- 03
- Jan.
- 2024
One Single IT Officer at the Lebanese Custom Administration
modified on 11 Apr. 2024 à 15:36 Read : 4 minute(s) A A A
A technical assistance report from the International Monetary Fund (IMF) highlighted the “dire conditions” of the Information Systems (IS) departments within the Lebanese tax and customs administrations.
As per the IMF report, there is a real and pressing concern about the imminent collapse of Lebanon's tax and customs administrations. The staffing situation in the VAT department, revenue department and Lebanese customs administration is deemed "critically low." Currently, there is only one remaining permanent staff member in the Information Systems (IS) department within the Lebanese Customs Administration (ADL), and no personnel in the tax departments.
The Ministry of Finance's computer center or IT, a department that provides support to tax departments, has lost nearly half of its staff. Without the support of qualified IT professionals, the loss of information systems or data from tax agencies is likely to lead to the halt of operations, causing additional economic and fiscal damages, as stated in the IMF's technical assistance report.
Recommendations
The IMF is urging authorities to take action to safeguard the continuity of critical functions, using emergency powers if needed.
In this context, it recommended the implementation of a project aimed at holding on to the existing experienced personnel and hiring a limited number of key specialists at competitive market salaries.
This would involve, for instance, not only IT staff and data analysts, but also risk analysts and experts specializing in major taxpayers, including auditors. Additionally, it has been recommended to acquire essential resources for critical functions, such as crucial computer hardware and software.
Outdated Models
The IMF highlighted that tax administrations in Lebanon continue to operate with outdated and inefficient organizational models, using obsolete digital tools, and exhibiting inadequate application of existing tools in the customs department.
The authorities are urged to explore expediting the implementation of a semi-autonomous tax administration, providing increased flexibility to enhance staff salaries. Additionally, there is a need to carefully assess the utilization of customs service fees to support the modernization of both tax and customs systems.
As such, immediate intervention is crucial to stabilize VAT and computer operations, ensuring the uninterrupted continuity of fundamental revenue department functions.
This intervention should begin by ensuring the presence of qualified IT personnel to manage the essential system operations, including the backup of critical databases. Among these employees, skilled specialists are needed to mostly oversee the SIGTAS platforms, as well as the collection of custom-developed computer systems on which it relies (for example, the Ministry of Finance's collection gateway).
The necessary investments to ensure the reliable operation of key IT services, including electronic filing services for large taxpayers, are crucial. Persistent failures could have a direct negative impact on revenues.
Difficult Recruitment
The recruitment recommendations put forth by the IMF are difficult to take into consideration in a complex situation in which the functioning of the Public Service Authority is compromised, and the public sector’s prevailing salaries do not fully reflect the value of the work and the required skills.
With the increase in Sayrafa’s exchange rate (Lebanon Central Bank’s platform) to LBP 89,500 per dollar, the value of public sector salaries, which is originally low, depreciated within a range of 5% to 15%. This is without considering hyperinflation, which skyrocketed to a three-digit figure in 2023, reaching approximately 260%. Escalating costs and the devaluation of the national currency triggered hyperinflation.
Following the pound's collapse, public sector salaries lost over 95% of their value. The government repeatedly voted for increases in compensation, in the form of temporary social allowances. However, all these raises did not compensate for more than 15% of the value of pre-crisis salaries.
As per the IMF report, there is a real and pressing concern about the imminent collapse of Lebanon's tax and customs administrations. The staffing situation in the VAT department, revenue department and Lebanese customs administration is deemed "critically low." Currently, there is only one remaining permanent staff member in the Information Systems (IS) department within the Lebanese Customs Administration (ADL), and no personnel in the tax departments.
The Ministry of Finance's computer center or IT, a department that provides support to tax departments, has lost nearly half of its staff. Without the support of qualified IT professionals, the loss of information systems or data from tax agencies is likely to lead to the halt of operations, causing additional economic and fiscal damages, as stated in the IMF's technical assistance report.
Recommendations
The IMF is urging authorities to take action to safeguard the continuity of critical functions, using emergency powers if needed.
In this context, it recommended the implementation of a project aimed at holding on to the existing experienced personnel and hiring a limited number of key specialists at competitive market salaries.
This would involve, for instance, not only IT staff and data analysts, but also risk analysts and experts specializing in major taxpayers, including auditors. Additionally, it has been recommended to acquire essential resources for critical functions, such as crucial computer hardware and software.
Outdated Models
The IMF highlighted that tax administrations in Lebanon continue to operate with outdated and inefficient organizational models, using obsolete digital tools, and exhibiting inadequate application of existing tools in the customs department.
The authorities are urged to explore expediting the implementation of a semi-autonomous tax administration, providing increased flexibility to enhance staff salaries. Additionally, there is a need to carefully assess the utilization of customs service fees to support the modernization of both tax and customs systems.
As such, immediate intervention is crucial to stabilize VAT and computer operations, ensuring the uninterrupted continuity of fundamental revenue department functions.
This intervention should begin by ensuring the presence of qualified IT personnel to manage the essential system operations, including the backup of critical databases. Among these employees, skilled specialists are needed to mostly oversee the SIGTAS platforms, as well as the collection of custom-developed computer systems on which it relies (for example, the Ministry of Finance's collection gateway).
The necessary investments to ensure the reliable operation of key IT services, including electronic filing services for large taxpayers, are crucial. Persistent failures could have a direct negative impact on revenues.
Difficult Recruitment
The recruitment recommendations put forth by the IMF are difficult to take into consideration in a complex situation in which the functioning of the Public Service Authority is compromised, and the public sector’s prevailing salaries do not fully reflect the value of the work and the required skills.
With the increase in Sayrafa’s exchange rate (Lebanon Central Bank’s platform) to LBP 89,500 per dollar, the value of public sector salaries, which is originally low, depreciated within a range of 5% to 15%. This is without considering hyperinflation, which skyrocketed to a three-digit figure in 2023, reaching approximately 260%. Escalating costs and the devaluation of the national currency triggered hyperinflation.
Following the pound's collapse, public sector salaries lost over 95% of their value. The government repeatedly voted for increases in compensation, in the form of temporary social allowances. However, all these raises did not compensate for more than 15% of the value of pre-crisis salaries.
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