Strategic Planning in Public Organization: The Case of a Tax Administration in a Developing Country

Strategic planning is the most important and fundamental step in moving organizations to become more performance-oriented. An effective strategic planning system requires the strategic planning process to be linked with other management processes in an organization. This study investigates the strategic planning process to see how it is linked to other critical decision-making processes in a tax administration. Such study, specifically for tax administrations in developing countries is lacking in the literature. Data for this study was collected through interviews with tax officials of the Royal Malaysian Customs (RMC) which administers the indirect taxes. On the overall, the results reveal that the practices of the strategic planning system at RMC are similar to those of the international revenue bodies. However, some elements in the strategic planning process are inconsistent with the international practices and needed improvements. These are the areas related to stakeholders’ involvement in the strategic planning process, evaluation process of the strategic plan, resources issues, and performance measurement activities. Reflecting on the problems faced by RMC in achieving its strategic goals and objectives, the main issues are related to the lack of resources and lack of commitment from the tax employees.