||**Table**<br>|**6. A Framework for Diagnosis of**<br>|**Tax**<sup>**System Weaknesses**</sup><br>|d il|
|---|---|---|---|---|
|Characteristic|Perfonnance (usually<br>quantitative indicators)<br>|Capacity<br>|Institutions<br> <br>|Exogenous an envronmenta<br>constraints<br> <br>|
|Policy<br>Formulation|*<br>Simplicity, equity and<br> <br>Comprehensiveness of<br>Administrative Law<br>*<br>Simplicity, equity and<br>Comprehensiveness of<br>taxpayer related procedures<br>*<br>Effectiveness of strategic<br>management decisions|*<br>Human resource quality and<br>quantity for policy<br>formulation and research<br>*<br>Training facilities<br>|*<br>Division of powers<br>*<br>Legal provisions governing<br>administration<br>*<br>Administrative autonomy<br>*<br>Budget determination<br>procedures<br>'<br>Organization structure<br>*<br>Political interference in<br>administrative decisions<br>Appropriateness of tax<br>structure<br>|*<br>Level of economic<br>development<br>*<br>Openness<br>*<br>Commercial development<br>*<br>Extent of transition to market<br>*<br>Accountancy profession and<br>standards<br>*<br>Financial and banking<br>development<br>Literacy<br>S<br>Legal conventions,<br>|
|Accountability|*<br>Corruption<br>*<br>Revenue loss due to<br>administrative lapses<br>*<br>Taxpayer survey<br>|*<br>Human and non-human<br>resource quality and quantity<br>in management inspection,<br>audit, vigilance and<br>anticorruption<br>*<br>Training facilities for<br>accountability staff<br>*<br>Civil society involvement|*<br>Internal and external audit<br>*<br>Ombudsman<br>*<br>Taxpayer survey process<br>*<br>Vigilance<br>*<br>Penalty structure and<br>effectiveness for administrators<br>*<br>Reward structure and<br>effectiveness<br>*<br>Performance evaluation<br>procedure and execution for<br>staff and administrative units<br>|constitutional law<br>*<br>Law and order<br>*<br>Compliance attitudes of<br>taxpayers<br>*<br>Credibility of govermnent<br><sup>*</sup><br>Government stability<br>*<br>Civil service conditions|
|Service<br>delivery:<br>Effectiveness|*<br>Revenue to potential<br>revenue indicators<br>*<br>Activity-wise effectiveness<br>indicators<br>|*<br>Human and non-human<br>resource quality and quantity<br><sup>*</sup><br>In administrative activities<br>*<br>Recruitment Career paths,<br>|0<br>Adequacy of procedures for<br>different internal activities and<br>taxpayer related activities<br>including:<br>||
|Service<br>delivery:<br>Efficiency|*<br>Revenue to cost indicators<br>*<br>Time indicators<br>Taxpayer survey<br> <br>|promotion and transfer<br>policies<br>Wages, bonuses and pay<br>determination<br>*<br>Training facilities<br>*<br>Automation<br>*<br>Budget size of administration<br>*<br>Financial, personnel,<br>equipment and activity<br>management<br>*<br>Feasibility and extent of<br>outsourcing and privatization|Compliance, valuation,<br>taxpayer identification, tax<br>audit, taxpayer education,<br>taxpayer services, tax<br>collection, tax sanctions, tax<br>appeals, border inspection and<br>clearance procedures, special<br>customs procedures,<br>warehousing, preshipment<br>formalities, post clearance<br>checks, information exchange<br>and sharing arrangements||

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