Tax Administration Digitalisation and Digital Transformation Initiatives

3. Taxpayer touchpoints

Taxpayer touchpoints facilitate the engagement between taxpayers and the tax administration. They are necessary to effectively and efficiently run a tax system and to address friction where it arises. On their journey to implement the vision of Tax Administration 3.0 (OECD, 2020[1]), tax administrations will strive to eliminate as much friction as possible to build a seamless tax system. However, where friction cannot be eliminated, taxpayer touchpoints will continue to play an important role. As part of this, tax administrations will look to provide real-time services, including automated responses to taxpayer enquiries, and they will try to identify opportunities to move touchpoints into taxpayers’ natural systems.

This chapter comments on some of the developments as regards taxpayer touchpoints. Amongst other things, it looks at the online services offered by tax administrations and how they use technology during taxpayer interactions, including artificial intelligence. It also examines the progress made as to embedding touchpoints into the natural systems used by taxpayers, for example, through the use of application programming interfaces.

Online services

The past years have seen an increasing demand for digital service channels and an emphasis on more personalised services. Tax administrations have responded to this by expanding the range of digital services on offer. This is beneficial to the taxpayer because it promotes more self-service, enables a more 24/7 style of service, and reduces waiting times for assistance. From a tax administration point of view, it can increase the automation of services, which reduces administrative costs and increases efficiency.

Services offering

A central component of supporting taxpayer compliance is the supply of a wide range of effective and user-friendly services for taxpayers. Table 3.1. provides an overview of selected online services offered by tax administrations for the three main tax types. It shows that the vast majority of tax administrations offer online many of the interactions between them and taxpayers.

As can be seen in Table 3.1., services such as registering for tax, filing tax returns, making tax payments, filing tax related objections, dealing with correspondence, and uploading data, are now offered online by around 90% or more of the administrations. In addition, approximately three quarters of administrations offer the ability to ask for tax payment arrangements and to make confidential enquiries.

Out of the selected services shown in Table 3.1., only the requesting of extensions of filing or payment deadlines is lagging behind the other service offerings, with around 60% of tax administrations allowing taxpayers to ask for such extensions online.

Table 3.1. Online services offered by tax administrations by tax type, 2024

Percent of administrations that have the respective process in place

Interaction type	Personal income tax	Corporate income tax	Value added tax
Registering for tax	88.5	87.0	92.0
Filing tax returns	100.0	98.1	100.0
Making tax payments	90.4	92.6	92.0
Requesting extensions of deadlines (filing and payment)	65.4	61.1	60.0
Asking for tax payment arrangements	75.0	72.2	76.0
Asking confidential enquiries in a secure environment	75.0	74.1	74.0
Filing tax related objections	88.5	77.8	84.0
Dealing with correspondence	90.4	88.9	90.0
Uploading data into the tax administration’s systems	86.5	87.0	86.0

Source: (OECD et al., 2024[2]), 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).

As the online services offered by tax administrations increase, administrations are recognising that for some of these services there might be opportunities to collaborate with other government agencies to provide a whole of government experience.

Table 3.2. shows that for roughly 40% of jurisdictions, making tax payments is part of a wider government online payment portal. In addition, for two thirds of jurisdictions, registration for corporate income tax (CIT) is part of a wider government online registration approach, and roughly half of jurisdictions do the same for personal income tax (PIT) and value added tax (VAT).

Table 3.2. Tax related services as part of a wider government service approach by tax type, 2024

Percent of jurisdictions where the respective tax process is part of a wider government service approach

Interaction type	Personal income tax	Corporate income tax	Value added tax
Registration for tax is part of a wider government online registration approach	50.0	66.7	48.0
Making tax payments is part of a wider government online payment portal	40.4	40.7	42.0

Source: (OECD et al., 2024[2]), 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 increase efficiency and reduce administrative costs, many tax administrations are also increasingly automating their online services. As Table 3.3. demonstrates, there are a range of online services for which tax administrations are now fully automating responses (when pre-determined criteria are met).

Table 3.3. Online services with automated responses by tax type, 2024

Percent of administrations that provide automated responses (when pre-determined criteria are met) without human intervention

Interaction type	Personal income tax	Corporate income tax	Value added tax
Registering for tax: Registrant receives automated response with the tax registration number	69.2	70.4	56.0
Filing tax returns: Returns are automatically processed and assessments sent to taxpayers	76.9	64.8	74.0
Making payments: Payments are instantaneously processed and reflected in balances visible to the taxpayer	46.2	51.9	52.0
Requesting extensions of deadlines: Requesting person receives automated response whether request has been accepted or rejected	26.9	22.2	22.0
Asking for tax payment arrangements: Requesting person receives automated response whether request has been accepted or rejected	48.1	44.4	42.0

Source: (OECD et al., 2024[2]), 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).

Use of technology during taxpayer interactions

In order to improve the taxpayer experience and the value of service offerings, tax administrations are increasingly supporting their static online content (for example, web pages and guidance notes) with interactive online services. To support this shift, tax administrations are increasingly leveraging technology during interactions with taxpayers to provide comprehensive, real-time and easily accessible assistance to them.

Virtual assistants

The use of virtual or digital assistants to help answer taxpayer questions and support self-service is common, as demonstrated by Table 3.4. which shows that nearly three quarters of administrations indicate having virtual assistants, such as chatbots. Nearly all of these administrations have virtual assistants that follow a set of pre-programmed rules during interactions with taxpayers. However, 28% of administrations are also using artificial intelligence (AI) in their virtual assistants to deliver more sophisticated levels of support. This can allow the system to cope with more complex questions being asked by taxpayers and/or more personalised answers being given. These systems also have the ability to self-improve over time.

Table 3.4. Availability of virtual assistants, 2024

Percent of administrations that have the respective process in place

Virtual assistant(s), such as chatbots, are available	If yes, …
	Virtual assistant(s) follows a set of pre-programmed rules during interactions with taxpayers	Virtual assistant(s) uses other artificial intelligence to personalise interactions with taxpayers
74.1	97.5	27.5

Source: (OECD et al., 2024[2]), 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).

Artificial intelligence

Artificial intelligence is starting to be used not only for powering virtual assistants, but also in other interactions with taxpayers, for example, to provide guidance to taxpayers as well as to assist tax officials. Just over a fifth of administrations use AI during such interactions, as can be seen in Table 3.5. This includes the use of AI to assist taxpayers during the filing of tax returns, to suggest potential responses to tax officials while dealing with incoming correspondence, or to assist tax officials during live chats with taxpayers.

Table 3.5. Use of AI during interactions with taxpayers (other than virtual assistants), 2024

Percent of administrations that have the respective process in place

AI is used during interactions with taxpayers (other than virtual assistants)	If yes, type of interaction …
To suggest potential responses for incoming correspondence	To assist tax officials during live chats with taxpayers	To assist taxpayers during the filing of returns	Other interactions
22.2	25.0	25.0	33.3	50.0

Source: (OECD et al., 2024[2]), 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).

Pre-programmed and automated service responses

The use of pre-programmed and automated service responses can reduce burdens for the administration and reduce costs, while at the same time manage high volume of inquiries in a consistent and accurate manner throughout the day. As illustrated in Table 3.6. around two-thirds of administrations offer services that follow a set of pre-programmed and automated responses during interactions with taxpayers, with most of them doing this as part of telephone services or return filing services.

Table 3.6. Pre-programmed and automated service responses during interactions with taxpayers (other than virtual assistants), 2024

Percent of administrations that have the respective process in place

Administration offers services that follow a set of pre-programmed and automated service responses during interactions with taxpayers (other than virtual assistants)	If yes, type of service …
Telephone services, such as interactive voice response (IVR) systems	Return filing services	Taxpayer registration services	Payment services	Other services
68.5	64.9	54.1	32.4	29.7	32.4

Source: (OECD et al., 2024[2]), 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).

Ensuring accessibility

Tax administrations need to consider that some citizens may not be able to access online services, for example, because they have no access to internet or are less able to use available online tools. Ensuring accessibility through offline service options, alternative formats, or the use of certain design practices, such as screen reader compatibility or text-to-speech options, can help bridge communication gaps and improves access to tax services. These efforts can help to strengthen trust in the tax system and support voluntary compliance.

Although the trend is increasingly for tax administrations to offer its services online, most also take measures to ensure that they remain accessible for taxpayers who are not able to communicate via the internet. Table 3.7. shows that 87% of administrations offer specific approaches to those that do not have online access. In addition, over three quarters of administrations ensure that online services are available to citizens who have visual, auditory, motor or cognitive disabilities, and 63% of those administrations measure how those taxpayers perceive the quality of the service offerings.

Table 3.7. Ensuring accessibility, 2024

Percent of administrations that have the respective process in place

Administration offers specific approaches to those that do not have online access	Taxpayers who have visual, auditory, motor or cognitive disabilities
Administration ensures that its online services are available to a wide range of users including those users who have visual, auditory, motor or cognitive disabilities	If yes, administration measures how those taxpayers perceive the quality of the service offerings
87.0	75.9	63.4

Source: (OECD et al., 2024[2]), 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).

Measuring taxpayer experience

Given the increased focus of tax administrations on providing online services, most administrations measure taxpayer experience in order to help in identifying issues of concern, improving quality, and increasing user satisfaction. It can also provide insights into gaps in service provision and new service expectations. As highlighted in Table 3.8., 91% of administrations measure taxpayer experiences in using online service. Of those that do this, surveys are the most popular tool to use, followed by online feedback channels. Just over half carry out user testing and web analytics, while just under half conduct interviews.

Table 3.8. Measuring taxpayer experience in using online services, 2024

Percent of administrations that have the respective process in place

Administration measures taxpayer experience in using online services	If yes, approach used…
Survey (online or paper)	Online feedback channels (other than survey)	User testing	Web analytics	Interview (phone or in-person)	Other
90.7	89.8	71.4	55.1	53.1	49.0	8.2

Source: (OECD et al., 2024[2]), 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).

Embedding services in taxpayer’s natural systems

By embedding services and processes in the natural systems used by citizens and businesses as part of their daily interactions, taxpayers can more easily comply with tax requirements in a seamless manner, and experience reduced administrative burdens and fewer data entry errors. Most of those natural systems are prepared by third-party software developers and many administrations are driving collaboration with those developers to open up new services, including pre-filling.

Integrating tax interactions into third party systems

The connection between the tax administration’s system and the natural systems of taxpayers is typically facilitated through Application Programming Interfaces (APIs) which allow a connectivity between systems without providing direct access. Table 3.9. shows that more than 80% of tax administrations are developing APIs, with over three quarters of them making their APIs publicly available for third party use. Further, as part of the process of developing APIs, more than half of tax administrations are engaging in co-creation with third parties.

Table 3.9. Development of APIs, 2024

Percent of administrations that have the respective process in place

Administration develops APIs	If yes, …
Administration makes a library of APIs publicly available for third party use	Administration engages in co-creation of APIs with third parties
83.3	75.6	55.6

Source: (OECD et al., 2024[2]), 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).

Table 3.10. illustrates for which type of interactions tax administrations have published APIs. The most common APIs are published for filing tax returns, for uploading data into the tax administration’s systems, for making tax payments, for registering for tax, and for dealing with correspondence.

Table 3.10. Interactions for which administrations have published APIs by tax type, 2024

Percent of administrations that have the respective process in place

Interaction type	Personal income tax	Corporate income tax	Value added tax
Registering for tax	34.1	35.6	30.2
Filing tax returns	59.1	64.4	65.1
Making tax payments	40.9	37.8	37.2
Requesting extensions of deadlines (filing and payment)	15.9	13.3	11.6
Asking for tax payment arrangements	11.4	11.1	16.3
Asking confidential enquiries in a secure environment	22.7	22.2	23.3
Filing tax related objections	15.9	15.6	18.6
Dealing with correspondence	31.8	33.3	30.2
Uploading data into the tax administration’s systems	54.5	51.1	51.2
Other interactions	34.1	37.8	44.2

Source: (OECD et al., 2024[2]), 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).

The OECD report Unlocking the Digital Economy: A Guide to Unlocking Application Programming Interfaces in Government (OECD, 2019[3]) provides an overview of the practices, techniques and standards used to deliver services for taxpayers through APIs. In addition, reports in the OECD’s Tax Administration Series contain numerous examples of API developments in tax administration, see Tax Administration 2024 (OECD, 2024[4]) and previous editions.

In addition, the 2022 OECD report Towards Seamless Taxation: Supporting SMEs to Get Tax Right (OECD, 2022[5]) examines how tax administrations are working to integrate taxation processes into SME taxpayers’ natural systems and identifies some of the key benefits and considerations.

Creating software packages for use by taxpayers

In addition to embedding services, some tax administrations have also started creating natural systems for taxpayers by developing software solutions that taxpayers can use, for example, for record keeping, the creation and conversion of electronic files and forms, and the pre-filling of returns. These software products may provide guidance, enhance accessibility, allow for a better integration between IT systems, and thus help reduce errors and improve compliance, while also reducing burdens.

As can be seen in Table 3.11., tax administrations can do this by themselves or in partnership with third parties. The most common software solutions created by tax administrations either by themselves or in commercial partnerships with third parties relate to return-filing processes, followed by solutions for electronic invoicing purposes.

Table 3.11. (Co-)creation of software packages, 2024

Percent of administrations that have the respective process in place

Development approach	Types of software
Bookkeeping and accounting software	Payroll software	Invoicing software	Return-filing software	Other software
Software created by the administration	16.7	16.7	35.2	48.1	33.3
Software for which the administration engages in commercial partnerships with third parties	20.4	18.5	25.9	31.5	27.8

Source: (OECD et al., 2024[2]), 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).

References

[4] 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.

[5] OECD (2022), Towards Seamless Taxation: Supporting SMEs to Get Tax Right, OECD Publishing, Paris, https://doi.org/10.1787/656c89ab-en.

[1] OECD (2020), Tax Administration 3.0: The Digital Transformation of Tax Administration, OECD Publishing, Paris, https://doi.org/10.1787/ca274cc5-en.

[3] OECD (2019), Unlocking the Digital Economy: A Guide to Implementing Application Programming Interfaces in Government, OECD Publishing, Paris, https://doi.org/10.1787/56697aa7-en.

[2] 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).