Spanish Tax Agency The Spanish Tax Agency was officially created by article 103 of Act 31/1990 of 27 December on the 1991 National Budget, although it only took real form on 1 January 1992. It is an organization under public law, dependent on the Ministry of Finance through the Office of the Secretary of State for Finance. As it operates under public law, the Tax Agency uses a legal framework of its own that differs from the legal framework applied to the General State Administration, so the Tax Agency enjoys a certain autonomy in budgetary matters and personnel management, although it does always uphold the same essential underlying principles of good government action. The Tax Agency s job is to apply Spain s tax and customs systems effectively and, when so mandated by law or by agreement, to act as a proxy for other public administrations from Spain or the European Union and manage their tax resources on their behalf. and collects other revenues on Autonomous Communities behalf as ordered by legislation or agreed under cooperation accords. - Collection of the European Union s own revenues. - Customs management and the fight against smuggling. - Collection of charges people pay to the Spanish public sector in voluntary compliance with rules and regulations. - Collection of revenues owed by law to the General State Administration and the public organizations linked to it or dependent on it, and the taking of legal proceedings to enforce collection. - Cooperation in the fight against certain offences, primarily offences against the Exchequer and smuggling violations. The Tax Agency is not in charge of managing the sorts of taxes that the regional governments of Spain s Autonomous Communities levy (mainly transfer tax, stamp tax, inheritance tax and gift tax) or the types of taxes that municipalities and other local corporations manage. Nor does it have the power to draft and approve tax legislation or, on the public expenditure side, to earmark public resources for any of their many different uses. The Spanish tax and customs system provides comprehensive management for a wide range of activities, including: - Management, auditing and collection of taxes owed to the State. - Important functions related with the revenues Spain s Autonomous Communities and Autonomous Cities receive; it manages personal income tax 5
Organizational Structure The Tax Agency provides a public service. Which is carried out, with a specialised administration that can quickly and efficiently adapt to changes in the social environment where the Agency operates. Structurally speaking, the Tax Agency can be broken down into Central Services and Territorial Services. It is governed by its Chairman (Spain s Secretary of State for Finance), a Director-General, a Higher Board of Directors, a Standing Management Committee and a Territorial Management Coordination Committee. CHAIRMAN HIGHER BOARD OF DIRECTORS STANDING MANAGEMENT COMMITTEE TERRITORIAL MANAGEMENT COORDINATION COMMITTEE SECURITY AND CONTROL COMMISSION JOINT COMMISSION ON TAX MANAGEMENT COORDINATION CABINET DIRECTOR GENERAL OFFICE OF THE DEPUTY COMPTROLLER OTHER SUPPORT UNITS DEPARTMENTS AND SERVICES REGIONAL OFFICES PROVINCIAL OFFICES LOCAL OFFICES CUSTOMS AND EXCISE OFFICES 1. Central Services The Agency s Central Services are organised into functional operational and support areas. The Central Services departments and services are shown in the organizational chart on the following page. 2. Territorial Services The Territorial Services follow the same scheme of organization by areas, but on a territory-by-territory basis. There are 17 Regional Offices (one in each Autonomous Community) and 56 Provincial Offices (usually covering a province apiece), containing a total of 240 Local Offices, 37 of which are customs Offices 6
Tax Management S.G. Technical Tax Matters S.G. Tax Information and Assistance S.G. Legal Assistance and Legislative Coordination S.G. Tax Verification and Control S.G. Planning and Coordination Financial and Tax Auditing S.G. Legal Ordinances and Legal Assistance S.G. Studies, Methods and Procedures S.G. Planning and Control S.G. Territorial Auditing Collection S.G. Organization and Planning S.G. Coordination and Management S.G. Enforced Collection S.G. Special Procedures Customs and Excise Deputy Directorate of Customs Supervision S.G. Operations S.G. Logistics S.G. Planning, Statistics and Coordination S.G. Customs Management S.G. Excise Management and Control S.G. Auditing and Investigation S.G. Chemistry and Technology S.G. International Relations Chairman Director General Organization, Planning and Institutional Relations Deputy Directorate Standing Technical Secretariat of the Joint Commission on Tax Management Coordination S.G. Organization and Coordination S.G. Planning and Programming S.G. Outside Communications Information Technology S.G. Data-Processing Planning and Coordination S.G. Operation S.G. Applications S.G. Customs and Excise Applications S.G. Statistical and Tax Studies Human Resources and Economic Administration Deputy Directorate of Human Resources Deputy Directorate of Economic Administration S.G. Administrative Management of Personnel S.G. Programming and Incentivation S.G. Labour Relations S.G. Budgets and Financial Management S.G. Accounting S.G. Purchasing and Contracting S.G. Real Estate and Facilities Legal Service S.G. Organization and Legal Assistance S.G. Consultative and Litigious Affairs Cabinet Internal Auditing Service Service Inspectorates S.G. Tax Revenue Budgeting, Tracking and Study 7
Guiding Principles As the public agency in charge of managing the Spanish tax and customs system, the Tax Agency has the prime objective of collecting a major part of the revenues called for each year in the National Budget. The Agency has crafted a collection style built on the basis of encouraging citizens to voluntarily comply with their tax obligations, but always adhering to the following principles: - Reducing the formal burdens assumed by private taxpayers and businesses in the compliance with their tax obligations. - Practicing fairness in the general application of the tax and customs system in order to bolster the confidence placed in the Agency by citizens and to guarantee the most efficient response to fraud and exert standard tax pressure on the entire country in its control actions. - Personalising services and establishing integral service and assistance systems for taxpayers. - Promoting Spanish Customs as the European portal to international trade. - Consolidating the Tax Agency as an avant-garde branch of the public administration in the intensive use of new technologies. - Opening the Agency up to institutional collaboration, forging closer ties with Spanish society and with the public administrations of other countries. - Safeguarding the integrity and confidentiality of information within the framework of a Tax Agency that is more transparent to citizens. - Consolidating an organization built on the values of personal integrity and professional ethics shared by all of its members. - Developing internal communication and coordination within the Tax Agency to their fullest in order to generate synergies. - Promoting the professional development and training of Tax Agency employees and adapting their working conditions to a total quality environment. - Being flexible in the efficient use of the available human and material resources. Using these principles as its guide, the Tax Agency pursues two fundamental lines of strategy. First, it aims to provide citizens with direct, immediate facilities for discharging their tax obligations voluntarily. To do that, the Agency offers taxpayers more and better services taking advantage of state-of-theart technology. Secondly, the Agency takes vigorous action to check tax payments and fight tax fraud, so as to ensure that the tax and customs system is applied effectively. That way, when citizens are called upon to contribute to the public pocket, that obligation is applied fairly to all. These strategic lines emerge out of the idea of total quality. Quality Management, as the factor which guides the entire organization toward its objective of keeping taxpayers completely satisfied by continuously improving its services to meet taxpayers expectations, is an indispensable tool within the Tax Agency for achieving its goals. The consolidation of these methods and techniques guarantees permanent evolution toward an increasingly modern, flexible, efficient and effective institution. In particular, by working to these quality standards, the Agency is able to take more preventive action rather than adopting an attitude of mistrust and reinforcement of controls after the fact. Hence, the importance of management control and supervision, which must be a key factor in any modern organization to guarantee that its managers possess the most up-to-date 8
knowledge of the services they are in charge of, thus avoiding the risk of mismanagement and enabling the dissemination of the best practices In order to consolidate the Tax Agency s Quality Management, both in terms of the work it currently performs and any work it proposes to undertake in the future, a Quality Plan has been implemented with the following objectives: - To promote and disseminate the culture of quality in all departments of the Tax Agency. - To establish the mechanisms which make it possible for the Tax Agency to apply standard Quality Management models. - To fortify the channels of communication between the Tax Agency and other public and private organizations which can offer their experience and collaboration in the area of Quality Management. - To encourage the internal and external acknowledge at the national and international levels of the improvements to the services offered by the Tax Agency as a way of getting Agency employees and management more involved in Quality Management. Human Resources The total number of employees working for the Tax Agency as of 31 December 2003 was 27,504, which represents a decrease over the same date last year of 157 employees. There has therefore been a decrease of 0.33% in total functionary personnel and a decrease of 2.7% in regular employed personnel. In absolute figures, 2003 saw a reduction of 83 civil servants and 74 employees. These figures do not include the 1,251 part-time employees hired to help out in income tax season. These figures, when compared with the Tax Administrations in comparable neighbouring countries, are not at all high but rather on the low side. The distribution of the Tax Agency s staff as of 31 December 2003 was as follows: - 88.1% of staff are employees of peripheral services while 11.9% of all employees work for central services. - Contract employees account for 9.7% of the total while officials account for 90.3%. 9
GRAPH I PERSONNEL DISTRIBUTION BETWEEN CENTRAL AND TERRITORIAL SERVICES 2.399 3.002 272 21.831 TABLE No 1 PERSONNEL DISTRIBUTION BETWEEN CENTRAL AND TERRITORIAL SERVICES CENTRAL PERIPHERAL TOTAL SERVICES SERVICES Officials 3.002 21.831 24.833 Non-Officials 272 2.399 2.671 Employees TOTAL 3.274 24.230 27.504 Source: Human Resources and Economic Administration - By civil servant s qualification groups, the figures for groups C and D are very similar. Group D is still the largest, with 7,679 staff members (31% of the total staff), and the majority of them belong to the General Auxiliary Corps. Group C has 7,948 civil servants (32% of the total); most of the people in Group C are members of the General Clerical Corps and the Corps of Customs Supervision Agents. Group B holds third place, with 29%, and is mainly made up of the Exchequer Technicians Corps, in addition to the Executive Corps of Customs Supervision. Lastly, there is Group A, which accounts for 8% of the Agency s total personnel; numerical superiority there is held by the members of the Higher Corps of Tax Auditors and Customs Auditors. - The proportions between the different groups of civil servants experienced minor differences similar to those in previous years: decrease in the relative importance of Group D (4.7% less: decrease of 366 people) and increase in Groups C and B (increase of 2.6%: 200 and 1% 70 people, respectively), as a result of internal promotions. Group A remained practically unchanged (0.9% increase: 18 people). 10
TABLE No 2 PERSONNEL DISTRIBUTION BY QUALIFICATION GROUPS CIVIL SERVANTS AS OF 31/12/2003 Number % GROUP A Executive Tax Auditing Personnel 1.509 Executive Customs Supervision Personnel 192 Higher Systems and Information Technologies Personnel 105 Public Finance Architects 50 Chemistry Professors for Customs 30 Rest of Group A 164 TOTAL FOR GROUP A 2.050 8 GROUP B Finance Specialist 6.134 Executive Customs Supervision Personnel 399 Systems and Data Processing Management 225 State Civil Administration Management Personnel 129 Rest of Group B 223 TOTAL FOR GROUP B 7.110 29 GROUP C Public Finance Agents 4.117 General Clerical, Specialised Tax Administration Personnel 1.723 General Clerical, State Administration Personnel 267 Auxiliary Data Processing Technicians 697 Customs Supervision Agents 1.027 Rest of Group C 117 TOTAL FOR GROUP C 7.948 32 GROUP D General Auxiliary, Specialised Tax Administration Personnel 7.246 General Auxiliary, State Administration Personnel 238 Rest of Group D 195 TOTAL FOR GROUP D 7.679 31 TOTAL FOR GROUP E 46 - TOTAL NUMBER OF OFFICIALS 24.833 90 TOTAL NUMBER OF NON- OFFICIALS EMPLOYEES 2.671 10 TOTAL 27.504 100 Source: Human Resources and Economic Administration - The Management, Auditing, Collection and Customs operating areas employ 19,953 people, which accounts for 72.5 percent of the personnel. By area, Tax Management has 6,737 employees, followed by Auditing with 4,998, Collection with 4,556 and Customs with 3,662. 11
GRAPH II PERSONNEL DISTRIBUTION BY AREAS 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 Tax Mgmt Collection Tax Data Processing Auditing Customs Other - An analysis of the breakdown of personnel by sex shows that 52.7% are women and 47.3% are men. - The average employee age is 44.4; the average age of male employees is 44.8 while that of female employees is 44. By Groups, the group with the highest average age is E (at 55.8) and the lowest being Group B (at 43.5). By age group, the breakdown is as follows: 12
TABLE No 3 PERSONNEL DISTRIBUTION BY AGE AGE RANGE 18-32 33-40 41-48 49-56 57-70 TOTAL NUMBER OF PERSONS 1.183 8.658 10.733 4.869 2.061 27.504 % 4 31 39 18 7 100 Source: Human Resources and Economic Administration TABLE No 4 PERSONNEL DISTRIBUTION BY SEX WOMEN % MEN % TOTAL 14.496 52,7 13.008 47,3 27.504 Source: Human Resources and Economic Administration Income Budget The Tax Agency has an annual budget of its own whose two main features are that its overall total is restrictive in nature and its credits are distributed by economic categories pursuant to an estimate. The Agency is financed fundamentally by current and capital transfers from the State, which make up over 95% of the Agency s definitive forecast revenues. The rest of the income budget comes basically from charges and other revenues. In fiscal 2003 a total of 1,093,291,000 euros in revenues were applied to fund the Agency s budget; the bulk of that, 1,040,093,000 euros, was provided in the form of current and capital transfers. One part of these transfers is the Tax Agency s share of the sums it collects in assessments and collection management proceedings, or comes from administrative acts decided or ruled by the Agency in the sorts of tax management matters that fall within its particular sphere of powers, which, under point five b) of article 103 of Act 31/1990 on the 1991 National Budget, is found by multiplying this collected amount by a percentage that is set each year in the National Budget. In application of article 18 of Act 52/2001 on the 2002 National Budget, the percentage for 2003 is 5%, and for the first time a limit is set on this income, which cannot be in excess of 50 million euros. 13