Restructuring of revenue administration in turkey

Abstract

Although tax systems are devised and guaranteed by laws, they require a well-organized, flexibly-structured and modern revenue administration that can adapt to changes quickly for the purpose of attaining desired goals. In recent years there have been a number of changes in the organizational structure of the Turkish Revenue Administration, whose foundation dates back to the Ottoman Empire. Of all, the most important and influential change was made in the year of 2005. Among the most compelling reasons for this change is the problem surrounding the organizational structure. In general terms, these problems were as follows: provincial units were not directly linked to the central administration, direct and fast communication could not be realized among the units within the organization, resources could not be used productively and effectively, processes of assignment and procedure were disconnected from each other, there was a quality problem in taxpayer services, the existing system did not completely pave the way for a participatory and transparent administration style, the process of creating new tax policies were inadequate, and an objective system of performance evaluation to increase activity and productivity in the system was not adequately formed. Reform efforts in the organizational structure of the revenue administration started with a view to overcoming problems generally associated with traditional organizational structures, to deal with advancement in information technologies, changes in ways of approaching to taxpayers, and largely to keep up with new processes and procedures in revenue streams and administration and their structural reorganization in developed countries. Intended goals are set out in Law no. 5345 published in the Official Gazette dated 16 May 2005. Since then, innovative changes have followed especially towards a new organizational structure, new job descriptions and a new set of functions to create a more responsive and dynamic structure in the revenue administration at all levels including the units in desperate need of overhaul to keep pace with new international developments and challenges especially in the field of technology. The study examines the restructuring of the Turkish Revenue Administration in terms of its organization and management within a historical perspective and through stages in which the proposed changes occured. Within this framework, the study is divided into four main sections: the historical development of the revenue administration is visited briefly in the first place, then the administrative transformation of the Turkish Revenue Administration is studied in detail under the second heading within the framework of the years before and after 2005 when the most important step in transformation was realized, thirdly the paper will evaluate the results of the restructuring/transformation that took place, and finally, it will conclude by addressing the ensuing circumstances in the revenue administration with reference to particular challenges posed by its restructuring process.