Edward Larbi-Siaw describes in detail the process of tax administration reform in Ghana during the late 1980s. First, the reform program sought to recruit highly skilled and diversified personnel that could raise to the challenges posed by the new taxation environment. Larbi-Siaw describes alternative strategies to incentivize employment with the National Revenue Secretariat (NRS), including salaries matching those offered by the private sector and hierarchy adjustments aimed at providing in-demand scientists with ranks equal to those they would have at universities. This was possible only after the NRS was removed from the civil service to circumvent pay restrictions and rigid promotion systems. Second, the secretariat was transformed into an agency through an institutional overhaul that involved the creation of departments specialized in research, internal operations, auditing, finance and human resources. Third, enhanced supervision and monitoring of revenue flow contributed to an increase in effectiveness and a reduction in corruption and malfeasance. This was complemented by selective purges of corrupt or underperforming officials, with the notable exception of the operations core that remained largely untouched due to the strategic need to maintain the NRS running throughout the restructuring process and to minimize resistance. Larbi-Siaw attributes the lack of generalized resistance to the reform to the support of the government, a consensus-building approach predicated on internal deliberation and consultation with other relevant agencies, and the successes of creative outreach efforts of the newly created NRS customer service and public relations departments. Nonetheless, there were two main sources of resistance. First, civil servants resented the retention of revenue to sustain high salaries at the NRS, which resulted in the abolition of retention and the drain of many qualified staff. Second, public discontent over misused funds affected the NRS due to the inevitable link between revenue collection and expenditure. Information provision was key to transparency, and required extensive cooperation with the Ministry of Finance that could not always be secured due to intrinsic institutional conflict over jurisdictions. Both factors also contributed to the considerable delay in integration of the revenue agencies—the Internal Revenue Service and the Customs, Excise and Preventive Services—despite a stated preference for a one-stop shop. Finally, Larbi Siaw describes specific tax regulations that were introduced, highlighting the role of codification in the management of special interest groups that had previously been able to secure ad hoc exemptions.
Case Study: Professionalization, Decentralization, and a One-Stop Shop: Tax Collection Reform in Ghana, 1986-2008
At the time of this interview, Edward Larbi-Siaw was the tax policy adviser in the Ministry of Finance of Ghana. Trained as an economist, he initially worked at Ghana's central bank. He left that post to study law and management accounting. Upon returning to Ghana, he joined the National Supply Commission. As he specialized in economics taxation, he transferred to the National Revenue Secretariat (NRS) as chief director. While at the NRS, he was involved in important reforms in tax administration and the structure of taxation.