The Top Three Challenges in Tax and Revenue Collection

martinCreating a sustainable tax system that can collect tax in an easy, efficient and cost effective manner is a goal that many Central Governments around the world share. To improve efficiency and reduce costs the UK Government have recently released a digital strategy outlining 25 services which will be improved with the use of digitisation. The 25 points include a number of items such as, land registry, power of attorneys, student finance and more. In the Government’s Digital Efficiency Report a huge £1.8 billion was identified in potential savings by increasing digital transactions to 82% of total Government transactions.

With this in mind, we take a look at the specific role of digitisation in tax and revenue collection. Below, are some of the top challenges that face modern Government administrations today, with suggestions on how the right technology can improve digital processes to reflect the needs of the modern taxpayer and help make tangible savings across the revenue collection process.

1. How do we make things easier for the taxpayers?
One way to improve efficiency in digital tax and revenue collection is to make the online process easier for the taxpayer. By deploying technology that is specifically designed to address tax collection within the digital era, revenue agencies can:

Simplify – Reduce the administration burden on the taxpayer through guided, automated online workflows.
Assist – Address specific taxpayer queries more efficiently through context-sensitive help, and use workflows to channel queries to the right people and departments for improved response times.
Engage – Improve taxpayer services through the proactive management of taxpayer or constituent relationships through e-reminders, notices and triggered alerts.

By linking all of the above, digital services can run 24/7 so taxpayers are able to pay the right amount of tax, at the right time with minimal revenue agency intervention.

2. How do we reduce internal costs?
The potential for Governments to make massive cost reductions to their internal costs by
reduce_costs “going digital” have already been identified.

Here are four key areas that savings can be made with the right technology infrastructure.

Improve – Rationalise, decommission and upgrade outdated technology for better system efficiencies, enhanced workflow and a modernised technology infrastructure.
Equip – Issue staff with the right tools and information that will help them do their jobs more efficiently and effectively
Automate – Streamline, improve and automate tax collection and calculation processes whenever possible
Reduce – Minimise the carbon footprint by reducing consumable costs through digitisation

3. How do we improve collections and compliance?
Digitisation can help close the gap between taxes owed and taxes collected. Below are three ways that technology can help:

Self Service – Promote voluntary compliance and convenience through easy to use “always on” self-service models
Act – Deploy high performance analytics to uncover, track, analyse, and address non-compliance quickly and effectively
Adapt – Leverage data to research and improve compliance measures and better customise taxpayer services

For decades, SAP Tax and Revenue Management solutions have helped hundreds of collection agencies around the world to improve constituent services and revenue collection efficiencies. SAP’s focus on delivering the right technology for an increasingly digital world has seen them become the world’s fastest-growing enterprise cloud companies.

With the SAP Cloud portfolio, tax agencies have the agility and confidence to deliver services in a way that suits their citizens’ needs, particularly in terms of security and reliability — whether completely in the cloud or on premise or in a hybrid form. Cloud solutions are driving transformation across the private sector, and innovative government agencies that embrace them can fuel meaningful change in the way government business is done achieving cost reductions.

The public sector will continue to seek new and innovative ways to reduce cost, and improving efficiency in the highly complex world of tax and revenue management is an important factor in achieving this goal. Meeting the challenges of the digital era needs the right technology and systems to serve as the backbone that supports a digital strategy. And the right technology, such as an SAP platform, can create a strong foundation for improving and building upon current digital processes. SAP technologies continue to evolve and these, along with the service capabilities of SAP Gold Partner, Invenio, means that technology modernisation programmes today will not only help digital efforts now, but will serve to help government organisations to adapt and improve as the digital landscape evolves.

For more information on SAP Tax and Revenue contact Martin Sobotka Direct.