ATS
Mauritius Revenue Authority

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
The Mauritius Revenue Authority was established in July 2006 as a corporate body, through a merger of the previous revenue collecting departments (Large Taxpayers, Income Tax, VAT and Customs). It operates under the aegis of the Ministry of Finance with an independent board and a management team. The problem Before the introduction of the Automated Tax Services (ATS), taxpayers and the tax authority faced several issues that can be grouped in three major categories: 1) submission of individual income tax returns and payment of taxes; 2) Poor communication/ interactions with stakeholders and 3) the inefficiency in tax administration. 1)Submission of Returns/ Payment & Refund of taxes Before 2006, a Taxpayer was receiving an Income Tax Form by post. If same was not received, he/she would have to move to the only office of the Tax Authority in Port Louis and queue up to pick up this form. After receiving a printed form of 4 pages, the taxpayer had to fill in and calculate his tax liability. This resulted in arithmetical and other type of errors. Then, the taxpayer had to send the form either by post or directly at the head office in Port Louis. It used to cost a taxpayer around Rs 30 (approx. 1 USD) to send his income tax returns duly filled-in to the Mauritius Revenue Authority (MRA). Others had recourse to tax agents or professional accountants and had to pay the relevant fees. To pay the amount of income tax that has been calculated, a Taxpayer had to personally come at the MRA Head Office. During the peak filing season the waiting time could be as long as 3 hours per taxpayer. Refunds were effected to taxpayers in 3 months, on average. 2)Poor Communication with Stakeholders The Stakeholders of the MRA, including government agencies, were not able to communicate effectively with the organization. The annual statements and monthly supplies were sent manually by companies and government agencies were not exchanging relevant information in a timely manner. 3)Inefficiency in Tax Administration i)The MRA had to print around 200 000 income tax forms and post same to the taxpayers. This included the printing of stickers with the taxpayers’ details as well as the purchase of 200 000 envelopes. For this exercise, the staff had to be paid overtime. ii)The MRA had to hire around 70 additional staff during the filing season to key-in taxpayers’ data from manual forms. This exercise took around 3 months to be completed. iii)The claims for refunds had to be processed manually, which took around 1 to 3 months to complete and iv)The returns already processed had to be stored in 3 buildings (10 rooms) which the MRA was renting. Who were affected? Every individual taxpayer in Mauritius was affected by these issues (around 200 000) and mostly the elderly, the disabled and the lower middle income group who had difficulties to file the returns and had to come to Port Louis to pay the income tax.

B. Strategic Approach

 2. What was the solution?
The Mauritius Revenue Authority (MRA) proposed, designed and implemented the Automated Tax Services (ATS) initiative since its inception in 2006. What is the ATS? The ATS refers to the automation of the taxation system, as administered by the MRA. It involves the simplification of processes, procedures and legislation; the introduction of an electronic system to integrate the different tax systems; the shifting of platform from the Government Online Centre to MRA’s own system; the establishment of a network for sharing information with stakeholders; the adoption of an integrated tax administration solution; the redefinition of taxpayer services to adapt to these changes and the adoption of a communication strategy targeting the specific audience with emphasis on a change in Tax Culture. Objectives The set objectives of the initiative were as follows: 1 To simplify the whole process of filing of returns and payment of income tax by individual taxpayers through the automation of the entire process. 2)To introduce electronic modes of payment to taxpayers, to facilitate the taxpayer and 3)To increase voluntary compliance from individual taxpayers by making the facilities accessible, easy and less costly, 4)To reduce the use of paper, 5)To change the culture of taxpayers through the adoption of paperless tools, and 6)To facilitate businesses in meeting their obligations. 7)To automate the taxation processes within MRA 8)To exchange information efficiently with stakeholders to improve tax administration How it works? With the ATS, the whole process of taxation has been automated in the following ways: 1)Automatic registration of taxpayers in business 2)Electronic Return of Employees (ROE) sent by employers 3)Individual Income Tax Returns are submitted electronically (PC/Tablet/ Smart Phones) 4)Payments are made electronically (Internet Banking, Credit Card, SMS or ATM) 5)Refunds / claims are processed automatically (75%) 6)All departments of the MRA are connected to a unique system (ITAS) 7)Direct line of communication with taxpayers (mailing list) 8)E-statements by companies 9)E-PAYE / E-TDS Returns / E-VAT returns 10)Automated assessment 11)Record Management System (Scan, register and file documents) How the problem was solved? The problem was solved for both taxpayers and the tax authority as follows: a. Taxpayers Individual taxpayers (salaried and/or self-employed) can: 1)Send individual tax returns electronically in 5 minutes through the MRA’s website and connecting either through a PC/ MAC, tablets (ipad, etc) or smartphones (android, etc) without any cost, 2)Obtain a Tax Form which is already pre-filled, 3)Submit a tax return without attaching any supporting document, 4)Update their personal information through MRA’s website, 5)Obtain an electronic acknowledgement by the MRA, 6)Submit their income tax return at their convenience, 7)Benefit from a Tax form which automatically calculates the tax to be paid or the refund claimed, 8)Benefit from 15 additional days for submitting their tax returns electronically, 9)Obtain a refund as from the first week of the claim 10)Participate in an E-Filing Lottery which further motivates taxpayers to use e-services and 11)Pay income tax by credit card, direct debit, ATM or by sending a simple SMS b.Tax Authority 1)The following costs savings have been achieved: a.Printing forms b.Labour and postage to send forms has been eliminated. c.Collecting of forms and pre-data capture processing d.Data Capture and further processing. 2)Efficiency gains in terms of: a.Time for processing of returns and effecting refunds b.Queues at customer service has been reduced from 50 to 10 during peak filing season c.Queues for payment has been reduced from 200 to 15 during peak season

 3. How did the initiative solve the problem and improve people’s lives?
What makes the initiative unique? The ATS initiative is unique in the way the Mauritius Income tax system has been re-designed to provide innovative automated filing and payment facilities to individual taxpayers. The Tax system has been simplified with the introduction of a flat tax rate of 15% and the focus was geared on automation. List of Innovative / Creative approaches and how it addressed the problem a)The Tax system was amended to lump all deductions into one Income Exemption Threshold (IET) b)A Cumulative PAYE system was introduce for salaried taxpayers, c)The MRA stopped sending income tax forms to taxpayers, requesting everyone to send tax returns electronically d)Tax forms have been simplified and made available through PC/ Tablets / Smartphones e)Web-based Wizard driven Income Tax Return for both salaried and self-employed individual taxpayers. f)Pre-filled income tax return for salaried individual income taxpayers g)Providing taxpayers with a host of e-payment facilities, namely: i)Internet banking ii)Direct debit iii)Payment through Automatic Teller Machine (ATM) iv)Payment through Mobile Phones (SMS) v)Payment by Credit/debit card h)Introduction of a Lottery for taxpayers sending their returns electronically

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Elements of the ATS Action plan 1)Amendment to legislations a.For the Automation process to start, the relevant legislations, namely Income Tax Act and the VAT Act needed to be amended to include the following: i.A consolidated threshold for deductions ii.The introduction of Tax Deduction at Source for rental income, royalties, payment to professionals, etc iii.Introduction of a Cumulative PAYE System iv.Obligation for employers to submit the Return of Employees v.Extension of due date for filing of income tax return for e-filers 2)System development a.Shift from utilization of Government’s electronic platform (Government Online Centre) to a platform managed by the MRA (from www.gov.mu to www.mra.mu) b.Introduction of an Integrated Tax Administration Solution (ITAS) adapted to the needs of the country i.It covers registration, return processing, payment, assessment, objection and appeal to debt collection and enforcement ii.It allows a single overview of all the filing obligations of a taxpayer c.Adoption of a Record Management System Scanning, registration and filing of documents in an electronic document management system d.E-Selection of Tax audit cases An electronic system automatically selects and allocates cases for audit using specified parameters 3)Capacity building a.After the development of the system and the User Assisted Training (UAT), all the users of the ITAS were formally trained. b.The training sessions were conducted internally by the staff of the Information Systems Department of the MRA c.The majority of the staff of the MRA being computer literate, the training was done in a quick interval 4)Communication to Taxpayers / Stakeholders a.The Taxpayer Services Department was changed to Taxpayer Education and Communication Department and staff with specific skills were recruited. b.A long-term Communication Strategy was designed and implemented to ensure acceptance by the public and understanding of the objectives. c.The majority of the communication materials were developed in-house 5)Deployment of the automated System (Chronological list) The deployment of the system was effected gradually as follows: a.In 2006, the changes in legislations were brought, namely: obligation to file ROE, TDS, consolidated deductions, Cumulative PAYE and abolition of tax incentives, b.In 2007, the following actions were implemented: i.Automated Registration of taxpayers in business through online access to the Central Business Registration Database (CBRD) ii.Introduction of a PDF-based electronic return for salaried taxpayers c.In 2008, the PDF-based electronic return was extended to self-employed individual taxpayers d.In 2009, the Record Management System was introduced as well as the online application for Tax Account Number (TAN) e.In 2010, the following actions were taken: i.The MRA shifted from the Government’s Platform to a self-managed systems ii.The ITAS was introduced thereby doing away with three systems (Income Tax, VAT, Large Taxpayers) which were operating remotely iii.The PDF-based form was enhanced and further simplified to one r/v page f.In 2011, the MRA implemented the second phase of the ATS by stop sending manual forms to taxpayers and introducing new modes of payment, namely Direct Debit g.In 2012, the following actions were taken: i.The electronic PDF-based form was again enhanced ii.Introduction of a registration service for the e-services iii.Introduction of pre-filled individual income tax returns iv.New electronic modes of payments were introduced h.In 2013, the following actions were taken to implement the last phase of the ATS: i.Introduction of a unique web-based wizard driven Income Tax Form for salaried and self-employed taxpayers ii.Introduction of payment by mobile phone text messages (SMS) i.In 2014, payment by Credit card was introduced.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The following stakeholders were involved in the design and implementation of the ATS: 1)The Director General of the Mauritius Revenue Authority, Mr. Sudhamo Lal 2)Employees of the former revenue departments, namely: Mr. Mahmad Oozeer, Mr. Ootam Hurnam, Miss Fahmida Khodabux, Mr. Soopayah Narrainen 3)Mr. Paul Matthews, Consultant from Price Waterhouse Coopers 4)The Ministry of Finance and Economic Development (Public institution) 5)The Board of Investment (Public institution) 6)The Mauritius Institute of Professional Accountants (Private Sector) 7)The Mauritius Taxpayers Association (NGO) 8)The Mauritius Chamber of Commerce and Industry (Private Sector) 9)The Mauritius Employers Federation (Private Sector) 10) The Mauritius Export Authority (Export community-private sector) 11)The Registrar of Businesses (Public institution) 12)The Registrar General (Public institution) 13)The National Transport Authority(Public institution) 14)The Passport and Immigration Office(Public institution) 15)The Gambling Regulatory Authority(Public institution)
 6. How was the strategy implemented and what resources were mobilized?
1)Technological innovation The electronic system that has been introduced in the context of the automation of the taxation process as well as the cost financial and technical costs involved can be divided in the following categories: 1)Providing electronic services to taxpayers through MRA’s website a.The electronic facilities were developed by the MRA with the existing resources. b.The new modes of payment did not require additional investment by the MRA c.The MRA’s IS Department started developing Applications (Aps) for smartphones and tablets as from 2014 to further facilitate the taxpayers 2)Integrated Tax Administration Solution (TAS) a.The Cost for the purchase of the ITAS was born by the Government b.The ITAS was then customise to adapt to the needs of the MRA c.The staff from the Information System Department (ISD) conducted the training of the MRA Staff on the use of ITAS 3)Record Management System a.The Record Management System (KOFAX Solution) was purchased by the Government outside the budget allocated to the MRA 2)Capacity building The number of additional staff that was required to operate the ATS was around …… In terms of training of the staff to manage the Automated Tax Services, it is to be noted that the training has been carried out by the Internal Staff of the MRA. The training has been scheduled based on the different phases of the implementation of the initiative. The 3)Communication Campaign The cost of communicating the whole project and ensure the adoption by the public of the ATS on a voluntary basis was around Rs 10 million (350 000 USD)

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
Successful outputs 1)Reduction in processing time for the returns 2)Synchronisation of all tax systems through sharing of data 3)E-selection of cases for audit 4)Change in Tax Culture a.The MRA has observed a change in mindset for preparing a tax return manually -taking leaves/ permissions from work to submit a return at the MRA Head Office and / or join a long queue to effect payment. 5)Fast-track refunds through matching of electronic return data & third party information (banks, employers, etc). Refunds may now be credited directly in the bank account of a taxpayer. 6)Reduction in the cost for printing income tax returns ( around 200 000 returns) and post same to taxpayers. In 2006, the cost was estimated at Rs 1,717,500 (Approx. USD 57 250). This cost did not include the additional resources needed and the amount paid in terms of overtime to the staff for processing the manual returns. 7)Redeployment of staff previously employed to capture data from returns to key areas for fast-track service to taxpayers. 8)Minimization of errors (inputting / calculation/ interpretation) 9)Increase in the percentage of electronic payment received from 42% in 2007 to 68.2% in 2013.

 8. What were the most successful outputs and why was the initiative effective?
1)Tracking of Returns / payments/ refunds a.The MRA has put in place an on-line tracking system which enables the authority on a daily basis to track the number of e-filers, the number of payments made electronically 2)Monitoring of ATS a.Use of a constant monitoring mechanism for electronic returns during the filing season, leading to judicious strategic decisions being taken in case of lower compliance rate b.Monitoring of claims for refund 3)Impact assessment / Evaluation a.Continuous assessment of operations with available reports on different activities b.Taxpayer Satisfaction survey The MRA commissioned a Taxpayer Satisfaction Survey to assess the impact of the changes introduced since its setting up. c.Employee Satisfaction Survey The MRA organized a survey to receive appropriate feedback / suggestion / comments from members of its staff about the administration of the authority. d.Feedback from stakeholders The MRA receives regular feedback from the Taxpayer association as well as NGOs and opinion leaders about the way it is operating.

 9. What were the main obstacles encountered and how were they overcome?
Obstacles encountered 1)Acceptance of new Technology and Culture Problem: The initiative brought about a change in tax culture as well as a use of new technology. The first obstacle was to ensure that the taxpayers adopt the technology change and the second one was to start to tread on the long road towards the establishment of a new tax culture in Mauritius. When the ATS was launched, the public was rather reluctant to use the new tools that were at their disposal. Solution: To encounter this attitude and ensure that there is a shift in the way people interact with the tax authority, the MRA made use of a well defined communication mix comprising of the television, the radio, the written press, the online community on social media and the MRA Mailing service. To further motivate the taxpayers, the MRA introduced for example an E-Filing lottery wit 20 prizes worth a total of 7000 dollars. The result was gradual change in attitude and behaviour amounting to the full adoption of the automation strategy proposed. 2)Resistance to change by staff Problem: As the technology and the approach was new, the MRA Staff, who have been been working with tax for 25 years were at first reluctant to change. For example when E-filing of individual income tax returns was introduced the taxpayers still had the option for 3 years to submit their income tax returns manually. The staff of the MRA themselves continued to send their income tax forms manually and did not encourage the taxpayers dynamically to adopt the new system. Solution: The MRA embarked on an internal sensitisation campaign aiming at a change in attitude and behaviour from the staff. Each and every staff of the MRA participated in this initiative as part of their work mandate

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
Impact of the initiative The Automated Tax Services was a resounding success both for the public and the Tax Authority. Key benefits 1)E-Filing rate / Compliance rate a.he electronic facilities now allow the taxpayer to fill-in his tax returns quickly, easily and anywhere. There is no need to attach any supporting documents to the tax return. Those documents will only be needed if a taxpayers’ case is audited. The taxpayer also gets a pre-filled return that he can fill using a mobile phone or a pc/tablet/ipad,etc. Taxpayers who had difficulties to move to the MRA Head Office (Disabled/elderly, etc) can now file their returns without hassle. Moreover, the taxpayer also gets an electronic acknowledgement that his tax return has been submitted. b.The number of electronic returns has been substantially increased as follows: i 2007- 1,571 ii.2008- 9,477 iii.2009- 26,780 iv.2010 – 44,913 v.2011 – 76,526 vi.2012 – 98,533 vii.2013 – 117,410 viii.2014- 123,000 (92% of the individual tax population) b.With the introduction of the ATS, the e-filing rate for individual taxpayers (currently at 92%) is higher than that of companies (currently around 77%), in spite of the fact that companies have more resources, better infrastructure and connectivity as well as legal obligations to submit electronic returns. 2)Ease of paying taxes c.The percentage of electronic payments has been increasing substantially since the introduction of the ATS. The number of people standing in a queue to effect a payment has been reduced drastically. Nowadays, the payment of income tax is mainly done through internet banking, credit card, ATM, direct debit, and even SMS (text message through a mobile phone). d.Now a taxpayer can apply for a Tax Account Number through MRA’s website and he will obtain a reply in less than 48 hours. Before it used to take one week to obtain a TAN and the taxpayer had to physically come at the MRA to apply for same. 3)Quick/automatic refunds a.The automation has allowed the MRA to effect refunds in a minimum of one week as 75% of refunds are now done automatically. Before the introduction of automation, refunds were effected in not less than 2 months after the filing of returns. b.With the ATS, taxpayers can obtain their refund credited in their bank account 4)Paperless a.Taxpayers are now spared the trouble of looking for a pile of documents. The MRA has saved on the printing of forms and the storage of manual returns. 5)Taxpayer Satisfaction Survey / Continuous assessment a.A Taxpayer Satisfaction Survey was organized to assess the impact of the new measures introduced. A Dedicated section in the Survey related to service delivery which interalia asked the respondent to rate the e-filing facilities provided by the MRA. It also included open-ended questions where the respondent was given the opportunity to evaluate MRA automated services and make suggestions to improve the services offered. b.The MRA also continuously gathers the feedback from the taxpayers through the following means: i.Customer Service Feedback Terminal (CSFT) The MRA has put in place 7 CSFT in different places in Mauritius to receive the feedback of customers about the service delivery at the point of contact. The results are portrayed in a quarterly report that is discussed by the Management team of the MRA. ii.Feedback from website The website of the MRA offers the possibility to send feedback to the authority through a suggestion box. iii.Suggestion box Suggestion boxes are installed at every point of contact and the suggestions/ complaints / feedback are analyzed in monthly report that is sent to the Director General’s Office. iv.Taxpayer Services The Taxpayer Education and Communication Department receives direct feedback of taxpayers on the following e-mail: taxpayerservices@mra.mu. The e-mails are replied within 48 hours and complaints are registered in MRA’s Complaint register.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Sustainable and Transferable Financial The Financial sustainability of the initiative lies in the fact that it has led to major cost savings for the MRA in terms of reduction in the use of paper (Income tax forms, envelopes, stickers, etc) a better utilisation of available resources (no need to make data capture, process paper returns, work out claim for refunds, etc). The training has been carried out by internal staff and no additional cost has been required for capacity building. The tax collection of the MRA has continuously increased since the implementation of the ATS, as follows: Year Collection 2006-2007 – Rs 34.2 billion 2007-2008 – Rs 42.1 billion 2008-2009 – Rs 47.2 billion 2010 – Rs 49.3 billion 2011 – Rs 53 billion 2012 – Rs 58 billion 2013 – Rs 61.7 billion Social and economic Economic development in this new era de[pends on the extent to which a country can harness the wonders of information technology to provide a better quality of life to their people and increase domestic and international competitiveness. We need to be doing things faster and more efficiently to be able to join the league of the high income economies and the ATS initiative goes in that direction. It encourages taxpayers to use IT, familiarise themselves with payment of tax online and save time, energy and money. It has also brought a cultural change in the sence that taxpayers not only use ICT as an educational tool but also to carry out their day to day activities differently, I,e better and smarter. Environment Through the automation of the taxation system, the MRA has stopped printing 1,200,000 pages equivalent to 200 000 tax forms of 4 pages plus 2 additional information notes. With the automation of processes, there is no need for 100 000 taxpayers to be physically present at the MRA Head office to submit their return and pay due taxes, thus resulting in a substantial saving on energy. Institutional and Regulatory The IT systems put in place to handle the ATS have constantly been upgraded since the start of its operation and the improvement in service delivery will further be sustained alongside the enhancements. Replication by other organisations MRA’s automation project proved that electronic services can and does work. It requires the drive, a small incentive and a solid communication campaign. The success of the MRA’s e-filing and e-payment strategy has incentivised other Government organisations to shift to e-services, the MRA serving as benchmark. Among the organisations that have followed the trend : 1)Registrar General Office (Online registration) 2)Supreme Court of Mauritius (Court Cases) 3)Registrar of Companies (Online Financial Statements)

 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)
Lessons learned The introduction of the ATS in Mauritius has been a fantastic experience for the Mauritius Revenue Authority. The following lessons have come out from this experience: 1)Nothing can be achieved without the support of stakeholders Without the support of the stakeholders, including association of taxpayers, NGO’s, accountants, employers, the media and government bodies, this project would not have been a success. When the MRA introduced e-services, the response was very low (around 0.2% of the total individual tax population). Without the support of the opinion leaders, the press (newspapers, TV, radio, online publications) and all the stakeholders, taxpayers would not have adopted the services in such a short lapse of time. The MRA has not only involved the stakeholders in the design of the ATS but also sought their regular feedback so as to enhance the services offered to taxpayers. The recommendation of the MRA is that although change is difficult, it is possible through the concerted efforts of all stakeholders. 2)Enforcement measures alone are not effective Customers will not adapt to change unless they can benefit from it. Instead of making it an obligation to file electronic returns, the MRA motivated taxpayers by introducing an e-filing lottery for every taxpayer who files electronic individual income tax returns. Moreover, the law was amended to provide 15 additional days for taxpayers to submit their returns providing it was done electronically and pay their taxes accordingly through the e-modes of payment. At the same time the electronic tax services have been made more user-friendly, accessible and quick, thus adapting to the life-style of the taxpayers. The Recommendation is that for an initiative to be successful, it has to benefit the general public, not only a group of customers. 3)Communication is the key to the success of implementing a new project As part of the initiative to introduce Automated Tax Services in Mauritius, the MRA has transformed the former Taxpayer Services Department into a Taxpayer Education and Education Department, thereby recruiting a Communication professional to design and implement targeted-communication strategies.. The MRA has thus explored several modes of communication to get its messages across while at the same time develop in-house communication materials. The recommendation is to invest in an in-house Communication Team that is capable of better understanding the needs of the organisation and thus develop a communication/ education strategy adapted to the specific needs. 4)Innovation is never-ending Having started to tread on the path of innovation, the MRA has realised that ICT is not a solution that the key to the solution. It is a never-ending journey as technology changes regularly and the authority has to adapt to the constantly evolving needs of its customers. For example, the MRA has been constantly enhancing the electronic returns such that today the form is pre-filled and is wizard-driven (questions-based). The recommendation is to believe in the power of technology to bring about efficiency for the organisation and improved service delivery to customers.

Contact Information

Institution Name:   Mauritius Revenue Authority
Institution Type:   Government Agency  
Contact Person:   Sudhamo Lal
Title:   Director General  
Telephone/ Fax:   +230 2075941 – Fax - +230 207 6041
Institution's / Project's Website:  
E-mail:   sudhamo.lal@mra.mu  
Address:   10th Floor, Ehram Court, Cnr Mgr. Gonin & Sir Virgil Naz Streets, Port Louis, Mauritius
Postal Code:  
City:   Port- Louis
State/Province:   Port- Louis
Country:  

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