This chapter examines how digital identities are being adopted and used within tax administrations across economies. It presents data on coverage and uptake, authentication methods, and authorisation processes put in place by tax administrations, with the data analysed on a regional basis. It also highlights the use of innovative technologies by tax administrations with respect to digital identity.
Digitalisation and Digital Transformation in Tax Administrations
Regional Trends and Insights
Abstract
As interactions between tax administrations, citizens, and businesses increasingly move online, secure and reliable identification has become vital to modern tax administration. Digital identities (DIs)1F1 provide assurance that individuals and entities are who they claim to be, enabling authenticated access to services, legally robust attribution of actions, and auditability across end-to-end digital processes. In doing so, DIs help tax administrations improve service quality, reduce administrative burden, and enhance compliance by making it easier to do the right thing and harder to do not.
Well-designed digital identity ecosystems do more than unlock online portals. They enable frictionless access to a growing suite of digital services, such as prefilled returns, real time reporting, and case status tracking, while supporting secure information matching across datasets and institutions. They also facilitate the delegation of rights and representation, an essential function for intermediaries and businesses. Increasingly, DIs serve as an enabling layer for machine-to-machine interactions, including Application Programming Interface (API) based data exchanges and automated filings, where secure credentials allow systems to transact with high assurance and clear attribution.
For tax administrations, the strategic value of DIs lies not only in their role as a security mechanism but also as a platform capability for digital transformation. By helping to simplify user journeys, reduce manual verification tasks, and foster trust in digital channels, DIs contribute to more efficient operations and improved compliance outcomes. They can also support wider government objectives, including interoperability across public services.
As adoption grows, data from tax administrations shows considerable variation in the digital identity systems across economies. Levels of uptake, integration with tax services, and the breadth of available functionalities differ, reflecting divergent policy choices, technological infrastructures, and institutional settings. These differences shape not only the experience of taxpayers and intermediaries but also the operational benefits that administrations can realise.
The use of DIs as a means of accessing secure tax administration services has become a core feature of digital service delivery in many economies. Figure 2.1. indicates that the requirement to use an approved DI to access secure digital services offered by the administration is widespread across most regions, for both individuals and businesses. In Asia and Europe, this requirement applies in nearly all economies, whereas it is less widespread in Africa and Latin America and the Caribbean. In the Pacific Islands, uptake remains limited, at 13% (reflecting one of the eight participating Pacific Islands economies that reported a DI requirement is in place).
Percentage of administrations with the respective process in place for individuals and businesses by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Across all economies covered by the Inventory of Tax Technology Initiatives (ITTI) (OECD et al., 2025[1]), an average of 86% of administrations require individuals to use an approved DI to access secure digital services (Table 2.1.), while 82% require businesses to do so (Table 2.2.).
Table 2.1. for individuals and Table 2.2. for businesses further indicate that, while tax administrations remain the primary providers of DIs, other government bodies and private sector providers also play a significant role, particularly in Central and East Europe. Where multiple providers coexist, DIs are often interoperable. On average, DIs used by individuals can be provided by another government body in 58% of economies and by private sector entities in 25%. For businesses, these figures are 46% and 25%, respectively.
In some economies, DIs provided by tax administrations are used to access services beyond tax, including services offered by other government bodies and private sector entities. In 47% of economies, individuals can use the DI issued by the tax administration to access services provided by other government bodies, while in 21% of economies it can be used to access private sector services. Similar patterns are observed for businesses, with 49% of economies allowing tax administration issued DIs to be used to access other government services and 19% allowing access to private sector services.
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Brazil – National Identity Card Project
Brazil has advanced the implementation of a National Identity Card (CIN), a new identification document available in physical and digital formats which aims to provide secure self-identification for its citizens and allows the link up of public services, including on taxation. This has centralised Brazil’s civil identification system, where previously identification cards were issued at the state level and more susceptible to fraud and other illegal activities. As of January 2024, around 3 million CINs have been issued.
The project has relied heavily on input from the Federal Revenue Office (RFB), with each card using the Individual Taxpayer Registry number as its identifying number. Once a physical CIN is issued, the holder can also obtain a digital version through the government’s online portal, which has a single login authentication for all government websites and applications, facilitating citizen access to public services. The CIN comes with a QR Code that can be read easily and quickly, which provides more security for citizens. It makes it possible to identify the authenticity of the card, and to know if it was stolen or lost. The card also allows an easier identification process for people with special needs.
China (People’s Republic of) – Digital identity supporting smart taxation
The State Taxation Administration (STA) is building a national network to provide a secure and consistent digital identity, laying a solid foundation for smart taxation. Based on legal identity and a national authoritative authentication source, the digital identity connects legal persons and natural persons handling tax related business on behalf of enterprises. This is done through confirmation by both parties, and covers all taxpayers, and supports accurate services and management of taxpayers.
Over 80% of taxpayers use an approved digital identity to access secure digital services offered by STA including comprehensive information reporting, tax declaration and payment, certificate issuance, tax refunds, tax administrative licenses and other tax issues. Taxpayers are also allowed to authorise third parties to represent businesses and access secure digital services.
With the digital identity, the scope to save costs is increased as taxpayers only need to register in one place. This can then be recognised in other places, and the digital identity can also connect identities via across devices, and applications. It also provides the ability to allow taxpayers to choose a variety of authentication and login approaches, such as Short Message Service (SMS), ID card, digital certificate, and face recognition.
With the continuous development of the national network of digital identity, it will further provide unified and authoritative identity services for all taxpayers and tax officials to facilitate smooth progress of the digital transformation of China's tax collection and administration.
Italy – Whole of government digital identity
In 2016, the Italian Revenue Agency has introduced the possibility for taxpayers to access the pre-filled income tax return using the Public Digital Identity System (SPID). In 2018, access via SPID was extended to all services provided in the “reserved area” of the Revenue Agency. From 2021, in addition to SPID, taxpayers may also use Electronic Identity Card (CIE). This means that, all citizens, including those authorized to operate on behalf of legal persons, can now access the “reserved area” through SPID and CIE credentials.
This means for example that SPID allows the registration of leasing contracts, the consultation of electronic invoices, the submission of pre-filled income tax returns, as well as the submission of documentation necessary to solve irregularities notified to taxpayers.
Sources: OECD (2022), Tax Administration 2022: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/1e797131-en, and OECD (2024), Tax Administration 2024: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/2d5fba9c-en.
In most economies, accessing tax administration services through an approved DI has become the norm for both individuals and businesses. As shown in Table 2.3. and Table 2.4., 60% of administrations indicate that between 81% and 100% of individual taxpayers use a DI to access secure digital services offered by the tax administration. Adoption rates are higher for businesses, where 80% of administrations report that usage by businesses is between 81% and 100%.
From a regional perspective, on average, economies in Central and West Asia display the highest levels of adoption, with economies in Central and East Europe and Latin America and the Caribbean also being very strong among business taxpayers. (Note that this does not comment on the Pacific Islands as only one of the participating economies from this region reported a DI requirement to access secure services.)
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
The DI solutions offered by tax administration incorporate a range of features, reflecting different policy choices, institutional arrangements, and levels of digital maturity. As shown in Table 2.5. and Table 2.6., for both individuals and businesses, most administrations rely on existing domestic identity systems rather than developing completely new solutions, and when looking at each region there does not seem to be a significant difference between individuals and businesses except for Central and East Europe. All administrations in this region rely on existing systems for individual digital identities, whereas the approach for businesses is more varied with 55% of administrations building a completely new digital identity system for businesses. On average, 76% of administrations indicate that their DI solutions for individuals are built upon an existing domestic identity framework, while the remaining administrations operate with a completely new system. For businesses this figure is slightly lower at 69%.
Cross-border interoperability remains limited across the different regions, with parts of Europe being an exception, particularly as regards individuals. Slightly over 25% of DI solutions for both individuals and businesses are designed to connect with foreign identity systems. Where DI solutions are designed to connect with foreign systems, implementation remains uneven. Connections are operational in around 54% of administrations, while interoperability in other administrations is limited to theoretical or planned arrangements. Europe and Latin America and the Caribbean are the only regions that report having in place cross‑border connections between digital identity systems.
In terms of identity creation, most administrations adopt a request-based approach with 80% requiring individuals and businesses to request the creation of a DI, while only 20% generate DIs automatically.
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Given the widespread use of DIs to access online services, it is important that robust security mechanisms are in place to mitigate the risk of DI theft.
As shown in Table 2.7., password-based authentication remains the most widely used method, applied by 84% of administrations. Methods such as the use of mobile apps or ID cards are more prevalent in Europe, Latin America and the Caribbean, and Asia, while multi‑factor authentication – the second most common approach used by 57% of administrations overall – is used by a significant share of administrations in Africa, Central and West Asia and North, South and West Europe. More advanced biometric authentication methods such as facial recognition, fingerprint scanning, or retina scans remain relatively uncommon overall.
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands. As regards voice recognition, it should be noted that it is not used as an authentication method by any tax administration within the regional groupings. However, it is observed in one administration in the ITTI dataset that is not part of any regional grouping but included in the overall average. For more information on the regional groupings, please look at the Reader’s Guide.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html(accessed on 15 June 2026).
It is also worth noting that 61% of all administrations report tailoring authentication requirements based on the level of security needed for different types of interactions, with Latin America and the Caribbean and Asia showing the highest adoption of such approaches (see Figure 2.2.).
Percent of administrations that have the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Argentina – Dual Factor Authentication
All services and digital apps available in the Argentinian tax administration (ARCA) portal have different security levels and with the use of the mobile app “Token ARCA”, ARCA has implemented a dual authentication factor process for those taxpayers carrying out sensitive transactions or who wish to enhance the security of their digital procedures with ARCA.
Taxpayers using this service need to:
Download the mobile app “Token ARCA” to their mobile phone;
Go to an ARCA office to show proof of identity and activate the token or go to an ATM to show proof of identity to activate the token; and
Login to the ARCA web site and then activate the app using the tax login code and the one-time password generated by the “Token ARCA”.
Canada – Digital identity validation
The Canada Revenue Agency’s (CRA) Digital Identity Validation (DIV) service leverages AI to validate user identities online, providing a seamless method for gaining instant full access to the CRA’s online services. It eliminates the need for a user to wait for a physical code to be sent by mail, which typically takes up to 10 business days to arrive, and allows users to self-serve and gain immediate access to online services, enhancing convenience and efficiency.
Since its launch, 60% of users have opted to use DIV over the traditional mail option. This shift has reduced the workload on call centres, decreased paper mail which can be costly, and reduced processing times, allowing staff to focus on other more complex tasks.
In the future, the focus will be on expanding use cases and enhancing the DIV solution to support additional parts of CRA services such as streamlining account recovery processes.
India – e-filing of tax returns
India has made it possible for taxpayers to meet all their compliance requirements digitally through introducing e-Verification, an online system that allows users to confirm their identity and perform tasks online. Users can verify their Income Tax Return (ITR) online, as well as other functions such as submissions, responses and requests related to ITRs. This saves taxpayers from having to physically submit their returns and having to physically go to an office to identify themselves. The identity verification process is also much quicker because it is automated.
The user can use any one of the following modes to verify their identity:
Digital Signature Certificate using Hard Token.
One-Time Password (OTP) issued by the Unique Identification Authority of India, shared via text message.
Electronic Verification Code using a verification service enabled by the taxpayer’s bank or a Bank ATM (offline method).
Since the introduction of e-Verification, compliance levels have significantly increased, from 13% in 2014-15 to 93% in 2022-23. The average processing time of ITR has reduced from 84 days in 2019- 20 to 10 days in 2023-24.
Sources: OECD (2023), Tax Administration 2023: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/900b6382-en, OECD (2024), Tax Administration 2024: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/2d5fba9c-en, and OECD (2025), Tax Administration 2025: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/cc015ce8-en.
Traditionally, many taxpayers rely on third parties such as tax advisers, accountants, or other intermediaries to manage their tax affairs. Reflecting this longstanding practice, nearly 80% of tax administrations have put in place processes that allow taxpayers to authorise third parties to access secure digital services on their behalf (Table 2.8.). While such authorisation frameworks are widespread, their adoption varies slightly across regions.
Among administrations that allow third-party authorisation, access is most commonly assigned to a named individual, with 90% of administrations reporting this capability. In contrast, the ability to assign authorisation to an entity is less widespread and reported by 66% of administrations.
Authorised third parties are permitted to represent individual taxpayers in 90% of economies, with universal coverage in some regions. Similarly, the ability for third parties to represent entities is available in 93% of economies.
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
In response to security and privacy considerations related to DI use, tax administrations are beginning to explore innovative technological approaches. As shown in Table 2.9., the overall uptake of such technologies remains limited, suggesting that experimentation is still at an early stage.
On average, just over 10% of administrations report using self-sovereign identity approaches, which are designed to give individuals greater control over their DIs. Similarly, DI wallet solutions which allow identity data and official documents to be stored and managed digitally are used by nearly 15% of administrations. The use of AI as part of DI systems remains particularly limited, reported by only around 5% of administrations. Economies from Central and West Asia lead adoption across all three technologies with respect to digital identity.
Finally, the use of blockchain-based solutions is reported by only one administration from the Latin America and the Caribbean region. No administrations in other regions report having deployed blockchain-based solutions for DI purposes.
Percentage of administrations with the respective process in place by region
Note: AFR – Africa, AS-CW – Central and West Asia, AS-ES – East and South Asia, EU-CE – Central and East Europe, EU-NSW – North, South and West Europe, LAC – Latin America and the Caribbean, PAC – Pacific Islands.
Source: OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
Additional information on the use of DI within tax administration, such as on the different domestic solutions adopted as well as the challenges related to cross-border processes, can be found in the OECD report Tax Administration 3.0 and the Digital Identification of Taxpayers: Initial Findings (OECD, 2022[2]).
References
[2] OECD (2022), Tax Administration 3.0 and the Digital Identification of Taxpayers: Initial Findings, OECD Publishing, Paris, https://doi.org/10.1787/3ab1789a-en.
[1] OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).
← 1. For the purpose of the survey underlying the Inventory of Tax Technology Initiatives (OECD et al., 2025[1]), digital identity is considered to be an electronic representation of an individual or business which enables them to be sufficiently distinguished when interacting online. The digital identity includes attributes which are bound to a credential that is used to authenticate the individual or business.