Merging of TAX - VAT Services in Cyprus

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TAX - VAT Merging
Contract Title Merging of TAX - VAT Services in Cyprus
Contract Number n/a
Funding Period no funding
Funding Agency Cyprus Academy of Public Administration



The Merging of TAX - VAT Services in Cyprus was an ad-hoc project, which has taken place between 7-20 Nov 2013. Following the collapse of the Cyprus banking system in 2012, the EC and international monitoring organizations have put pressure to the Cyprus government to fulfill an obligation, which was long past due: the merging of the VAT and TAX services and legal systems; they were operating as two separate independent departments, using different laws, different policies and procedures and lacking any electronic communication. The Cyprus government, specifically the Ministry of Finance, requested help to facilitate the smooth merging of these operations and overpass the human factor and the unwillingness for change. Noteworthy was the extremely short timeline (within a few weeks) and the fact that the government paid insignificant fees (per hour consulting fee) for a project that would save a loss of almost one million euro a day; the reason being that due to time restrictions it would not have been possible to go through a formal tender process.

Summary

During the period 7-20 November, the project team of Future Worlds Center, in collaboration with the Cyprus Academy of Public Administration (CAPA), conducted three consultation meetings using the Structured Democratic Dialogue Process (SDDP) with all interested stakeholders in-order to analyse the smooth transition of merging the IRD and VAT Services. The first SDDP included 24 internal stakeholders, i.e., representatives from the Department of Inland Revenue (IRD) and Value Added Tax Service (VAT) Services, had the aim to identify the Challenges they would face during the transition. The second SDDP involved 12 external stakeholders, i.e., representatives from business, auditing, legal and other bodies with primary target to define their Expectations from the new system. The third one involved the Change Management Team supported by experienced Staff from the IRD and VAT Services and representatives from respective Training Departments with the aim to explore the Actions and Scenarios required to satisfy the identified Challenges and declared Expectations. The SDDPs have been implemented by the Cyprus Academy of Public Administration (CAPA) with the support of international experts in the methodology. In total, the 48 individuals invested 500 person hours for this exercise.

Methodology

The special momentum of the action was the SDDP methodology which was applied and which generated new ideas and strategies on the challenges, expectations and actions that the representatives provisioned for the smooth transition of merging the IRD and VAT Services. The approach promotes focused communication among the participants in the design process and their ownership of and commitment in the outcome. It is designed to prevent groups from prematurely focusing on decisions before they have adequately defined the situation, and conceptualize alternatives.

Objectives

To identify the Challenges, Expectations and Actions to ensure a smooth transition to a new system that would arise from the merging of IRD and VAT department.

SDDPs

The Structured Dialogue Workshops explored the challenges they would face during the transition, the Expectations from the new system and the Actions and Scenarios required to satisfy the identified Challenges and declared Expectations