As reported in the OECD publication Tax Administration 2024 (OECD, 2024[1]), salary costs of tax administrations average more than 70% of the operating budgets, meaning that the staff and their skills are at the centre of any digital transformation process. Over the past years, the staff usage by function has remained stable with the “Audit, investigation and other verification” function and the “Registration, services, returns and payment processing” function each employing on average 30% of staff, followed by the “Debt collection” function with on average around 10% of staff (see Figure 6.1.).
Tax Administration Digitalisation and Digital Transformation Initiatives
Source: OECD (2024), Tax Administration 2024: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/2d5fba9c-en.
However, even though those figures have remained stable for some time, there have already been significant changes with administrations investing in new skills to support e-administration, provide new services and build-up data and analytical capabilities.
This shift towards new skills will expand even further and probably also accelerate with digital transformation. As digital platforms and technology, such as artificial intelligence, become more prevalent in the work of tax administrations, existing staff will need to develop technical expertise in a range of areas, from data analytics to cyber security, and/or new staff with those skills will need to be hired. As mentioned in the 2020 Tax Administration 3.0 report “The skills required will be more focussed on supporting the operation and evolution of the tax administration system as a whole. This will require an expansion in the number of IT professionals, programmers, data scientists, behavioural scientists and strategists.” (OECD, 2020[2])
It is against this background that this chapter takes a closer look at tax administrations’ approaches towards skill identification and mapping. It also provides information on tax administrations’ approaches towards building a digital culture internally and externally.
For a successful digital transformation, tax administrations may wish to consider identifying and mapping both the future skills that will be required, and the current capabilities of staff within the administration.
Table 6.1. shows there is mixed progress on this. Slightly more than a quarter of administrations have identified the future skills required for a successful digital transformation for the whole administration, and an additional 45% have done this for parts of the administration. Of those, only slightly more than half (59%) also map the skills of their current staff against the skills that are required. Interestingly, of those that perform the mapping exercise, there is very strong support for ensuring the mapping outcomes are reviewed on a regular basis and also reflected in the wider HR strategy. This may suggest that for those who carry out the mapping, it is a very useful exercise.
Percent of administrations that have the respective process in place
Source: (OECD et al., 2024[3]), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 7 February 2025).
Skill identification and mapping can be complex processes, which is why roughly a quarter of administrations that have identified the future skills needed for a successful digital transformation (for the whole administrations or for parts of it) indicated using an external supplier, such as a consultancy firm, for both exercises (see Table 6.2.).
The drive for digital transformation is not unique to tax administrations, but something that other government organisations and external partners also grapple with. Therefore, it can make sense to collaborate on common issues, as demonstrated in Table 6.2. Of those administrations that have identified the future skills needed, three quarters collaborate with other government organisations and external partners to improve the staff skills required for digital transformation, and slightly more than 40% collaborate with those bodies on a potential recruitment pool for digital transformation.
Percent of administrations that have the respective process in place
Note: Percentages relate to administrations that have identified the future skills needed for a successful digital transformation either for the whole administrations or for parts of it (see Table 6.1.).
Source: (OECD et al., 2024[3]), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 7 February 2025).
To assist administrations with understanding their maturity regarding human resources (HR) management, the OECD’s Forum on Tax Administration developed a Human Resources Maturity Model, which highlights elements that are important for implementing and maintaining good HR practices, including strategy setting and governance processes, workforce planning and management, and staff support. (OECD, 2025[4])
Transforming the organisational culture of the tax administration is a core element of success for digital transformation. This includes communicating the high-level vision of digital transformation and the benefits it can bring to the administration, the taxpayers, and the wider society.
Understanding that building a digital culture is a process that might require breaking old habits and implementing new methods, taking a strategic approach might be beneficial. Around two thirds of administrations report having developed a strategy to build a digital culture within their organisation. Moreover, close to half of the administrations have done the same with respect to their taxpayer community, and 40% with respect to their advisor community. (See Table 6.3.)
As mentioned, communication is important for success, particularly to maintain buy-in, which is why:
Two thirds of administrations ensure their digital transformation strategy is communicated to all staff so that they understand their roles and responsibilities; and
Three quarters of administrations regularly update staff and other key stakeholders on the implementation and progress of the digital transformation strategy. (See Table 6.3.)
Percent of administrations that have the respective process in place
Source: (OECD et al., 2024[3]), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 7 February 2025).
More information on the importance of transforming the organisational culture and adopting an innovative and taxpayer-centric mindset throughout the organisation, including recommended actions and case studies, can be found in the report Tax Administration 3.0 - From Vision to Strategy (OECD, 2025[5]).
References
[4] OECD (2025), Human Resources Maturity Model, OECD, Paris, http://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-administration/human-resources-maturity-model.pdf (accessed on 27 May 2025).
[5] 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 (2024), Tax Administration 2024: Comparative Information on OECD and other Advanced and Emerging Economies, OECD Publishing, Paris, https://doi.org/10.1787/2d5fba9c-en.
[2] OECD (2020), Tax Administration 3.0: The Digital Transformation of Tax Administration, OECD Publishing, Paris, https://doi.org/10.1787/ca274cc5-en.
[3] OECD et al. (2024), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 7 February 2025).