The new requirements

In the first part of this series we opened the reflection around the new demands for human capital within the tax administrations (TAs), without evading the fact that this element forms a part of the complex network of components in practically any tax administration. Let’s investigate now a little more about those requirements for human talent.

I prefer to refer to these requirements as competencies, as a way to give them a corpus of their own and specific limits on what is and is not a requirement. Listening to several tax administrators on the characteristics of the auditor’s profile (as a key position, among many), I have often witnessed two trends, I do not know if natural but clear:

The first one considers that young university students are now equipped with new resources to face the work, and I agree with it; now university students have a more interactive perception of reality and social processes, they are better connected with their environment and the globalized environment, and have developed a great analytical and critical ability to solve problems.

However, at the same time, we face a segment of population between the ages of 20 and 26, of people who have completed the university and can also show little solidarity, little willing to work in a team and even less, those that the old generations call “Flintstones“, which is consistent with frequent decisions to complete a postgraduate degree. In certain markets the salary difference between a graduate (Bachelor degree) and a postgraduate degree laureate can even reach 65%, and in other contexts the postgraduate course is an auxiliary for the differentiation of professional qualifications among professionals in the same sector. So their incorporation into the TAs may even take another couple of years.

However, the second trend is equally interesting. It is a perspective that surge from a radically opposed point, which says that university graduates often do not have what it takes for an efficient performance in a tax administration, and forgive me the dialectic stance, but I also agree with this.

And I allow myself to offer two arguments as evidence.

First.– In verifying a matter of interest in tax administrations such as Tax Audit, (which is not the only one), it is possible to identify within the curricula their existence as a subject within the programs of careers such as Public accounting, Administration, in some cases economy, even in some Engineering, but to address the topic of tax audit, the subject was typically created as a tax specialty within the same program, or in a special diploma or postgraduate course[1] that all students of the compulsory program do not access for various reasons. Here the statement is not that the education that the university students receive is deficient, but that it does not necessarily respond to the demands of the TAs, which are not even revealed. And I can attest that our tax administrations knock the doors of universities, and although there are favorable answers, the results are still marginal.

Second. This position is the one that has favored the creation of the Career Systems and a feature of the career systems is an initial evaluation for the entry (and in many cases the university students come from all the professions that you can imagine, physicists, medical biologists, educators, historians and others), and the initial training that TAs provide in their own schools or training programs. (Let us not omit to say that the most developed tax administrations have civil service systems). This is an evidence that tax competencies can be developed in people and are not exclusive of some professions.

And while the career systems are an absolutely desirable model, I think they should be reviewed (that will be the subject of another blog).

The necessary Competencies.

It is possible to say that the repertoire of competences of an auditor should consider a wide range of knowledge, skills and attitudes; But, to understand them as competencies we must understand them in harmonic interaction with each other, the high knowledge without attitude can be dispersed, a great capacity without knowledge is superficial and an ability without attitude is not productive.

So let’s consider that our Auditor has at least two large areas of Competence: Technical and Behavioral.

Technical skills include knowledge on the legal framework of national taxation, methods and techniques of auditing in general and of control in particular, domain of the internal taxation system, process management; and if we detail more we will find knowledge related to the national social security system and also the foreign trade and customs. Without undermining the use of computer tools (GRPs, own systems, external applications to AT´s, the use of open data and big data,-do you remember when we started using office or perforated cards?) -). And we can find many other technical specifications, such as financial mathematics, international taxation and more.

On the other hand, the behavioral or soft skills incorporate at least the adherence to norms and ethics, the teamwork, the work oriented to results and in cases of responsibility position: the strategic thinking, the negotiation and group management skills, among other possibilities.

But competencies are not a matter of opinion, they must be built and documented from the real world of work.

In addition, the global trends in organizational development have raised various models of skills for labor, going from 10 to 25 (or more), incorporating attributes such as creativity, critical thinking, conflict resolution, cognitive flexibility, focus on users, decision-making, numerical thinking, emotional intelligence; adaptability initiative and leadership; and a high tolerance for frustration.

It seems that this profile is a mixture between Bill Gates and Stephen Hawkins, a mix between vision and execution, running the risk of resulting in a mixture between a monster and a sorcerer; the truth is that to have a clear answer to the issue of the requirements we must resort to the source: the work of a TA.

And very closely we must gather the information that will allow building this new profile (or profiles) that today’s TAs require. We are not referring now to the description of the position, we refer to the profile, as the ideal to face the responsibilities of the tax service. Not to mention other optics such as gender equity, diversity and inclusion.

All these elements pursue our main goal, to provide TAs with competent professionals, not only knowledgeable, but also good “doers”. Beyond common sense we have to start creating those attributes of profile, test them, adjust them and turn them into a reference for the region. That’s what we’ll talk about in the third part.

[1] According to Webometrics.info there are more than 3660 universities in Latin America, a more detailed review should be made.

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