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Customs Electronic Payment Card System (Gümkart)
Ministry of Finance of Turkey

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Problems before the introduction of Customs Electronic Payment Card (Gümkart) System • Payment of customs taxes in cash: Tax payers used to pay their taxes either via cash or block cheque at the accounting units before the introduction of Customs Electronic Payment Card System. Therefore, tax payers had to carry cash money or block cheque with them. Since corporations which had to pay customs taxes made third parties such as customs consultancy corporations pay these taxes, carriage of the money by the third parties had another risk (loss, stolen, malicious usage, etc.). Moreover, as cash payment of taxes took more time than paying by a card, there were accumulations in the accounting units. Thus, customs transactions took more time than expected. • Closing customs declaration manually: Before the introduction of the Customs Electronic Payment Card System, after tax payers paid their tax liabilities at the accounting units affiliated to the Ministry of Finance, they took receipt from the accounting unit and then, they made the customs declaration closed (made customs procedures ended) by applying to the directorate of the customs under the Ministry of Customs and Trade. The fact that there was no mechanism for controlling whether the receipts are fake or real caused malevolent people exploit the situation. As the accrual and cash transactions were made by different institutions manually, audit and control weakness occurred. At the same time, customs procedures of an item took too much time unnecessarily due to unnecessary repeat of works and time loss and costs increased; accordingly this led to complaints of tax payers. • Manual accounting records: Before the introduction of the Customs Electronic Payment Card System, accounting records of customs tax payments were created manually by entering these records manually. This led to time and workforce loss as well as increasing the risk of false entry.

B. Strategic Approach

 2. What was the solution?
In order to solve the problems occurred due to cash payment of customs taxes, the Ministry of Finance and the Ministry of Customs and Trade decided to develop a joint project. They departed from the principles of commonly usable solution, easy usage, not needing additional personnel, and being reliable; and then they decided that customs taxes could be paid by an electronic money cards called as “Debit Card”. The project was submitted to a public bank, the General Directorate of Foundations Bank (Vakıfbank). As a result of positive approach of the bank to the project, cooperation protocol was signed in 2007 and feasibility studies were initiated. Test and pilot studies were completed in 2008 and full application was started in 2009. Thanks to the Customs Electronic Payment Card System, it is ensured that declaration based customs taxes, cash warrant and probation, taxes under the respite, all kinds of fine collection resulting from the tax legislation, customs income that are not subject to the declaration such as public officers’ travel allowance, overtime payments, storehouse payment, transportation pass document and scale fee to be collected by electronic money cards called as “debit card” instead of cash money at accounting unit cash points collecting customs income or paymasters’ offices receiving payment on behalf of them. Since these debit cards called as Customs Electronic Payment Card System can be used by entering password in middleware POS devices which are placed in customs and operate in closed cycle, many risks resulting from cash money and block cheque have been eliminated. Since tax ID no control is used in the operation of Customs Electronic Payment Card System, customs tax of only card owner corporation is paid by a card; and this is another security component. Customs Electronic Payment Card application ensure online closure of declarations following collecting accrued taxes in the customs declarations by Customs Electronic Payment Card at accounting unit cash points via online information exchange among the Ministry of Customs and Trade, General Directorate of Public Accounts of Ministry of Finance, and Vakıfbank. The project ensured integrated working of the Ministry of Customs and Trade, the Ministry of Finance, and banking systems. Accordingly, when accrued taxes in the customs declarations come into the payment stage, personnel of accounting unit connect to the system of the Ministry of Customs and Trade through the system of the Ministry of Finance, inquiry is made by sending registration number of the declaration to be collected, then, information coming from the system of the Ministry of Customs and Trade is transferred to the POS device. The card submitted by card holder is inserted into the POS device and when the card holder enters password, information is transferred to the bank of the card via the POS device. In the event that the bank approves the payment transaction, Receipt Document is printed following receiving conformity by producing Special Number of Receipt to the payment transaction at the accounting unit through Public Expenditure and Accounting Information System (KBS) and a massage for transaction result, informing that the transaction is successful, is sent to the POS device for printing Expenditure Document. Customer copy of the Expenditure Document received from the POS device is given to the card holder together with the Receipt Document. After the payment is concluded, payment information is sent by the system of the Ministry of Finance through connecting to the system of the Ministry of Customs and Trade; and the system of the Ministry of Customs and Trade declaration content provides continuation of the process of the item automatically. It is seen that three main problems were solved with the realization of the project. • The necessity of carrying cash money was removed: The necessity of carrying cash money by the tax payers was removed and the opportunity of paying customs taxes and other payments by electronic money cards called as “Debit Card” was introduced. Therefore, difficulty and danger of carrying cash money were eliminated. Since the situations such as keeping cash money in accounting units and transferring were gone away, security need and risk were decreased, and abuses such as using counterfeit money were prevented. • Work force and time losses of tax payers ended: It was ensured that transactions were conducted faster by preventing time losses in the accounting units in terms of tax payers. Security problems were solved by means of systemic tax number and account control ensured over the card and making transaction via card password. • Transactions were completed at single point, workforce saving was ensured: Before the introduction of Customs Electronic Payment Card System, tax payers used to pay their customs taxes at the accounting units of the Ministry of Finance and received a receipt in return; then they applied to the directorates of customs with the receipt and made declarations closed manually, thus they could withdrew their dutiable goods from the customs. Since Customs Electronic Payment Card System allowed integrated operation of the Ministry of Finance, Ministry of Customs and Trade, and banking systems, the declaration is automatically closed when the customs taxes are paid by electronic money card. Therefore, shuttling among institutions was reduced, time loss was prevented by completing customs transactions faster and workforce saving was ensured. Accordingly tax payers’ appreciation has been increased. • Accounting records were created automatically at the moment of transaction: Before the introduction of Customs Electronic Payment Card System, customs payments were individually recognized manually by accounting units of the Ministry of Finance. Thus, time and workforce losses occurred. With the introduction of Customs Electronic Payment Card System, accounting records were automatically created by a single key and time and workforce loss are not seen now. Moreover, reporting and control are easier than before. Since the system operates online, payment processes of the corporations are completed under their own control, the corporation monitors which customs make transactions by which card spontaneously and can recognize automatically.
 3. How did the initiative solve the problem and improve people’s lives?
An integration providing electronic data transfer among three different institutions was created in the Customs Electronic Payment Card System. Customs declarations are inquired electronically through the automation system of the Ministry of Customs and Trade by the accounting units of the Ministry of Finance; customs taxpayers make payment by Customs Electronic Payment Card after the inquiry is completed thanks to the integration between Vakıfbank and the Ministry of Finance; and then, customs declarations are closed automatically after the payment thanks to the integration between the Ministry of Customs and Trade and the Ministry of Finance. Differences and innovations of the project are as follows: • Three different institutional unit transactions (Customs, Bank, and Accounting) were gathered at single point; and taxpayers’ appreciation as well as institutional appreciation was ensured. One of the biggest differences of this project is the completion of automation based transactions spontaneously at a single point. Customs paymasters’ offices acting in the customs directorates affiliated to the Ministry of Customs and Trade and cashiers working in the accounting units affiliated to the Ministry of Finance are authorized to collection of customs tax and role identification of these authorized officials were made, thus, they could enter into the Customs Electronic Payment Card System with a password. Daily collections of these officials can be inquired in the system spontaneously, and spontaneous accounting and recognition transactions can be made electronically. Making accounting and recognition transactions electronically decreases paymasters’ frequency of shuttling and prevents time loss. • Instead of keeping collections of paymasters in their own safe or another account, recording in the account of accounting unit: Before the introduction of Customs Electronic Payment Card System, since the payment was made in cash or cheque, paymasters used to keep collections of customs paymasters in a safe where the collection paymasters’ office located and it was risky. After the introduction of Customs Electronic Payment Card System, payments are directly transferred to the collection accounts of the accounting units affiliated to the Ministry of Finance through Vakıfbank which mediates the payment; therefore risk and additional workload of keeping cash in the paymasters’ safe are eliminated. • Usage 24/7: It is possible to pass through customs in every hour of a day in order to allow nonstop continuance of the dense customs transactions. Customs Electronic Payment Card System operates and makes collection twenty four by seven for not delaying customs transactions. • Facilitating tax payments in the customs area: Customs Electronic Payment Card System can be used at each one of customs administrations by the customs paymasters. Accordingly, customs taxpayers can pay their taxes by Customs Electronic Payment Card System without going to accounting units; if they wish, the payments can be made via taxpayers or representatives at the accounting units and payment information reaches to the customs directorates spontaneously; then, customs declarations are closed and dutiable items can be withdrawn. • Safety and speed: Paymasters and cashiers whose role identifications are made in the Customs Electronic Payment Card System can enter into the system with a password due to safety reasons. Tax ID no control and declaration no control are used in the Customs Electronic Payment Card System. • Effective reporting: Transactions made in the Customs Electronic Payment Card System can be reported on person and user basis and the system ensures transparency and accountability. • Removal of remittance, cheque, and cash payment necessity: Taxpayers do not have to carry cash and cheque with them since remittance, cheque, and cash payment necessity has been removed by the Customs Electronic Payment Card System. Payments made by electronic money card are important in terms of speed, safety, and taxpayers’ appreciation. • Quick system and accounting integration: Spontaneous accounting record is produced with a single key automatically in the Customs Electronic Payment Card System.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Before the introduction of the project, in site observations were made in the implementing units in order to detect the problems and visualize what can be done to resolve them. Draft project and work flow were prepared with the participation of all project partners and a protocol was signed according to that. Application software program was prepared and it was modified by the customs and bank accordingly, then it was finalized in coordination and consultation with the project partners. After this stage, pilot implementations were conducted for one year at the Customs Directorate of Ankara Esenboga, deficiencies and matters to be improved were detected; then necessary improvements were made. The points where the system will be implemented, and their existing technological facilities such as computer, printer, internet, telecommunication, etc. were detected and efforts were launched to meet the technological needs of such implementing units. An application manual was prepared for the users; definition of the work process was made and announcements were made for gradual rollout in line with the technological infrastructure of all implementing units with a general letter. User identifications of the people using the system were completed. Bank POS devices and bank account numbers were identified. At this stage, the bank intensified on one hand POS device installations, identification of bank account numbers and on the other hand spontaneous card distributions, and works for including new customers in the system. Also, support was given to the places where there was hardware deficiency. Thanks to the technical committee among three institutions, no communication problem was encountered. Help desk was established in order to interfere in problems encountered during the application. Notices for taxpayers were made through internet and banking advertisement activities. Information need, which was occurred after the initiation of the project, was fulfilled by bank and accounting units. Updates were made in the priorities of the project in accordance with the priorities of taxpayer. Dual implementation was allowed during the transition period in order to ensure the ones who could not enter into the system to pay with the former system. Training need of the users, who had no information knowledge, occurred and the need was tried to be satisfied by central training.
 5. Who implemented the initiative and what is the size of the population affected by this initiative?
Three stakeholders of the implementation are the Ministry of Finance, the Ministry of Customs and Trade, and the General Directorate of Vakıfbank. Units which take part in the implementation are the General Directorate of Public Accounts -main service unit of the Ministry of Finance- and customs accountancies dependent on the General Directorate of Public Accounts, the General Directorate of Risk Management and Control of the Ministry of Customs and Trade, customs directorates and Vakıfbank which mediates customs revenues. Also customs taxpayers who pay customs taxes are one of the units take a role in Customs Electronic Payment Card System. Programmer staff and experts of information technologies (IT) units of the Ministry of Finance, the General Directorate of Public Accounts, and the Information Technologies Department of the Ministry of Customs and Trade managed the process of implementation design and putting into effect. Preparing task and making flowchart were fulfilled by contribution of all shareholders; and the protocol was signed out by all parts in accordance. Places the system carrying out and technical equipment needs were detected by the General Directorate of Public Accounts and lacking equipment were provided, implementation guides for user were prepared, and users were identified into the system. POS machines which were to be installed and bank account numbers were identified by Vakıfbank and also distribution of debit cards (Gümkart) to taxpayers was accomplished concurrently. Equipment staff where place in implementation area were given support through contractual firm by the General Directorate of Public Accounts and this support still continues. For ensuring integration between the General Directorate of Public Accounts' automation system and the Ministry of Customs and Trade's automation system, these two authorities' information technologies (IT) units worked in cooperation.
 6. How was the strategy implemented and what resources were mobilized?
IT experts and software developers in the IT departments at partners of the project have managed the process of the design and application agenda of the project. In this process; communication services, computer and printer hardware products, POS devices, debit cards and internet network have been used. The cost of human resources and hardware has sustained by their own budget of partners of the project without using any outsource. The number of the experts who worked in the project: Ministry of Finance: 5 Ministry of Customs and Trade: 5 Vakıfbank: 3 The cost of human resources worked for project: 780.000 Turkish Liras (390.000 $) The cost of hardware and software used in project: 50.000 Turkish Liras (25.000 $)
 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
• Time and labor savings for customs taxpayers: As a result of paying of customs duties via electronic money card called GÜMKART, payment process has become faster and more secure. The collections made electronically provided prevention of time losses arising from unnecessary duplication of work and shuttling between different institutions and systems, shortened customs clearance process and facilitated audit and control. Waiting for cheque collection, commission and workload due to cheque collection were removed. • Time and labor savings in terms of corporate transactions: Through the integration between three different institutions, customs duty collection operations started to be carried out electronically from a single point. As a result of facilities provided by automation, nearly 60 percent of customs duties is collected by means of this system. Traded value which was 4.535.072.870 TL (2.267.536.435 USD) in 2009 has risen to 29.165.243.058 TL (14.582.621.529 USD) in 2013. Number of customs declarations which was 179.250 in 2009 has risen to 1.211.664. Also, as a result of the transactions done electronically stationery expenses decreased. • Abuses were prevented: Thanks to the electronic money card collection, due to the abandonment of the use of cash and cheque, customs taxpayers don’t need to withdraw cash from their accounts and carry cash with them. Also since the process of sending cash collections to the bank in the same day is not required, providing security of cash is minimized. On the other hand, abuses such as the use of counterfeit money by malicious people are prevented. • Audit and control environment has been created: As a result of integration between institutions, data exchange is provided instantly. Customs Electronic Payment Card System (GÜMKART) has brought the possibility of an effective auditing and reporting. Incorrect operations have been prevented. Thus, incorrect operations caused by manual data entry are avoided. • Before Customs Electronic Payment Card System (GÜMKART), accounting procedures are done by manual data entry. After the application, the one–touch operations are performed electronically.
 8. What were the most successful outputs and why was the initiative effective?
In order to monitor the progress of the application, there has not been any communication problem through technical committee, established by the General Directorate of Public Accounts, the Ministry of Customs and Trade, General Directorate of Vakıfbank. Help desk has been established for interfering in the problems in practice. Announcements also made through the internet for customs taxpayers. VakıfBank has continued its own promotion and technical support activities. Binary application is permitted for users who were not able to enter into the system, in order to enable them to pay by the former method during transaction period. Training activities have been regulated for users who do not have any IT experience. On the other hand, daily volume passing through system were checked and followed by VakıfBank. Companies which are engaged in custom operations were identified, visited and informed for the purpose of dissemination of GUMKART, and usage of the product more commonly was ensured.
 9. What were the main obstacles encountered and how were they overcome?
Because of the addictiveness to the old system of the users’, there is an adaptation problem and resistance against new system. Mentioned problem was solved by giving Local Briefings and establishing help desks. The customs advisors, who do lots of jobs for a lot of customers, were also informed. With the initiation of the Project, the need for informing the users arose. This need was removed by the help of announcements, training activities and help desks. In case of the possibility of problems while entering into the system at the beginning because of the lack of information and technical problems, dual implementation was permitted. It was hard to manage such a complicated structure and ascertain the mistakes since the system was processed by complicated software, which consists of three institutions’ IT systems at a single point. In order to solve this problem, technical teams, who work for 27/7 in coordination with one another, were established under the constitution of three institutions (the Ministry of Customs and Trade, Ministry of Finance, Vakıfbank). The problems were observed instantaneously by three teams and the detections and solving suggestions were shared with the other teams. On the other hand, during the implementation, the obligation for giving technical support to hardware materials occurred from time to time. This problem was overcome by the technical support of the Ministry of Finance.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
We can evaluate advantages and impacts of “Customs Electronic Payment Card System (GÜMKART)” in terms of customs operators, banking system, the Ministry of Customs and Trade, and also the General Directorate of Public Account. • Advantages of the system in terms of customs taxpayers: effective process, efficiency, preventing delay and time loss, automated transactions, payment with single order, release of money order, cheque and cash procedures, correct recording, 100% secure transaction, 24/7 usage, password usage, checking tax/ declaration number. • Advantages of system on behalf of the Ministry of Customs and Trade and General Directorate of Public Account: online recovery, secure and rapid process, check of transactions, preventing forgery and abuse, correct data management, secure recovery with cashless environment and eliminating potential risks and difficulties which occur because of holding cash and cheque in accounting units, automated write off of declarations, instant pursuit, reporting and recording of accounts with single button automatically, surpassing difficulties related recording and auditing that occurs because of transactions which are held without using card, being part of e-government transition process • Advantages of system on behalf of banking system: high speed system, world technology, taxpayers’ satisfaction, effectiveness, generating instant account records and bank receipt, source for demand deposit, opportunity for customer dependence and credit viability.
 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
System is quickly adapted to legal amendments since it is developed by financial resources of the Ministries without outsourcing. Software is updated continuously according to implication demands and current needs. This feature is one of the important advantages of the project. Customs Electronic Payment Card System has been used since 2009 and application area and transaction volume have been increased day by day. Moreover infrastructure, human resource and technical equipment of project are also appropriate for the collection of other revenues rather than customs revenues, so that other revenue types have been added by time. This system also allows collection of other public revenues rather than customs duties. For this reason, system has been used by other accounting units rather than customs accounting units. Customs Electronic Payment Card System Statistics Year: 2009 Number of Card: 9.861 Number of Transaction:179.250 Transaction Volume (TL):4.535.072.870 Transaction Volume (USD):2.267.536.435 Year: 2010 Number of Card: 5.036 Number of Transaction:746.187 Transaction Volume (TL):12.678.349.882 Transaction Volume (USD):6.339.174.941 Year: 2011 Number of Card: 10.709 Number of Transaction:1.048.141 Transaction Volume (TL):20.405.355.472 Transaction Volume (USD):10.202.677.736 Year: 2012 Number of Card: 8.487 Number of Transaction:1.148.167 Transaction Volume (TL):23.744.088.203 Transaction Volume (USD):11.872.044.101 Year: 2013 Number of Card: 8.914 Number of Transaction:1.211.664 Transaction Volume (TL):29.165.243.058 Transaction Volume (USD):14.582.621.529
 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
In this age of technology, the necessity of taking advantage of information technologies in public financial affairs and the importance of mutual cooperation and integration in producing projects have been observed once again thanks to this project. The implementation of financial affairs electronically has resulted in reduction of paper usage and, therefore in the cost of red tape. Since the Customs Electronic Payment Card System is sustainable and elastic, its integration with other projects in the future and its area of usage to be expanded seem to be possible. The number of debit card (GÜMKART) has increased rapidly since taxpayers were easily adapted to the system. This is an indicator demonstrating that the system can easily be adopted by taxpayers. Customs Electronic Payment Card System sets such an example for other public collections besides customs tax that other public collections can also be made in that way. As a final target, cash usage will be brought to an end by making all collections in public area electronically. On the other hand Customs Electronic Payment Card System won the first place and won big prize in the 7th Turkey e-TR awards in the field of “e-services from public to the business world” held by the Turkish Industry and Business Association (TUSIAD) and Turkish Informatics Foundation (TBV). This prize is given with the aim of to improve quality, affectivity and competitiveness in the economy and social life, to develop a transparent and effective public administration, to attract attention to the sample implementations in public sector, to introduce innovative implementations to the public, to support and encourage successful enterprise, and to contribute in popularization of this type of implementation. Besides, Customs Electronic Payment Card System won the Turkish Most Creative Instrument of Payment Prize from the VISA Europe because of ensuring to pay online the customs duties without needing cash and cheque and due to the fact that it doesn’t require tax payment receipts as well as controlling of documents, and the customs processes finish more quickly and easily.

Contact Information

Institution Name:   Ministry of Finance of Turkey
Institution Type:   Government Agency  
Contact Person:   MAHMUT VAROL
Title:   Mr.  
Telephone/ Fax:   00903124151640/00903124170515
Institution's / Project's Website:  
E-mail:   mtosun1@muhasebat.gov.tr  
Address:   Maliye Bakanlığı, Muhasebat Genel Müdürlüğü, Dikmen Caddesi, M Kapısı, Z-05
Postal Code:   06540
City:   ÇANKAYA / ANKARA
State/Province:   ANKARA
Country:  

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