This chapter explores how tax administrations are approaching digital transformation and examines the strategies, structures, and governance mechanisms they have put in place.
Digitalisation and Digital Transformation in Tax Administrations
Regional Trends and Insights
Abstract
Embedding digital transformation within the core governance structures and processes of a tax administration is essential for ensuring that long‑term transformation objectives are balanced against immediate operational priorities. Effective digital transformation increasingly requires integration across systems, processes, and data flows that span multiple domestic and international stakeholders in both the public and private sectors. A well‑designed governance framework will help bringing these stakeholders together in a structured and transparent way. It supports tax administrations in establishing clear decision‑making processes, consistent guidelines, and well‑defined roles and responsibilities, all of which are crucial to the effective implementation and oversight of digital transformation initiatives.
Approaches to governance frameworks vary depending on each administration’s institutional context, strategic ambitions, and organisational maturity. At their core, however, effective governance models articulate clear objectives for digital transformation, define the strategic actions needed to achieve those objectives, and set out how stakeholders will collaborate.
Digital transformation represents a fundamental reshaping of an organisation’s operating model. For large and complex entities such as tax administrations, this transformation necessarily happens incrementally. To ensure that the process is coherent, sequenced, and strategically aligned, many administrations are developing dedicated digital transformation strategies that set out the main objectives, priorities, and timelines for this journey.
To help administrations identify suitable pathways and assess their current position, the FTA has developed the Digital Transformation Maturity Model (OECD, 2022[1]) which is available in multiple languages. This self‑assessment tool enables administrations to evaluate their existing level of digital maturity, understand the characteristics of more advanced stages, and identify strategic areas for improvement. It thereby provides a practical foundation for designing or refining digital transformation strategies. The model has been completed by almost 60 tax administrations. The assessment results, published in the form of an anonymised heat map (see Figure 7.1), also allow tax administrations to compare themselves with peers and to reach out, through the OECD Secretariat, for peer-to-peer discussion and learning purposes. (OECD, 2022[1])
Source: OECD (2022), Digital Transformation Maturity Model, https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-administration/digital-transformation-maturity-model.pdf (accessed on 15 June 2026).
The importance of having such a strategy is reflected in Figure 7.2, which shows that 74% of tax administrations have developed a digital transformation strategy, with particularly high adoption rates in North, South and West Europe at (90%), Latin America and the Caribbean (88%), Africa (82%), and Central and West Asia (80%). Among those with a strategy, 73% have opted for a 3-5‑year planning horizon, while the remaining administrations chose either shorter‑term or longer‑term approaches, see also Table 7.1.
Percentage of administrations with a digital transformation strategy in place and its time frame 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 20 January 2026)
Table 7.1. further demonstrates that almost all administrations (95%) actively monitor progress against their digital transformation strategies, an essential component of governance processes.
In addition, administrations recognise the value of aligning their own strategy with the government’s wider digital transformation agenda as this may help deliver integrated public services, reduce duplication, and generate efficiencies of scale. The presence of a government‑wide digital transformation strategy is high across regions, with most reporting a coverage between 80-100%. Where such government-wide strategies exist, alignment at the tax‑administration level is also consistently strong with 95% on average, reaching 100% in Central and West Asia, Central and East Europe, and the Pacific Islands.
Finally, the availability of ring-fenced funding for the duration of the strategy may also be something administrations want to consider ensuring its sustainability. On average, 58% of administrations report having secured ring-fenced funding. However, this differs significantly across regions, with more than 80% of administrations in Asia reporting that funding is ring-fenced, while in Europe this figure is around one third.
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).
Digital transformation affects every part of a tax administration as well as a broad ecosystem of taxpayers, intermediaries, service providers, and policymakers. To improve the quality of their strategies and to ensure success, many administrations involve stakeholders early in the strategic design phase.
As Table 7.2. shows, nearly all administrations (98%) with a digital transformation strategy involved relevant internal stakeholders, and a significant amount sought feedback and input from external stakeholders. Engagement with external stakeholders is also widespread, on average 89%, particularly in Central and West Asia and the Pacific Islands, where all administrations seek external input.
Furthermore, the use of data analysis and scenario modelling is less uniform, with 60% of administrations incorporating analytics to support strategic planning, reflecting varied levels of analytical maturity across regions. Administrations from Asia are typically making use of data analysis and analytics as part of drawing-up a digital transformation strategy, with rates exceeding 85%.
Administrations that have the respective process in place as a percent of those that have a digital transformation strategy
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).
Seychelles – The SRC’s digital transformation journey
In mid-2024, the Seychelles Revenue Commission (SRC) launched a 365-day transformation programme as a strategic initiative to address the gaps in the institution. The SRC began this process with a diagnostic assessment which revealed a number of obstacles – siloed internal systems, limited investment in people, a public image characterised by enforcement rather than service and untapped opportunities to innovate. This led to the Transformation Programme which was designed to guide the 12-month journey. Key pillars of the programme included:
Digitalisation for service – modernise to simplify tax processes, make them more transparent and user-friendly for staff and citizens.
Voluntary compliance over coercion – encouraging and facilitating a shift from punitive enforcement to trust-based compliance, driven by taxpayer education, segment-based service models, and data-driven risk approaches.
People and culture at the centre – investment in staff, rebuilding morale, creating pathways for leadership, and establishing a culture of accountability, learning and pride.
Performance and delivery – defining clear targets, tracking progress, and delivering measurable value for national development.
The SRC Transformation Programme was endorsed by the Cabinet of Ministers, with the support of the Minister of Finance, National Planning and Trade. This provided the programme with legitimacy, accountability and political support.
Through the 365-day programme, SRC successfully launched the following initiatives:
Launching of the Tax Management System (TMS)
Introduction of e-payments online and via a messaging app for import and export taxes.
Mandating electronic filing for monthly and annual tax returns.
Togo – Technology acquisition strategy
The digitalisation of the Togolese Revenue Authority (OTR) is guided by two key planning documents: the government roadmap, which spans four to six years, and the OTR’s overall strategic plan, which covers three to five years. Digitalising the revenue authority is a central pillar of these strategic plans. The multi-year IT plan for 2024–2027 aims to optimise and digitise processes, modernise tools and services for stakeholders, secure infrastructure, services, and data, and improve IT governance.
When evaluating ICT solutions and systems, the OTR prioritises quality, support, training, maintenance, and service security to ensure a positive customer experience. Technology acquisition is carried out in compliance with domestic law and the directives of the West African Economic and Monetary Union. The acquisition policy is implemented by the internal public procurement body, which formulates needs through terms of reference, benchmarks market solutions, advises technological and strategic partners, and manages contracting.
The technology acquisition process follows a transparent, open tendering procedure to guarantee the best quality-price ratio. Additionally, the authority ensures efficient contract management by meeting contractual requirements, providing training for acquired solutions, and implementing change management processes.
IT metrics are measured according to SMART criteria (Specific, Measurable, Attainable, Relevant, Time-bound). Mid-term and end-of-period evaluations assess the achievement of effect and impact indicators, draw lessons learned, and propose corrective measures where necessary.
Measurement tools include operational plan evaluations, performance reports, surveys (satisfaction, site visits, etc.), Compliance Risk Management audits, and orientation seminars. These are conducted by different departments including the Steering Committee, the Department of Studies and Strategic Planning, and the Internal Audit and Quality Assurance Department. These tools ensure that the revenue authority understands the level of satisfaction with adopted ICT solutions and their effectiveness in meeting set objectives. Continuous monitoring enables the tax administration to adapt to current business needs and the environment in which it serves taxpayers.
Sources: Information provided by Seychelles (2026) and Togo (2026).
A central component of an effective governance framework is the establishment of a governance body with clear authority to oversee processes, guide strategic decisions, and ensure that the actions set out in the digital transformation strategy are implemented consistently and effectively.
Table 7.3. outlines that 71% of administrations have a senior management governance body in place to oversee the digital transformation of the administration. Across regions, North, South and West Europe shows the highest adoption at 84%, followed by Africa at 82%. Among administrations that have such governance bodies, the inclusion of external stakeholders varies widely, with an average of 40% having external stakeholders holding formal positions on the governance body. Latin America and the Caribbean stands out as the region with the highest rate of external stakeholder participation (70%).
As regards the types of external stakeholders involved in governance bodies: participation is highest from other parts of government (81%), followed by private‑sector (39%) and civil‑society (26%).
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).
Beyond formal governance bodies, many administrations have embedded additional governance mechanisms to support transformation. Table 7.4. highlights that, on average:
75% of administrations have programme-management activities adopted to support the transition to a digital tax administration;
65% of administrations have introduced specific roles or positions dedicated to leading digital‑transformation work, such as chief digital officers; and
In 74% of the economies, governments have a whole of government approach to digital transformation governance.
The percentages are very similar across regions, with the exception of the Pacific Islands region.
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).
Understanding the importance of setting a digital transformation strategy and having the proper governance structures in place, the OECD published the report Tax Administration 3.0 - From Vision to Strategy (OECD, 2025[2]). This report describes the actions that Commissioners and senior leaders can take in order to develop and operationalise a digital transformation strategy. It covers organisational change and how administrations operate internally, as well as how they engage with the wider tax ecosystem. It also contains several links to presentations on actions already being taken by different administrations in order to provide inspiration for possible new initiatives.
References
[2] OECD (2025), Tax Administration 3.0 - From Vision to Strategy, OECD, Paris, http://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-administration/tax-administration-3-0-from-vision-to-strategy.pdf.
[1] OECD (2022), Digital Transformation Maturity Model, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-administration/digital-transformation-maturity-model.pdf (accessed on 12 February 2025).