Tapping taxes – digital disruption and revenue administration responses:Digital Disruption and Revenue Administration Responses

Abstract

Tapping taxes is a metaphor for exploring whether the next wave of digital disruption will have as dramatic an impact on the future management of revenue systems as it continues to have on business models. It is now being asked, will revenue administrations face dramatic disruption from digital competitors? This chapter explores a future operating model of digital integration, where revenue systems tap seamlessly into the digital footprints of people and businesses. While engagement with revenue systems has become increasingly digital and efficient over time, it has fundamentally remained separate, with data ingested and then exploited by revenue authorities. This chapter touches on some of the technological innovations and trends that could be stepping-stones into a future where revenue administration systems are directly connected to transactional and other systems. In the future, taxpayers may literally tap to transact and, as a by-product, their tax returns may be automatically prepared, and their tax calculated and paid. This chapter explores some capability implications for revenue administrations, practitioners, and taxpayers before discussing some of the legal, ethical, and capability challenges and opportunities that integration would create for data governance. It concludes with some recommendations. Although this study focuses on intra-country analysis, many of the issues have broader, inter-country implications that are beyond the scope of this chapter