OECD Tax Administration Maturity Model Series
What are maturity models?
Maturity models are a relatively common tool, often used on a self-assessment basis, to help an organisation understand its current level of capability in a particular functional, strategic or organisational area as well as the type of changes that would be likely to enable the organisation to reach a higher level of maturity over time. Maturity models work by setting out broad-brush descriptions of capabilities and performance across a number of levels of increasing maturity.
Maturity models are generally descriptive in nature, with a focus on processes and the broad outcomes of those processes, rather than being heavily based on metrics. This recognises that even where the metrics chosen may indicate a good or less good outcome, they do not by themselves show how that outcome has been achieved, the sustainability of the outcome or its robustness and adaptability to changes in the external environment. By their nature, maturity models are not prescriptive as to the details of processes nor as to how broad outcomes should be achieved. There is no one-size-fits-all nor any detailed method that should be preferred to another in all circumstances.
The FTA maturity models
The OECD Forum on Tax Administration (FTA) first developed a maturity model in 2016 in order to help tax administrations assess digital maturity in the two areas of natural systems/portals and big data. The digital maturity model was introduced in the 2016 OECD report Technologies for Better Tax Administration.
Building on this, work began in 2018 to develop a set of stand-alone maturity models covering both functional areas of tax administration, such as auditing and human resource management, as well as more specialised areas such as enterprise risk management, analytics and the measurement and minimisation of compliance burdens. In designing the maturity models, it was decided to use the middle level, termed "Established", to provide a description of where, on average, FTA members may be expected to cluster. Using this as an anchor, the other levels of maturity were fleshed out providing a pathway from "Emerging" to "Aspirational" with the latter maturity level seeking to describe what might be possible in the future given expected developments. There is also no judgement within the models themselves as to what the optimal level is for a particular tax administration. This will depend on their own circumstances, objectives and priorities.
The aim is that over time a series of tax administration maturity models will be published in downloadable format covering a wide range of tax administration activities. The intention of the models is:
- To allow tax administrations to self-assess through internal discussions as to where they see themselves as regards maturity in various activities and functions
- To provide officials working in an area, including senior leadership of the tax administration, with a good oversight of the level of maturity based on input from other stakeholders across the organisation.
- To help facilitate discussions on future strategy as well as identifying areas for further short-term improvement, including where that needs to be supported by the actions of other parts of the tax administration.
- To allow tax administrations to see where they sit compared to their peers.
Tax Debt Management Maturity Model
The Tax Debt Management Maturity Model covers one of the major tax administration functions, employing around 10 per cent of tax administration staff and dealing with outstanding collectible debt of around EUR 820 billion across FTA members (2017 figures). The model was developed by a group of FTA members and refined through a pilot undertaken by a wide range of tax administrations, including some developing countries. This report sets out the results of that pilot which allows administrations using the model to compare their own maturity in the different aspects of tax debt management to that of their peers.
Tax Compliance Burden Maturity Model
The Tax Compliance Burden Maturity Model looks at the core elements of successful compliance burden measurement and management, including engagement with policy makers. This is an increasingly important cross-cutting consideration for tax administrations as excessive compliance burdens can both undermine tax compliance as well as adversely impact economic growth. The model was developed by a group of FTA members and refined through a pilot undertaken by a wide range of tax administrations, including some developing countries. This reports sets out the results of that pilot which allows administrations using the model to compare their own maturity in the different aspects of compliance burden measurement and management to that of their peers.