Leadership and Change

The Revenue Story

Commissioner Josephine Feehily

Leadership and Change

The Revenue BusinessThe Revenue OrganisationThe Story of a Change ProgrammeThe role of PMDSThe Labour Relations Commission

Revenue – a Big Business 2.8 million items of correspondence 2.9 million external emails 700,000 personal callers 4.3 million telephone calls 4 million visits to www.revenue.ie 4.2 million payments 3.5 million tax and customs returns 250,000 vehicles registered 50,000 plus new business registrations

Revenue – the Organisation

Tax and Customs Largest Department in the Civil Service 6,500 employees 130 offices/26 locations 2.8 million customers Annual revenues: €42 billion (repay €4bn) Budget to run the Office - €387 m Cost of admin: 0.85% of gross revenues

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Male 42.9%

Female 57.1%

Full time 82%

Job Sharing 9.7%

Work-sharing 8.3%

< 20 0.1%

21-30 13.1%

31-40 19.8%

41-50 44.6%

51-60 20%

>60 2.4%

Age ProfileGender Balance

Work arrangements

Gross Revenue Receipts

0

5

10

15

20

25

30

35

40

45

50

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Billions

Cost of Administration as a percentage of Gross Revenue Receipts

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Indications of Scale of Revenue Business (1995 & 2003)

0

1

2

3

4Millions

1995 235,000 578,214 500,000 1,700,000

2003 368,000 1,089,560 1,000,000 3,700,000

IT Returns VAT Returns (1996 & 2004)

Customs Declarations

Payment Items Rec'd

Electronic Services

Payment Returns Received

% of Total

Income Tax 159,478 53%

Corporation Tax 30,151 18%

VAT 136,246 13.37%

PAYE 133,000 8.36%

VRT 147,637 79.08%

SAD’s 912,000 91.82%

The TheoryMichael Collins:

“An integrated Customs and Tax organisation responsible for all the nation’s revenues and frontier control”

A Board of Revenue Commissioners to oversee the organisation

The Reality 1923 - 2003 Separate tax and customs Depts Roots going back to Middle Ages Different and deeply established

cultures Different information systems –

difficult dialogues Separate grade streams, promotion

systems and even magazines Multiple “Head Offices” But why change?

Most things were going well!

Tax receipts rising Self-assessment big success Customer service accolades

So nothing really broken?

Environment Had Changed

Single Market Economic growth/Wealth New business models More Sophisticated Citizens Public Sector Reform Some Doubts about Compliance

Strategy was Clear

It’s all about compliance!

Maximise voluntary compliance through best possible service

Enforcement – a sharp response to those who do not voluntarily comply

The Organisation?

Both approaches are about the Customer

We were organised by tax/duty Cumbersome management structures Poor Accountability

Creating a climate for change

Statement of Strategy Align the organisation with the

business “….review to ensure that we have

the best structure to complement our Programmes”

The Review

In House Control Internal representative team No “consultants” reforming us Keep powerful people in the tent Confidential interviews Slow, steady engagement All in the loop – no ‘inner circles’ Consensus building

Creating a climate for change

Building a Senior Management Team (MAC)

Permitting Dissent Encourage a corporate view Provide a non-confrontational

environment to surface issues “The Status Quo is not an option!”

The Decision A more flexible focussed

organisation Re-build Revenue around our

strategy for compliance Operational Divisions – dealing with

all taxes and duties for their cases Supported by a streamlined

National Office…/

The Heads of Operational Divisions would have clear responsibility and authority

A move from central (Dublin) command and control

Move to a single staffing stream

From this …

C&E Collections Division

C&E Enforcement Division

Customs & Residence Division

Information & Communications Technology Division

Revenue Solicitor

C&E Collections Division

C&E Enforcement Division

Customs & Residence Division

Information & Communications Technology Division

Revenue Solicitor

Chief Inspector of Taxes

Taxes Audit & Investigation

Taxes Customer Services & Technical Services

Direct Taxes Policy & Legislation Division

Direct Taxes International & Administration Division

Collector General’s Office

Chief Inspector of Taxes

Taxes Audit & Investigation

Taxes Customer Services & Technical Services

Direct Taxes Policy & Legislation Division

Direct Taxes International & Administration Division

Collector General’s Office

Corporate Management Division

Human Resources Division

Indirect Taxes Policy & Legislation Division

Capital Taxes Division

Corporate Management Division

Human Resources Division

Indirect Taxes Policy & Legislation Division

Capital Taxes Division

Chairman

Commissioner Commissioner

Chairman

Commissioner Commissioner

Strategic Planning

Information, Communications Technology & e-Business

Human Resources

Border Midlands West Region

Investigations and Prosecutions

Revenue Solicitor

ChairmanFrank Daly

Commissioner CommissionerJosephine Feehily Michael O’Grady

ChairmanFrank Daly

Commissioner CommissionerJosephine Feehily Michael O’Grady

Customs Operations Policy & Evaluation

Debt Management (Collector General)

Direct Taxes Interpretation & International

Direct Taxes Policy & Legislation

Indirect Taxes

Dublin Region

East & South East Region

South West Region

Large Cases Division

To this …..

Taxes & Duties

Customers

East & South East Region

South-West Region

Border Midlands West Region

DublinRegion

From this …. To this ….

Taxes & Duties

From this (Customer View – 2000)

Taxpayer(e.g. Publican)

CRO

Start up Visit

Tax Clearance

VAT Certification

Payments

Refunds

Inspection

Admin. Policy

PAYE / PRSI

ExciseLicence

CG’s CI’s Local Coll.

Nenagh

CustomHouse

EFT

P35’s TFA’s

Payments

Returns (All)

CI’s CG’s

Local Coll.

Enforcement

Enforcement

CI’s

CG’s

LocalColl.

Enforcement

Income Tax

Corporation Tax

Same as for VAT

Claims, reliefs,allowances, entitlements, etc.

VRT

Vat Refund

BIK

CI’s

CG’s

C&E

*Majority of cases have no import/export transactions and no or infrequent Stamp Duty transactions. For most cases contact is limited to the District and the Collector General/ROS

To this (Customer View – 2005)

Taxpayer(Worst Case)*

District Office

All functions (except as shown)

Stamp Office

Dublin, Cork, Galway

AEP

CG’s OR ROS

Returns/Payments

Stamp Duty

Import/Export

Engaging the Organisation Urgency

• Timely external shock • Change agenda ‘out of the closet’• Government interest• Short-circuited a more prolonged

debate…/

Involvement• Target everybody• Try middle managers on board first

Consultation• Can we really involve all 6,500 staff?• The ‘Revenue Roadshows’

Communication• Reclaiming the ‘radio station’

…/

Visible commitment from top Individual letter to everybody All the Board and MAC involved The ‘powerful princes’ Local chairing of sessions A consistent message

Making it happen From broad structure to detailed

design Small project teams – volunteers Briefing sessions – focus groups Dedicated central communications

function – bulletins – hotline for queries – publication of FAQs

Plenaries (150 people)

The ProcessPlan

High-Level Design

Project Board

Detailed Design

Project Board

Implementation Plan

Project Board

Implementation

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Spring 2001

Winter 2003

Re-energising the Process

Getting ‘bogged down’ in analysis Slow negotiations on the

Industrial Relations front New Chairman – important to

make it clear no change of direction

Therefore

Risks would have to be taken Civil Servants and leaps of faith! Not possible to tie down and validate

every detail in advance Get the fundamentals right and move

on Expect some mistakes Tell the Minister!

Parallel IR Process

Plenary and Bi-lateral All parties would be dealt with

fairly and the same Representation issue 4 out of 5 said yes Proceed Anyway!

Go and do it

Assigned to new leadership positions Dominant figures very publicly

mapped into new roles Ambitious Start-up dates for new

Divisions announced Sceptics were outed Change was for real

Change ‘flags and emblems’ rapidly

Email addresses Corporate stationery Telephones Organisation Charts The magazines – important

symbolic moment! Get people using and used to the

language of the new organisation

Making it happen Shut down for a week? Reconfigure the team with the ball in

play! Implementation Management Group Master inventory of tasks Careful planning of each transition

step Transition managers Planned Incrementalism Communicate! Staff and Unions

Visible Top Management Support

Support managers Steady nerves Firefighting occasional crises

And always Re-affirming the core objectives of

change Focus on the gain

How have we done? Not all plain sailing The vital signs are good Streamlined

governance/management Streamlined customer service Energy and initiative released A high degree of flexibility Business Growth

Most importantly

Compliance moving in the right direction

Public confidence in Revenue being rebuilt

“New” Changes happening more easily

Key Lessons

Initiate Yourself Vision – Articulate it Urgency Culture is Critical Test proposals - suspect defences Process and Pace – Drive momentum Define milestones and celebrate them Communicate!!!

And finally …

Keep the change going The bottom line is still Compliance The Structure is a means to an end Keep reminding people

PMDS Introduced in 2000 Partnership Intensive Group Extensive Training Key is Role Definition Link to Strategy Statement Conversation about Performance 2004 Upward Feedback 2007 Integration with HR policies

and processes

Labour Relations Commission

An important part of the State’s Industrial Relations Machinery

New territory for the public sector…but lots of business!

34% of Conciliations in 2004 Understand it and engage with it

Rights Based Legislation

Growing body of law Rights Commissioners

– 19 Acts/Regs Employment Appeals Tribunal Equality Tribunal