IMPROVING EFFICIENCY OF MADAGASCAR’S ADMINISTRATIVE TAX PROCESS

Country: Madagascar

Locations within Country: Antananarivo

Services: Business Process Mapping, Business Process Reengineering, Training, Tax Automation

Context of the Assignment:

The Government of Madagascar wanted to improve the efficiency and transparency of interactions between companies and the tax administration, such as the registration for new taxpayers, the procedures declaration and payment of the main taxes, tax audit, and procedures related to the refund of tax. To do this, the Government needed vendor support to identify, map, and simplify the administration of tax in Madagascar.

Apex Consulting was selected to propose concrete measures to improve the speed, efficiency, and transparency of tax procedures using international best practices. Our consulting team performed a diagnostic analysis to evaluate the current situation (as-is). We identified regulatory and institutional entities involved in all administrative procedures related to taxes in Madagascar and depicted a detailed map of the current tax processes affecting companies of all sizes. We then observed administrative procedures in practice, including procedures for withholding taxes, credit repayment, registration and issuance of taxpayer numbers, and procedures relating to tax audits. We looked specifically for indications of bottlenecks in the process or duplicates in procedures.

Our team then developed a future (to-be) situation – a depiction of procedures in a simplified form. We recommended measures to address the main constraints in the tax process, improve the transparency of tax procedures, and improve communication between the tax administration and taxpayers. At the conclusion of our analysis, we presented the as-is and to-be process diagrams to the Government of Madagascar, along with the recommendations for simplified procedures, including risks and costs of implementation.

As a result of our work, the Government of Madagascar was able to reduce administrative burdens and compliance costs for taxpayers. We saved 45% in total processing time and 76% in total processing steps. This is paving the way for an improved business climate, strengthened economic governance, and increased investor and private sector confidence for Madagascar.