FOR NATIONAL TAX AGENCY

Client

National Tax Agency

Products & Services

• Business Transformation
• Corporate Restructuring
• Strategic Business Planning
• Corporatization

“The objective of the study was to transform the National Tax Agency to a self-financed organization with sustainable business model.”
Description of Project

Client

The client is a statutory body established pursuant to a national Act as the lead agency for tax administration in one of the ASEAN countries. 

Background

As a statutory body established under a national Act, the client had to abide to the agency agreement with the federal government especially on its financial governance and administration of human resources. However, there are several operational issues encountered by the client when carrying out its statutorily mandated role which is to administer the collection of direct taxes in the country especially on the aspects of funding, staffing and governance.

Challenges & Expectations

In an effort to further increase tax revenue, the client plans to improve its efficiency and to be more responsive to changes in the tax environment. Towards achieving this objective, the management had explored the option of turning into an independent self-financing agency.

Our Role on the Project

Scope of Services

The primary scope of the team is to develop a privatization strategy that will transform the organization into a self-financing agency. This also includes benchmarking of successful model adopted by other countries and develop a detailed financial model that simulate the financial profile of the organization.

Solutions / Outcomes Delivered

Leveraging on the internal data and international benchmark, the team had explored several possible revenue models that would allow the agency to generate own income, make investment & generate additional revenue for the government.

Due to the large portfolio of real estate under the purview of the agency, the team had proposed the establishment of a Real Estate Investment Trust to unlock the property value and to expand the source of revenue. 

To further fortify the ideas, a detailed thirty years financial model were built to quantify the economic benefits from each of the options available, at different charging mechanism on the agency fee.