Days 2 and half of 3

There are a significant number of factors that could be taken into account when promoting the use of electronic services. The efficiency of processes is a good starting point. The simple computation of the extra time required to key-in a million tax returns into a system versus the time required to just upload them through some kind of electronic filing system is enormous. But, timesaving is not a benefit exclusive for the Tax Administration; there are also benefits for taxpayers who have a system that will make correct computations, apply the right rates, and consider the right brackets. Instead of going to an agency or the post office to file that return, taxpayers could just send it over the Internet with the small pressure of a finger over the enter key. This might look like small savings, maybe just a couple of hours or even less for some simpler returns. But once you multiply them by the total number of filers and the average wage, you can see that for society investing in technology just make sense. But there is more to it than that. For example, using computer-managed workflows with tracking capabilities, that could detect undesirable delays at individual steps, will not only avoid that a case to be forgotten for days or weeks, but could also help to detect and solve structural bottlenecks. Furthermore, access to performance measures of individual cases and their comparison with mean measures of similar cases increase transparency as a whole.

I think that better services, that are well designed and easy to use, will also help to achieve a greater goal: voluntary compliance. Let me elaborate a little. There are some individuals that will try to cheat no matter what, regardless of the probability of being caught, regardless of the consequences they would face if caught and regardless of the social stigma they could put themselves into as long as the amount saved is big enough: a strictly cost benefit analysis. But, in my opinion, the majority of persons are not like that. The number of individuals that could take a nice company pencil home and give it to one of their kids is much higher than those that would take a dollar out of the petty cash box, even though the company pencil could cost more. Most people will happily accept a courtesy in a restaurant thoughtlessly and will probably value the whole experience of eating in that place a little better because of that. But most people will return the money back if after paying they realize that a mistake has been made and they were getting more money back than they should. When you think about that you might conclude that the extra money you are getting back is equivalent to the money the place invests in the small courtesy. However, the same people that happily accepted the small piece of food will likely return the money back. In fact, even the few that would silently take the money will not have the same feeling about the restaurant and the majority of people would probably value the restaurant a little lower because of the implied disorder.

Tax Administrations could benefit from all this with applications that are intuitive and easy use instead of complex and scary; applications that will make you think more like you are getting cash from the box than taking the pencil home; applications that are not only personalized but also permanent personal reminders that systems and benefits are supposed to be used and not abused. In summary, a kind a virtual small angel whispering at your earing telling you that it is good to be good.

Precisely, that is what we will get a sense of, those types of applications and solutions, in the second part of our General Assembly in Rio, that would cover the mornings of days two and three. Spain will start with a presentation of their comprehensive IT services for taxpayers. Brazil will present their current solutions for electronic filing of tax returns. Uruguay will share their use of IT for a personalized VAT benefits. Guatemala will present its solution to treat diplomatic tax exceptions. Portugal and South Africa will tell us about the use of different platforms and channels. And finally, Norway will brief us about their strategy to use electronic services to support all fiscal matters.

Of course, those individuals are still there. And to confront them, other things have to be put in place. That would be the subject of the rest of our Assembly, and of my next post.

Good luck