On 5/4/2022, the OECD Forum on Tax Administration jointly with other partner organizations such as CIAT and the IMF^[1] launched the first phase of a new global Inventory of Tax Technology Initiatives (ITTI)^[2] which contains information on the use of leading technological tools and digitalization solutions implemented by 76 Tax Administrations (TAs) around the world.

The inventory comes at a historic moment in the field of digital transformation of the TAs, so I thought it was important to comment on its main aspects.

OBJECTIVES OF THIS INVENTORY

While international comparative data on TAs collected through surveys such as the International Survey of Tax Administration (ISORA) already existed prior to the inventory, these data frequently consider the different functions and processes of an entire tax administration and may not examine the digitalization and digital transformation of tax administrations in detail.

Therefore, the main objective is to assist TAs in their considerations of reforms as well as to help identify where future collaboration between TAs could be of greatest value.

In other words, an attempt is made to fill the information gap on the digitalization of TAs, analyzing:

• Leading technological tools and digitalization solutions, implemented by TAs, and how they have made a significant difference in the tax gap and/or compliance costs; and
• Approaches that will help advance the overall digital transformation of TAs.

Based on data from the Global Digitization Survey, the particular tools or technological approaches adopted by the TAs and links to case studies provided by the TAs are presented to provide a deeper insight into particular implementation solutions, as well as links to supporting materials and studies.

The objective is to update the survey information annually in order to always have up-to-date information and build a picture of trends over time.

All the data contained on the website have undergone a high-level review by the OECD, but neither the OECD nor any other partner organization has formally validated the data.

Therefore, all data must be considered as self-notified by the interested TAs Therefore, a “no” answer on one of the maps may mean that the TA does not have the relevant technological tool/approach, or that it did not provide an answer to this relevant part of the survey.

BASIC COMPONENTS OF DIGITALIZATION FOR TAX ADMINISTRATIONS

The inventory contains dedicated web pages for each of the basic components of digitalization for TAs as set out in the OECD report of 2020, Tax administration 3.0^[3]:

• Digital identity: digital identity is defined as “an electronic representation of a person or company that allows them to be sufficiently distinguished when interacting online”. Secure identification of taxpayers is key to the efficient operation of modern TAs, enabling the connection of administration processes (communication, filing of tax returns, incorporation of other data sources, self-service options, etc.) with individual and corporate taxpayers.
• Taxpayer contact points: they include different topics such as online services, services for users who do not have online access or disabilities, interactions using AI, measurement of the taxpayer experience, software development and APIs and interactions. Case studies of virtual assistants and APIs are presented.
• Data management: data standards and data collection, pre-filling of tax returns, data exchange between TAs, data governance and their analysis are presented.
• Management and application of tax regulations: the topic of whether tax laws or regulations are machine-readable and whether they automatically register, or de-register taxpayers based on data received from third parties is presented. How TAs use AI as part of their operations and how they do it is presented, including the main use cases of information on a number of innovative approaches taken by administrations, including the distributed ledger technology.
• Strategy, governance and new skills: the strategies of digital transformation developed, including the participation of external stakeholders and the analysis of data, the details on the governance structures in place to oversee the digital transformation, how to identify the skills required for a successful digital transformation, and if, and if so, how, this has been mapped against the skills currently available and finally how to build a digital culture among its staff.

Those web pages contain global maps presenting selected information from the survey and also have links to spreadsheets containing the raw information collected through the global survey (the spreadsheets can be downloaded for later use)

In addition, the essential web pages contain links to a series of case studies (videos, presentations, etc.) prepared by the TAs. The number of case studies will be expanded over time.

TAX INFORMATION

The inventory contains pages about:

• Personal income taxes: data on the share of these taxes in various regions, the use of third-party withholding regimes, the use of AI to assess risks of tax non-compliance, and the digital services implemented are exposed among other aspects.
• Corporate income tax data on the share of these taxes in various regions, implemented digital services and risk assessments using new ICTs are presented, among other points.
• Value added tax: data on the share of these taxes in various regions are reported, ans issues of electronic invoicing, online information, new approaches to collecting online transactions and AI for risk assessment are discussed.

Those web pages provide an overview of the main survey information (presented in the form of global maps) particularly relevant for each tax type and links to the web pages containing the raw survey information.

In addition, they contain relevant information, such as model rules and reports, developed by the organizations cooperating in the survey.

FINAL IDEAS.

I am convinced that the new inventory will help the TAs in their considerations of reforms at both the national and international level, to improve their role in helping to reduce the taxpayers’ compliance costs and the costs of administering the tax system.

It is clear that the digitalization is producing dramatic changes not only in the structures of the TAs, but also in their principal functions of collection, control, information and assistance, exchanges of information, internal and international, and of course, in the organization of the TAs’ work, such as competencies and skills required for the officials.

It is also clear that not all countries and their TAs have the same degree of digitalization, the same human and material resources, nor the same social reality to conduct their activities.

But the problems and challenges that the TAs have to face are similar, obviously with the analysis of the context of each country where they have to act.

The digital transformation of the TAs should not be faced in isolation, but within a process of each country in what is known as digital government.

For all these reasons, I consider this inventory as especially important as a best practice that can help the TAs in their digital transformation process.

The Digital Transformation Maturity Model recently published support the inventory^[4], which allows TAs to understand their current level of digital development and supports the further development of digitalization and digital transformation strategies”.

In addition to providing a snapshot of the implementation of particular tax technology tools or approaches, ITTI will be further developed in a second phase to include multiple case studies, as well as links to a wide range of supporting materials, providing a one-stop shop for TAs and other stakeholders interested in digitalization initiatives.

All the participating agencies of the inventory will continue to work together to increase their global coverage and the TAs wishing to be included in the inventory are also invited to complete the Global Survey on digitalization.^[5]

I understand that digital transformation is a new opportunity for countries, since those who bet on it will be able to develop more quickly and avoid the inequalities that can be generated if it is not included as a state policy.

Today more than ever, we must continue to progress in cooperation and multilateralism, at the international level, by increasingly involving different actors from both the public and private sectors.

[1] It has been produced with the assistance of the members of ISORA (the inter-American Center of Tax Administrations, the International Monetary Fund, the Organization of Intra-european Tax Administrations and the OECD), the Asian Development Bank, the African Tax Administration Forum (ATAF) , the Cercle de Reflexion et d’echange des Dirigeants des Administrations Fiscale (CREDAF), the Association of Tax Administrators of the Commonwealth (CATA) and the Study Group on Asia-Pacific Tax Administration and Research (SGATAR).
[2] https://www.oecd.org/tax/forum-on-tax-administration/tax-technology-tools-and-digital-solutions/
[3] To expand on this topic, see “ The digital transformation of Tax Administrations. Is a new management model emerging? ” ALFREDO COLLOSA CIAT BLOG 19/01/2021
[4]  https://www.oecd.org/tax/forum-on-tax-administration/publications-and-products/digital-transformation-maturity-model.htm
[5] https://www.oecd.org/tax/forum-on-tax-administration/tax-technology-tools-and-digital-solutions/global-survey-digitalisation-2021-english.pdf .The official version of the survey is available in english . However, there are also unofficial translations available at French , Russian and Spanish . If the TA wishes to complete the survey and has any questions, you should contact the Secretariat of the OECD Forum on Tax Administration (FTA) at fta@oecd.org.

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