place in the Domestic Tax Department and a Revenue Collection System has been developed internally as an interim solution

• This will be replaced after the selection and implementation of a new Integrated Tax Administration System (ITAS) that is planned for Phase Two.

Focus on training• A training department was created • OBR has new staff who constantly need to be trained; • Sister Revenue authorities have supported OBR • In 2013, 386 employees, or 61.9% of the total received

training on various topics to improve the skills of the OBR staff

• The next step is to have a recognised training Institute

WAY FORWARD• With my contract coming to an end in few days, I wish all the

best to the next Commissioner General of the OBR• I hope the positive results ( both in terms of revenue

collection and other reforms) that have been achieved will continue to go on,

• OBR is now on track to collect in six months revenues that used to take a year to be collected in 2009

• I expect that in 2019, OBR will collect 10 times what used to be collected in 2009 ( This is possible, case study : Rwanda Revenue Authority)

THANKS TO • Government and Ministry of Finance

• TradeMark East Africa, who provided support in the areas of technical assistance, computer systems and hardware, One-Stop Border Posts and other infrastructural enhancements;

• Co-operation, UK Aid and USAID and also to our many other partners, such as the IMF, the World Bank and the African Development Bank;

•  The OBR Board, OBR Staff, Media, taxpayers, private sector, civil society

TEAM EFFORT• None of the gains made would have been possible without the hard work and team work. This is our great strength. The excellent working teams we have created (EMT, SMT and Advisers) plus the atmosphere of trust and common purpose has really driven the OBR to the success it has demonstrated.

MURAKOZE CANE