PHILIPSBURG--Finance Minister Ardwell Irion on Thursday gave Members of Parliament (MPs) an insight into the reform measures for the Finance Ministry in the country package.
The country package focuses on two primary areas for the Finance Ministry – financial management and tax reform/Tax Administration.
The ministry began with the research of current financial work processes on July 26, Irion said. The ongoing financial management projects will ultimately lead to the new design of financial management, new design of budget process, cleaned-up general ledger, an improved presentation of the annual accounts and new organisation design.
Government Accountant Bureau SOAB is carrying out a review of the current financial management, existing bottlenecks and flaws in the current workflow. Once validated by the Ministry of Finance, research of the new design of the financial workflow will be conducted. The estimated completion time for a new and improved main financial work process is approximately end February 2022, Irion noted.
He said in the final stages a “fit-gap” analysis will be conducted of software, workflow and new design of the organisation most suitable for the financial workflow.
The cleaning up of the general ledger and database has already started with the desk research. This project will be financed by the Netherlands and a commitment has already been given. The cleaning-up project is estimated to take up to nine months with an estimated end date in September 2022. This project will co-exist with the compilation of the annual account of 2021, Irion said.
He explained that the budget process had started in the first week of October 2021. The desk research into a new budgetary model has already been carried out. Interviews were held with internal (all secretaries general and controllers of each ministry) and external stakeholders such as SOAB, the Advisory Council and the General Audit Chamber.
The draft report for the budget process is expected around the end of this year. He said some bottlenecks had been identified in the budget process and the major one is the lack of technology to consolidate the budgets from the various ministries and the lack of a formal budget policy process which can facilitate the accountability for each ministry.
According to Irion, the general outline of tax legislation reform has been presented to the Council of Ministers (COM) and Parliament. The discussions held with Parliament have been discussed with the Netherlands, International Monetary Fund (IMF), Fiscal Affairs and the cabinet of the Minister of Finance.
“These discussions will lead to more concrete outlines of the proposed tax reform which will be presented again to COM and Parliament. Upon approval of the package of intended reforms by Parliament, the legislation will be drafted.,” Irion explained. Reform of the Tax Administration has been delayed due to a lack of financial assistance and the absence of a programme manager. Four applications for the function of programme manager were received and the selection process will start soon.
Common reporting standard (CRS) and compliance are additional measures in the country packages. The Netherlands will provide assistance in the form of funds; that commitment has been made.
The reform of the Tax Administration is divided into two phases: Phase 1 consists of several quick wins – the cleaning of the database; clearing of backlogs in levying and collection of taxes; a study to acquire the most appropriate information and communication technology (ICT) system and a project for the recruiting and educating of graduating students as well courses for existing staff.
International exchange of tax information, CRS and compliance are additional measures in the country packages.
Phase 2 Consists of organisational transformation (target operating model, including change and communication management); ICT modernising (including processes and procedures); housing and the strengthening of the current organisation.
“These projects will lead to a new tax organisation with new tax work processes,” Irion told MPs.
https://www.thedailyherald.sx/islands/irion-gives-insight-into-reform-measures-for-finance-ministry
