Digitalising The Taxation in Sri Lanka: The Importance of Change Management

The most challenging aspect of digital transformation is not the technology per se, but how to get people to be comfortable with using it. When the Inland Revenue Department (IRD) of Sri Lanka first implemented the Revenue Administration Management Information System (RAMIS) as their one-stop tax management platform in July 2014, it was not without struggles.

“Generally, the main cause of resistance is the lack of awareness. But the training we obtained at Singapore e-Government Leadership Centre, NUS-ISS helped to mitigate that, and fill the gap,” said Mr. D.U.A. Jayawardhana, Commissioner of Inland Revenue, IRD, Sri Lanka. The training helped to “make up our mindsets and direct our subordinates towards the full implementation of the automation programme,” added Mr. Jayawardhana. 

The Singapore e-Government Leadership Centre (eGL) at NUS-ISS was engaged in 2012 to commence the learning journey of Planning, Leading and Managing the Change in mind-set and accelerate adoption of the technology solution. A 5-day leadership program was carefully custom designed for IRD, aimed at equipping the officers with an understanding of Change Management and Transformation. The programme commenced in 2013, and to date, eGL has conducted 12 sessions over the last 3 years in Singapore and Colombo, taking 360 IRD offices on this learning journey.
egl-SLK2The current programme was held from 24 - 28 July 2017, with workshops designed to help the officers apply the concepts and lessons to their context. Site visits to facilities, such as the Singtel Cybersecurity Lab, Monetary Authority of Singapore (MAS) and Inland Revenue Authority of Singapore (IRAS), as well as learning from expert speakers, provided insights to the respective domains.

The struggles with tax collection

Before RAMIS was adopted into IRD’s workflow, the Sri Lankan government was struggling with the old taxation system. “Our collected revenue didn’t match the GDP, and the figures were very low compared to other countries. Moreover, the amount was decreasing each year. So it was an urgent matter that we had to look into,” said Mrs. B.A.D.D. Herath, Senior Commissioner of Inland Revenue, IRD, Sri Lanka.

The taxation system that Sri Lanka was using previously was only partially automated, and there were serious issues with regards to distributing returns and thereafter, collecting them. “A lot of times, business addresses weren’t updated, so our notices could not reach them. Payment was monitored by people, so while we do take actions against non-filers, they were not handled efficiently,” explained Mrs. Herath.

Mr. Jayawardhana added, “The notices sent out were outdated because by the time people received the notice, the payment had already been made. These additional steps arose due to limitations of the previous system and added to the workload of civil servants.”

A robust and proactive system for tax management

RAMIS was customised from Singapore’s IRAS application.  With the implementation of RAMIS, the IRD is now able to be proactive – instead of reactive – in terms of tax collection. Mrs. Herath elaborated, saying that the main thing that has changed was the Management Information System (MIS). “Earlier, it would take us weeks to access information to facilitate policy decisions. But with RAMIS, we are now able to have access to real-time information, such as the amount of revenue collected from a particular sector,” she explained.

Managing resistance

According to Bard Papegaaij, a research director at Gartner, culture is driven by people’s belief systems, which often tie into underlying emotional constructs. This means that you cannot simply tell people to change their culture. “You must convince people that cultural change is necessary, then help people construct and internalise an alternative belief system that drives a new set of behaviours,” said Papegaaij.

The commissioners and leaders at IRD were well aware of that. As part of their change management programme, officers were sent abroad to visit the taxation departments of other countries to see how they work. “This made them realise that if we were to have those kinds of environments as well, we would be just as productive,” said Mrs. Herath.

egl-SLK1The workshops and training programmes conducted by the Singapore e-Government Leadership Centre were focused on how to engage not just taxpayers and other stakeholders, but also officers within the department. One important aspect was bridging the communication gap. “We applied what we have learned here at eGL, and were able to manage internal resistance from staff by convincing them that their lives will definitely be made easier with technology,” explained Mr. Jayawardhana.

Some taxpayers were also averse to the idea of digitalising the taxation process. “When I was making presentations with regards to RAMIS, people would say that they don’t have the required knowledge to use the portal. Stakeholder engagement and communication approaches learnt in the eGL programmes have helped to lower the amount of resistance,” said Mrs. Herath.

Recognising efforts of operational level staff

Lastly, Mrs. Herath also highlighted that IRD’s successful RAMIS implementation journey was not attributed to just a few people. “There were about 100 dedicated junior officers who contributed to the betterment of the department, and I think we should look into providing training for them as well. Here in Singapore, I see that even the operational level officers are given training because there is acknowledgement that they are the leaders of tomorrow.” She added that exposure to the Singapore systems will be beneficial for Sri Lanka’s smart nation project. “I believe that when the officers see how Singaporeans are working on such areas, it will help them change their mindset,” Mrs. Herath concluded.

“The leadership and commitment of IRD officers to implement fiscal reforms has been commendable. They have picked up various aspects of change management and technology adoption from the learning programmes that we have carefully customised for IRD and have effectively applied it to their context. We look forward to collaborate with IRD to embark on the next wave of digital journey by leveraging on Data Analytics and emerging technologies, such as Blockchain. We wish them continued success” said Ashok Kumar, Centre Director, Singapore e-Government Leadership Centre. 

For more information on the Singapore e-Government Leadership Centre, click here