Media
Publication: ComputerWorld Malay
Cover
Story: Busting Corruption
By
Jonathan Hopfner
IT
is helping Asian governments win the war on corruption, but it will prove
only as effective as the hands that wield it
It
is one of the rare issues uniting politicians, the private sector and
organizations with a cause. All are unanimous in their agreement that
corruption exacerbates poverty, stifles investment and prevents many
economies from reaching their potential, and that unfortunately it is a
problem rooted more deeply in Asia than other parts of the world. Despite
the graft-busting efforts of their governments, nations such as the
Philippines, Indonesia and Vietnam continue to appear in the lower tiers of
Transparency International’s corruption perceptions index. Cleaning up the
continent seems destined to remain an uphill trek.
Thankfully,
officials and experts also seem to be reaching a consensus on possible means
to address the corruption quandary. And IT seems destined to prove one of
the key tactical tools in this battle. Recent years have seen a surge in the
deployment of solutions aimed specifically at improving transparency and
governance, mainly in the public sector. Donors such as the United States
Agency for International Development (USAID) have made technology a central
pillar of their corruption-fighting programs.
A beacon of hope
IT attacks fraud “by shining a bright light upon institutional
processes,” providing a clear view of transactions, improving public
access to information, and promoting accountability through the
strengthening of the links among geographically disparate systems, USAID
noted in a recent report. The Asian Development Bank (ADB) agrees,
commenting in another study that a region-wide e-government rollout could
take a bite out of the black market by “improving the enforcement of
rules, lessening the discretion of officials, and increasing
transparency.”
There
are certainly a number of success stories that seem to endorse these
beliefs. Authorities in the South Korean capital Seoul have tackled
procurement and permit-related vice through the implementation of an online
service that allows citizens and companies to monitor the status of
applications or appeals in real time. Hong Kong’s powerful Independent
Commission Against Corruption has taken its fight to the streets and
boardrooms by introducing a web-based advisory service for companies wanting
to draw up anti-corruption policies or seminars. In the Philippines, a
US-backed “Transparent Accountable Governance” project created an
extensive web portal that unites corruption-fighting data with surveys and
case updates, and is widely credited
with raising public awareness of politicians’ activities.
But tougher tests of the potential contributions of technology in stamping
out suspect practices are emerging through the region’s revenue
departments. Asia was the only region in a recent Transparency International
survey where taxation was cited among the most graft-ridden sectors, with
the public registering a “significant level of concern” about the
integrity of tax authorities. The threat of tax-related fraud comes from
both officials and taxpayers seeking to reduce their obligation and is
particularly acute as it reduces the flow of revenue to state coffers,
hampering the government’s ability to fund future transparency
initiatives. Thailand’s National Counter Corruption Commission estimates
corruption shaves US$25 million (RM92 million) from the state budget each
year, while according to the United Nations Development Program in the
Philippines the figure is US$1.8billion (RM6.6 billion).
Taxing issues
In Indonesia, where a 2004 audit of government agencies unearthed fraudulent
transactions worth over US$18 billion (RM66 billion), tax authorities are
breaking out the big guns. The country’s Tax Directorate has embarked on a
modernization drive that has impacted every corner of the organization,
linking distant offices, automating procedures and moving interaction with
taxpayers online. The shift has required massive infrastructure investments,
including a new data centre, storage area networks and disaster recovery
facilities. But officials at the directorate believe they have no
alternative.
“We have more than 300 district offices and contribute more than 73
percent of the state budget,” says Rafianto Moesharsono (left), head of
support and database division, Tax Directorate of Indonesia. “The only
solution to our problems is complete integration and the unification of
information on taxpayers through the development of the IT system.”
One of the most important elements of the new administration system is
workflow technology, which Rafianto says enables the department to better
track the activities of its officers and enables the automatic generation
and storage of penalty and incident reports. The end goal of the process is
to eliminate opportunities for fraud and to build the amount of data
available to taxpayers.
Already implemented in major centres like Jakarta and Batam, the workflow
techniques will be rolled out to district tax offices nationwide by 2008,
Rafianto says.
“Our compliance is very low compared to Singapore and Malaysia, and
we’re struggling to raise taxpayers,” he explains. “We’re creating a
net that can catch fish. Eventually it’ll be the system controlling people
and not people controlling themselves – people tend to be subjective.”
The power of mobility
Since 2003 Rafianto has focused on a mobility strategy designed to cement
ties between the directorate’s central office in Jakarta and employees
throughout the archipelago. It is equipping tax officers in remote locations
with PDAs and recently purchased a data centre application acceleration
solution from vendor Juniper Networks that bolsters the speed and security
with which information on taxpayers is retrieved from the field.
Consistent
communication and reporting between auditors and the head office makes it
more difficult for taxpayers to “approach” officers with illicit
officers and removes opportunities for misconduct, Rafianto says. In
addition, mobility has smoothed the audit process considerably and created a
single window of information for the directorate’s field workers.
“Auditors have to access the activity of a company throughout Indonesia,
and before we had this system, they had to order hard copies of forms from
perhaps 30 different district offices, which could take weeks or months,”
Rafianto explains. “Now this data can be obtained easily and almost
instantly.”
The implementation of cutting-edge solutions has also forced the directorate
to confront new challenges, including technophobic attitudes among some
older workers, creaking telecom infrastructure, and security and access
concerns.
“We have problems with authority and access management,” Rafianto
admits. “Tax data is very sensitive in Indonesia, and if information about
one important person goes public, who knows what could happen. That’s why
security is our foremost concern. With the ease of access to information
come risks.”
But he says the directorate has clearly seen collection rise since it
launched its modernization program, and that technology will remain central
to the agency’s struggle.
“There are issues that we’re trying to solve,” he says. “The less
that taxpayers meet tax officers, the better, as then there’s no friction
and no self-interest … that’s the goal. The other point is to treat
taxpayers fairly, there aren’t multiple standards anymore but a system,
not people, that will decide how much tax you have to pay.”
What technology can and can’t do
Throwing IT at the fraud and loss problem seems to have worked at
Thailand’s Revenue Department, which has exceeded its targets in recent
years thanks partially to rapid uptake of an online tax filing system, and
the Bureau of Inland Revenue of the Philippines, which has reversed the
plunging collection figures seen in the late 1990s through an overhaul of
its data warehouse administration and analytics functions.
“With IT the situation in the Philippines is improving,” says Richard
Mills, a Manila-based outsourcing expert and director of recruitment
consultancy Chalre Associates. “It certainly makes a tremendous difference
in areas like procurement, where there’s now an information trail and the
government is forced to put the terms of contracts down for all to see.”
Technology “has become a trendy thing for officials throughout the
region,” Mills adds. “It pushes the (good governance) process forward
and when agencies
resist IT enablement people are beginning to ask why.”
But for all the indications IT could be transparency’s best friend, new
software and servers alone can’t clean out the dark corners of an
enterprise or government.
In fact, according to an ADB report, technology can sometimes facilitate bad
behavior. While the “computerisation” of an organization can convince
some staff members to cease questionable behavior, it can create “new
sources of corrupt income” for IT professionals clued-in enough to
manipulate the new systems.
“In a sense, [IT] permits an intergenerational shift in corruption and
rent seeking,” the report says. More important than any technological
investment is broader and deeper reform that opens new lines of dialogue
between citizens, businesses, and government
officials, promotes clear rules and procedures across the board, and
addresses the persistent poverty endemic to some countries in the region,
the ADB says.
Mills supports this view, noting any final victory against corruption will
be won on the cultural as opposed to the technological front.
“Unless other things come along with an IT implementation there won’t be
long-term results,” he says. “There needs to be a fear factor, a
realization that if someone is caught [for corruption] they’ll be
punished. In emerging countries the perception is still that people can be
caught but the charges never seem to stick … the real action needs to come
from the legal and enforcement side.”
— Jonathan Hopfner is a contributing writer for Computerworld
Singapore/Malaysia.
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