At the meeting of the UN Committee of Experts on International Cooperation in Tax Matters from 18 to 21 October 2022 the committee heard a report on progress by the group on digitalisation and other opportunities to improve tax administration.

The group is developing a Guide to the Digitalisation of Revenue Authorities, providing a roadmap and guidance on the data governance framework. They presented the outline of the guidance to be drafted.

Roadmap

There will be guidance on how to develop a roadmap for the digitalisation process. Each country is starting from a different situation and will need to have a clear vision of what it is trying to achieve through the digitalisation of the tax administration and the end point it is trying to reach. The success of the digitalisation will depend on the leadership of the project, the human resources, the data quality and the legal context in which it takes place.

Data collection and use of data

The guidance will cover data collection and the use of the data received, including data storage and processing. The use of data is subject to data protection laws and this needs to be taken into account. Also, information exchanged with other countries is subject to rules on confidentiality and there will be constraints on the use of information obtained through exchange. Protection of the confidentiality of data means ensuring that the necessary infrastructure is in place to protect the data.

Legal framework

A country would need to review existing laws and consider what would need to be changed to create the framework within which digitalisation can take place and be effective. Some laws will need to be removed altogether, some will require updating (for example on data protection) and some new laws will be required to back up the digital procedures.

Tax officials will need to change the ways in which they deal with data and new procedures must be introduced to maximise the benefits of digitalisation.

Innovative technology

New technology can be introduced to upgrade existing processes and make them more efficient. Digitalisation can increase the efficiency of information exchange and potentially allow a greater amount of information to be received. Technology would also enable the tax administration to make better use of information received and to more efficiently match the data to taxpayers, provided the procedures are updated accordingly.

Model Framework

The subcommittee intends to put together a model framework for digitalisation and model legislation, allowing for the reality that each country is in a different situation and will need to decide on its own priorities.

Case studies

Case studies will be developed and included in the relevant sections of the guidance or collected in an Annex.

Other

There will be cross-references to work done by other organisations. For example, the subject of digitalisation has been considered by the OECD’s Forum for Tax Administration and developing countries may find it helpful to refer to their publications.