A collaborative model in local tax administration

Acronym of the case:

SumaModel

Web address of the case:

http://www.suma.es

Country of the case:

Spain

City/region:

Province of Alicante

Posting Date:

3 February 2010

Last Edited Date:

15 June 2010

Author:

Ramon Andarias (Suma, Local Tax Administration - Provincial Council of Alicante)

municipal | virtual_office | provincial_council

Type of initiative

Project or service

Case Abstract

Suma is a public organisation that provides tax administration services to 141 town councils in the province of Alicante. Suma has implemented an efficient system which has enabled the municipalities to (1) improve ratios in tax collection; (2) increase the accessibility of information to citizens in its office or mobile offices and Internet Virtual Offices; (3) improve the quality of work for employees by providing tools for the autonomous and complete solution of tax-payersâ€™ problems. This model, manly based on technology but also with organisational components, has proved to be an excellent solution for other local authorities in Spain.

Description of the case

Domain

eGovernment

Topic

Efficiency & Effectiveness, Benchmarking | Multi-channel Delivery | Regional and Local

Sector

Tax

Start date - End date

January 1998 (Ongoing)

Date operational

January 2003

Target Users

Administrative | Citizen

Target Users Description

As a province-based organisation Suma originally provides local tax administration services to the 141 municipal councils in the province of Alicante, which surface area is 5.817 Km2. This province ranks as the 5th most populous of the country, with almost 1,900,000 inhabitants, from which at least 350,000 are not Spanish, one of the highest ratio in Spain. This part of the Spanish Mediterranean has undergone an enormous urban growth, mainly linked to the second homes for nationals and also for citizens from UK, Germany and other Western European countries.

In this context the role of a supramunicipal authority is crucial, as not all councils have resources enough to do the job: updating of censuses for local tax purposes (real estate properties, motor vehicles', businesses, capital gains, garage entrances,..). The existence of a supramunicipal authority dealing with these issues is perhaps the best and most cost-effective way for the councils as it uses "economies of scale + dimension" management principle. For the small towns it is the probably the only solution, as they cannot usually afford to have or maintain tax-dedicated information systems, nor tax specialists nor do the billing and collection efficiently. It is also simpler for the customers as they only have to go to one place to fulfil their local tax obligations.

To fully understand the complexity of this activity we must keep in mind that some powersÂ of local tax administration are not in the hands of the municipalities, they largely depend on other State bodies. They must establish close relationships with a number of organisations: State Tax Agency, Central Vehicle Registry, Central Cadastre, notaries, among others. This scenario defines the target group of this case: city councils, citizens, business owners and in general any person related to the municipality.

Scope

Local (city or municipality)

Status

Operation

Language(s)

English | Spanish

Other

Valencian/Catalan

Policy Context and Legal Framework

Suma is a public, province-based organisation that provides tax administration services to the municipal councils in the province of Alicante, Spain. It operates independently of other state and municipal bodies (it has its own board of councillors) but closely connected to many organisations: city councils, Central Tax Agency, Cadastre Office, banks, among others, Its foundation dates back to 1990 and was the product of previous â€œtax-collection servicesâ€ of the Provincial Council. Since then, Suma management has had a clear determination to foster an organisation capable to provide high quality tax administration services the all city councils and citizens of the province. These efforts have finally resulted in an efficient tax management system much appreciated by all the public and also a source of inspiration for other local authorities. Suma is legally accountable to the Provincial Council (Diputacion) and it is chaired by the President of this Council.

Project Size and Implementation

Type of initiative

Other

Overall Implementation approach

Public administration

Technology choice

Proprietary technology | Standards-based technology | Open source software

Funding source

Public funding local

Project size

Implementation: Larger than €10,000,000

Yearly cost:

€500-999,000

Implementation and Management Approach

New developments in products and services are based on requests from three sources: Management, local authorities and the general public. The Management establishes specific aims in the annual strategic plan. These aims are published in the Annual Report by which a public commitment is made before the general public.

The Local Authorities propose new services at the annual meeting between Suma and the technical and political representatives of each of the 141 town councils associated to Suma. At this meeting, the revenue results of the previous year are presented and discussed, and also Suma officersÂ gather suggestions and requests from the Council that will later form part of the development plans for the coming year.

The General Public submits requests via the Opina (Your opinions count) quality programme for new services or improvements in the customer service. Suggestions and requests are reviewed, structured and, where appropriate, included in the specific goals of the six-month plans. At the end of each year, Suma board of Directors evaluated the level of achievement and make sure that the new the developments are aligned with the global goals of the organisation.

Multi-channel issues: The services are delivered in a multi-chanel scheme.

1. Suma office network The office network of Suma in the province of Alicante has 44 centres offering assistance to the taxpayer. Each deals primarily with its own area, although the centralised database enables us to resolve taxpayer issues anywhere in the province. The offices are permanently connected to the central office by leased lines. The network has an automatic back-up system that operates in case of breakdown at any of the access points.

2. Mobile units. In addition to the permanent offices, Suma has 25 units that visit the remote municipal and rural areas on a regular basis.Â These customer service points have the same operational facilities as the branch offices.Â They consist ofÂ a laptop computer andÂ printer and a broadband connection systemÂ that allows a secured connection to the central database.

3. The Local Tax Contact Center has been recently reinforced in 2009. The service has evolvedÂ fromÂ past small telephone service to the present professional, efficientÂ call center . This service will ready to fulfil the requirement of the new e-goverment Act to come into force in 1 January 2010. New VoIP technology, call recording facilities and SMS, email, Fax integrated systms allow the opertaor to resolve most customer enquiriesÂ on line. This service is multilingual and opened to public every working day from 8 to 20h.

4. Virtual Office for taxpayers Suma Internet Office allows any digitally identified taxpayer to carry out the following operations: â€¢ Visualise his/her debts and records of payments â€¢ Dispatch applications, claims and written documents â€¢ Up-date personal details â€¢ Issue orders for direct debit or standing orders â€¢ Follow-up of procedures pending and resolved â€¢ Create a â€œtax shopping-basketâ€ and payment of debts on-line â€¢ Set a Personal Payment Plan for the annual taxes and fees.

5. Internet office for Municipalities Each city council has got a secured connection to Suma database 24x7. All municipalities can make online searches in their taxpayers accounts, they Â¡can consult how the municipal annual balance is progressing, they can download a number of activity reports

6. Intranet for employees. It allows the sharing of knowledge, procedures, etc.

Technology solution

The use of technology is compulsory for the tax administration activity as large sets data must be processed. But the technology must not be considered the objective, quite the opposite it must be regarded as a means to gain efficiency. To achieve the excellence in the tax administration activity, organisations must focus on the customer/taxpayer. Bearing these objectives in mind, it is easy to infer that technology in tax administration means integrated software with a one-stop-shop implementation; comprehensive work flow systems where every document or form is included in the information system; easy-to-use internet websites with on-line information and payment options; customer service network connected by broadband lines; mobility to allow service in remote areas and real-time process monitoring.

Partcularly Suma uses the followingÂ Â Information System t to provide the necessary services has

4-processor cluster Server to manage the central database (tax administration)
15 TB S.A.N system providing service to all servers
18 servers for the various services: Intranet (knowledge management), Internet website,Â Digital Cartography, testing enviroment for programming, virtual office for customers andÂ city councils, web services.
5Â servers for vertical servicesÂ (accounting, human resources, employee portal
Firewall /Antispam appliances or DMZ schemes for peripheral security

We use virtualisation schemes where possible (VMware)

The software solution used for the core activity is not commercial, but designed and coded by Suma. The database is ORACLE and theÂ web services are based on open standards when possible (Jboss, Linux, Java, XML..) Some digital-map services use .NET architecture and the middleware used include Microsoft products among others.

Impact, innovation and results

Impact

There is no common scale of indicators in the Spanish local tax system, which might be used by municipalities to establish comparisons between them. Since it was set up, Suma has published its results in its Annual Report and publicised them as widely as possible. Suma has also organised forums of debate and has put forward a multitude of indicators that might be applied in this activity. At its 2001 annual conference, Suma proposed the use of the following three indicators which might be used to measure parameters of efficacy, cost-efficiency and quality for a supramunicipal body.

Efficacy: Percentage of tax bills collected in the year over the total number issued. In the case of Suma this figure has risen from 75% to 96% in the last 10 years.

Cost-Efficiency: The cost of the service for the municipalities. The cost of billing and collection is a fixed rate. If we include the enforcement procedures the cost of this comprehensive outsource service is around 5%. It comprisesÂ the customer service netwiork, buildings maintenance, telecomm costs, personnel (around 490 employees), operational costs, bulk mailing, enforcement costs)

Quality: Suma performs an independent survey every 2 years to check the citizensâ€™ perception of its services. In the case of Suma the score has risen from 6.5 out of 10 in 1998 to 8.5 today.

The challenge for Suma is not to achieve good results in one of the three indicators, but rather to achieve balanced improvement in each of them at the same time Another qualitative evidence is what competitors or colleagues think.

In this respect we are proud to say that Suma has been proposed as an efficient model of local taxation management by other local authorities. A clear proof of that is that in the lastÂ 5 years, this model has awoken great interest in other councils and organisations both inside and outside Spain. Suma has helped other municipalities to improve their results. It has participated in study reports and consultancy papers about local taxation in Portugal and Spain. As detailed below Suma has hosted numerous study tours for different national and international organisations and it has also been frequently visited by other local authorities of Spain to know more about our system. Since this model was implemented in 2005 in Majadahonda City Council (Madrid Regional Government) the tax revenue collection has improved dramatically.

Let us finally add that this project has not finished yet, rather the contrary it is growing and new ideas and Long-Term Strategic Plans are in progress to achieve better results.

Suma has designed and developed this tax administration software and obviously it has had to solve a number of technological issues: networking , mobility challenges, security/privacy problems, etc. but the new approach lies in the unique overall integrated vision of the functionalities. This is a overview of its feautures:

- It has been designed to integrate all technologies, allowing every piece of information relevant to taxes to be included in the database, be it alphanumerical, graphical, photographic or scanned images.

- The central database is simultaneuosly accessed and updated by all the users, employees, taxpayers, municipalities. The economic information is updated no later than 24 hours after the tax bill has been paid.

- It implements principles of simplification of procedures, bottleneck removal and reengineering.

- It allows a real polivalence of employees thanks to a simple online guide messaging; The result is that no tax specialists are required in normal operations as any employee can solve the majority of cases.

- There are online connections to external databases (State vehicle register, Cadastre, State Tax Agency); this results in less delays.

- All procedures are embedded in the software. Satellite and offline software solutions areÂ always avoided.

- Powerful EIS tools to monitor the activity by the management on a daily basis - Every customer service office point allows on-line payment , as there exists a connection to virtual banking.

- Digital cartography and aerial photograph is accessible from the software. The information is stored in the central database, but as it is smartly structured it can be delivered very rapidly

- All officers in mobility can perform the same operations as any branch office.

As a conclusion, it can be deduced that Suma software has achieved the objective, by "making things easier" to the citizens,Â by implementing the "one-stop shop" and "one single visit" concept, virtual or face-to-face.

Track record of sharing

Suma is a regular speaker in conferences and courses about local taxation. It has participated in a large number of events related to the different aspect of its model: human resources techniques, taxation and technology. Here is a selection of them:

October 2002. 6Âº Congreso municipalistas. UIM. Dominican Republic

February 2003. Congreso de la Asociacion Nacional de Municipios portugueses. Lisboa

Mayo 2004. Servicios Internet suministrados por Suma. Alicante

February 2005. International Conference on Local Taxation and Valuation. IRRV. Alicante

June 2005. InformÃ¡tica tributaria. MÃ¡laga.

August 2005, ValuaciÃ³n sin fronteras. IAAO conference. Mexico City.

June 2006, Software for tax administration. The case of Suma. Canary Islands

July 2006, European Mediterranean Conference on Information Systems. Alicante.

October 2006, Encuentros de GestiÃ³n y polÃticas pÃºblicas. Toledo

May 2007, TecnologÃas de la informaciÃ³n y recursos humanos. Alicante -

University of Alicante, summer courses of 2004, 2005, 2006

April 2005. Modelo supramunicipal de Suma. LIncoln Institute. Curitiba (Brasil)

September 2007. IRRV Scotland Conference, Crieff, Perth UK

September 2008, Reno, NV, International Association of Assessing Officers annual conferenceÂ

June 2009, International Property Tax, Warsaw International Conference

September 2009, Louisville, Kentucky, International Association of Assessing Officers Annual conference.

Presentations to Spanish Provincial Councils. Numerous presentations and work sessions have been given to delegations from different Spanish city and provincial councils thta have visited our premises

Study Tours hosted by Suma. February 2005. International conference of the Institute of Revenues Ratings and Valuation: taxation experts from 41 countries; November 2006. European Project "Modernization of Municipalities in Syria". Experts from 6 Syrian cities and consultants; February 2007. European Project DACSSILTAX. Experts from UK, Bulgaria, Czech Republic and Romania

European Projects. Suma has been a partner in a European project, named DACSSILTAX "Developing Administration and Customer Service Skills in local Taxation".Â Some aspects of Suma model have also been included in the training material. Several articles were published along this project. Suma is at present developing a Leonardo Mobility Project together with 3 UK City Councils and IRRV to exchange experiences in the field of local taxation Customer service.

Apart from these good-practice dissemination activities, Suma has influenced in some initiatives to improve tax collection indexes in other municipalities.

The potential of Suma experience in tax administration as a supramuncipal perspective is much appreciated by national and international bodies. It is the only known case of aÂ Spanish Local Government bodyÂ providing tax administration services to other local authorities out of its natural provincial context. ItsÂ model has been positively valuedÂ byÂ the most relevant world local tax-related organisations: IAAO, IPTI, Lincoln Institute of Land Policy, IRRV. Suma has made consultancy papers for Madrid City Council and for the National Association of Portuguese Municipalities.

Suma takes part in training programmes of the Spanish Federation of Municipalities and Provinces and participates in post-graduates courses (master in tax administration) at the University of Alicante.

Lessons learnt

1) Despite the complexity of the local taxation in Spain, it is feasible to develop a model that can be used by more than one municipality. Our experience is positive but requires effort and motivation. We are convinced that Suma supramunicipal model can be used byÂ other countries whether ifÂ the local tax administration sytemÂ is not fully developed or in more developed systems byÂ extractingÂ the key good practice points and implementing them inÂ their current system

2) Technology in the local taxation context is a necessary tool, but it must be used based on a practical approachÂ the customer-centric concept . We have found that it can be an excellent facilitator if (a) it can reduce the â€œlife-time of the taxâ€, i.e. the time period between the property or service becomes liable for taxation and the payment is made, as it has a direct impact on the municipal finances; (b) That it improve efficiency by reducing the errors (c) That it increase the multitask-level of personnel, (d) That it makes easier the task of the tax-payers in complying with their tax obligations.

3) In the old atom-based economy every production unit had a cost. In the new bit-based economy, the cost of the unit reproduction is low (the bits can be easily copied), but other costs must be considered: data migration, training, organisational restructuring, maintenance,etc.. "Software is not enough" to achieve the objectives. Motivational and organisational issues must also be considered.

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