Mitigating the cost impact of ICT system failures in tax agencies: Lessons from Uganda

• Jurisdiction: South Africa
• Author: Micheal, M.
• DOI: https://doi.org/10.47348/AMTJ/2021/i1a7
• Published date: 16 February 2021
• Pages: 113-132
• Date: 16 February 2021

113

MITIGATING THE COST IMPACT OF ICT SYSTEM FAILURES

IN TAX AGENCIES: LESSONS FROM UGANDA

ATTÉNUER L'IMPACT SUR LES COÛTS DES DÉFAILLANCES

DES SYSTÈMES TIC DANS LES AGENCES FISCALES: LEÇONS

DE L'OUGANDA

MITIGANDO O IMPACTO DE CUSTO DAS FALHAS DO

SISTEMA DE TIC EM AGÊNCIAS FISCAIS: LIÇÕES DE

UGANDA

Masembe Michael*

JEL Classification: H20, H21, H24, H25

https://doi.org/10.47348/AMTJ/2021/i1a7

ABSTRACT

Tax administrations that have adopted information and communication technology

(ICT) face th e challenge of system failures. E xhaustive literature exists on t he causes

and nature of suc h downtime or failures. Thi s study investigated the cost of downt ime

in a tax administrat ion, taking the case of the U ganda Revenue Authorit y (URA) as

a case study, and revie wing and analysing system per formance reports a nd interviews

with staff on downtime. Th e study found that while automation en abled tax

compliance, it w as vulnerable to system downt ime, which affected proc ess efficienci es,

reduced revenu e yield, lowered st aff produc tivity and raised IC T maintenan ce

costs. Existing s ystems must there fore be continuously monitored wit h clear system

perform ance level s in light of any future IC T hiccups. Th e study concluded by

recommending alternative m anual proce sses when ICT proc esses suffer downtime

while prior itising compliance supp ort systems uptime ( for example, payment systems)

to other systems du ring downti me. Overall, the ta x administration s must have a

business cont inuity strategy w ith tested downtime safeguards.

Keywords: ICT, tax administration, cost, downtime

RÉSUMÉ

Les administ rations fiscales qui ont ado pté les techno logies de l’informat ion et de la

communication (TIC) sont co nfrontées au d éfi des défa illances du s ystème. Il exist e

une littérature e xhaustive sur les causes et la nat ure de ces temps d’arrêt ou de ces

défaillance s. Cette étude exa mine le coût des te mps d’arrêt dans une admi nistration

fiscale. P renant le cas de l’Offi ce ougandais des recette s (URA), cette étude exam ine

et analyse les rappo rts de per formance d u système et les entretiens avec le p ersonnel

sur les temps d’arrêt. L’étude révèle que, bien que l’automat isation perm ette de

respecter l es obligations fiscales, el le est vulnérable aux temps d’arrêt du systè me, qui

affecten t l’efficac ité des processus, réduisent les recettes, dimin uent la product ivité du

personnel et aug mentent les c oûts de mainten ance des T IC. Les systèm es existant s

* Team leader Tax Education; Uganda Revenue Authority: masembey@gmail.com

(2021) 1 AMTJ 113

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114 AFRICAN MULTIDISCIPLINARY TAX JOURNAL

doivent donc être su rveillés en p ermanen ce avec des nivea ux de performance cla irs, à

la lumière de tout e perturbat ion future des T IC. L’étude recommande des proces sus

manuels alte rnatifs lorsque les proce ssus TIC subissent des tem ps d’arrêt. E lle préfère

également donn er la prior ité au temps de fon ctionnement des systèmes d’assista nce à

la discipline f iscale ( par exemple, le s systèmes de paie ment) par rapport a ux autres

systèmes penda nt les temps d’arrêt. Da ns l’ensemble, les administrations f iscales

doivent disposer d’une stratégie de continuité des activ ités assorti e de mesures de

protection con tre les temps d’arrêt.

Mots-clé s: TIC, administration fiscale, coût, temps d’arrêt

ABSTRATO

As Administraçõ es Tributárias q ue adoptaram as t ecnologias d e informaçã o e

comunicaç ão (TIC) enf rentam o desaf io das falha s do sistema. Existe literatura

exaustiva sobre as c ausas e a natureza de tais inter rupções ou fa lhas. Este estudo

investiga o custo dos te mpos de inacti vidade numa admi nistração tr ibutária.

Tomando o caso da Autoridade Tributária do Ugan da (UR A), este estudo analisa

e analisa relató rios de desempenho do sistema e e ntrevista s com o pessoal sobre a s

paragens. O estudo co nclui que embora a automatização permita o cum primento

tributár io, é vulnerável a tem pos de paragem do sistema, o que afecta a eficiên cia

dos processos, reduz o ren dimento das rec eitas, diminui a p rodutividade do pe ssoal e

aumenta os custos d e manutenção das TIC. Ass im, os sistemas ex istentes devem ser

continuamen te monitorizados c om níveis claros de desempenho do sistema à luz de

quaisquer futu ros soluços de TIC. O estudo reco menda processos manuai s alternativos

quando os proces sos de TIC sofrem te mpos de inactiv idade. Também prefere dar

prioridade ao tempo de fun cionamento d os sistemas de ap oio à conformidade (por

exemplo, sistema s de pagamento) a outros sistemas durant e o tempo de inactividade.

Globalmente, as administrações tributárias devem ter uma estratégia de continuidade

de negócios com sal vaguardas test adas para o tempo d e inactivida de.

Palavras-chave: ICT, TIC, administração tributár ia, custo, tempo de

inactividade

I INTRODUCTION

Many ta x administr ations do not have alternate pro cesses to serve clients

when information and communication technology (ICT) systems

are down. They adopted ICT systems to support processes for tax

registration, filing etc. Uganda Revenue Author ity (U RA) followed

suit, and within a decade doubled net revenue collections from Ugx

4.2 tril lion in 20 09 to ~Ugx 16 tr illion (UR A Revenue Collections

Report, 1991–2019). The tax agency also saw growth in the tax

register, f iling ratios and the timeliness of ta x payments. Automating

tax adm inistration processes was at the backdrop of earlier studies on

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