An Innovative Approach to Tax Administration Performance Management

The pressure for outcome–based performance management increases performance and evaluation activities at all government levels. Research on public sector performance management systems, however, points to problems in the design and management of these systems and questions their effectiveness as policy tools for increasing governmental performance. It has been reported that the problem involves the lack of integration between performance management at the strategic, operational and individual levels. In the tax administration context, the integration issue in performance management has also been highlighted. However, the existing literature does not propose how to overcome this issue. This paper introduces an innovative way to undertake tax administration performance management based on an integrated and open systems model. The distinct feature of the model is that it highlights the critical process of transforming inputs into outputs/outcomes in a tax administration by diagnosing the interrelation of the components in the process, i.e. formal organisation, informal organisation, task and people. These components contain both institutional and behavioural factors which have significant effec