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Data management

 

Current tax administration is, at its heart, a data processing operation heavily reliant on the availability and quality of data. With increasing digitalisation, more tax related data from taxpayers and third parties is being collected and used to improve the efficiency and speed of tax administration processes, as well as helping to provide new services.

 

New ways of collecting data

Data collection now goes beyond traditional processes with reporting systems being put in place that require the electronic transfer of taxpayer primary documents, such as invoices, in some cases in real-time. In addition, third party data reporting is expanded in many jurisdictions beyond employer reporting (for example, under Pay-As-You-Earn systems) to cover financial intermediaries and other stakeholders, including the data sharing between tax administrations and other parts of government. Data on the income reporting regimes in a number of selected jurisdictions can be found here: income of residents and income of non-residents

 

Use of data to provide new services: Prefilling of tax returns

Equipped with all this data, tax administrations are introducing new services, for example the prefilling of tax returns. With many administrations collecting salary and wage information directly from employers, the prefilling of personal income tax (PIT) returns is now applied by a large number of jurisdictions. (Click here to see for a number of selected jurisdictions the type of third party information used to prefill PIT returns.)

Pre-filling of returns can significantly reduce the compliance burden of taxpayers, and many administrations have started to include data on deductible expenses to allow for a full pre-filling of PIT returns. (Click here to see for a number of selected jurisdictions the categories of tax deductible expenses used to pre-fill PIT returns). In addition, the availability of electronic invoicing systems allows tax administrations to start to go beyond PIT returns and now cover (fully) pre-filled corporate income tax and value-added tax returns.

 

Using big data

To maximise the value of the data tax administrations have at their disposition, they also need to consider how share it effectively with other agencies and ecosystem partners. They also need to think about how to best analyse the data and having big data capabilities with the necessary people, skills and infrastructure is key for success in this area. Increasingly sophisticated use of analytics on expanding data sets is leading to a sharpening of risk management and the selection of a range of intervention actions, including through automated processes.

 

Data management

Note: To understand fully the information included in this map, users are advised to look at the source data tables and the original survey question as some of the self-reported data may not give the full picture and may need to be looked at in the wider context of the survey.

Sources: Tables DM1, DM3 and DM5

 

Data tables

The following tables provide details on tax administration’s approaches to data management, covering the collection and use of data, data sharing arrangements, data governance structures as well as the use of data analytics. The information is provided for tax administrations that have participated in the global survey on digitalisation of tax administrations. 

Data standards and data collection

This table provides information on the way tax administrations receive data from taxpayers and third parties, including whether administrations’ IT systems can routinely access data stored in taxpayer natural systems. It also looks at the use of recognised industry standards for exchange of data with the tax administration and record keeping.

Prefilling

This table gives details regarding the prefilling of tax returns, including from where administrations receive income or expense data that is used to prefill returns.

Data sharing

This table looks at tax administrations’ data sharing arrangements internally, with other parts of government and with non-government third parties.

Data governance

This table holds information about administrations data governance approaches.

Data analytics

This table contains information on the use of data analytics within tax administrations.

 

Case studies

  • Prefilling VAT returns
    • Peru: Link to a presentation explaining the proposal for filing VAT returns by using electronic records from taxpayers
  • Using the increased availability of data
    • Costa Rica: Link to a presentation on the use of geographic information to locate real estate that is subject to tax
    • Hungary: Link to a video explaining the tracing of invoicing chains
    • Peru: Link to a video on the use of web scraping techniques to non-compliant sellers on on-line platforms
  • Using analytics to sharpen the targeting of risks
    • Peru: Link to a presentation on the identification of atypical aspects in electronic receipts
  • Data governance and data management

Further information

Tax Administration 3.0: The Digital Transformation of Tax Administration Launching a digital tax administration transformation Tax Administration Series: Comparative Information on OECD and Other Advanced and Emerging Economies

Technologies for Better Tax Administration: A Practical Guide for Revenue Bodies

Advanced Analytics for Better Tax Administration: Putting Data to Work

 

 

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