Tapping-Taxes-JG-ICTR-Conference-Presentation.pptx

Innovation

1. Prof Jennie Granger Tapping Tax Tapping Taxes: Will digital disruption change the game for testing tax compliance?

2. Is Revenue Administration About to be Disrupted? REVENUE ADMINISTRATIONS RESILIENT ADAPTORS: Automation of repetitive tasks, nationally networked Digital and smart data personalising interactions and supporting compliance Core asset: huge database BUT REMAIN SEPARATE CONNECTED SYSTEMS Will they integrate into digital ecosystems and tax obligations be automatically completed from your digital interactions?

3. Development of digital experiences Experience 1 Analytics customer insight, predictive power Analytics 2 More data faster, new products and services Cloud 3 Deloitte Insights, 2019 Platforms creating digital ecosystems sharing data to offer seamless bundles of services AI+ robotics + blockchain = cheap personalised trusted experiences Combined they create incredibly sophisticated insight Digital Game Changers Enabling Integration Either g ather data from many or integrate?

4. In future tax administrations will need to: Gather data from a complex digital footprint; or Tax return preparation and payment become a fully integrated service as part of the bundle of services   Financial Services Platforms Stepping-stone Individuals Banks a re becoming digital platforms bundling services with financial service providers AI and robotics could automatically personalise services based on customers’ profiles Could include analysing customers’ tap and go transactions to compile tax returns DIGITALLY EXTENDED SELF : Digital footprint : by that individual as a result of using, or being observed by, computing devices Third-party digital footprint : created by an individual, or a computer system Digital mosaic : collection of digital footprints used to create a picture of a person Digital persona : model created by analysis of digital footprints and/or other digital personas Digitally extended self : combination of above to provide fullest possible digital representation Parkinson, Millard, O’Hara and Giordano (2018) Adapted from Parkinson, Millard, O’Hara and Giordano (2018)

5. Embed Tax in Business Processes Stepping-stone Businesses R eporting and transactions a by-product of digitising business and accounting processes. Automated filing ‘attached’ via A pplication Programming Interfaces (APIs) Revenue Administrations must develop and manage an API ecosystem in partnership with software developers EXAMPLES : UK’s Making Taxes Digital automated VAT e-filing from businesses digital records Australia’s Single Touch Payroll reports payroll information as employees are paid

6. Tapping Taxes: Revenue Authority Capability Tax services Tech savvy collaborative professionals Networked software & hardware 1 Tech savvy collaborative professionals 2 Manage data rights and governance 3 Seamless tax administration Rethinking tax administrations’ business model PAST FUTURE Focus on the tax return Focus on tax services Tax administration as a ‘stand-alone’ organisation Tax administration as part of a network Focus on case level Focus on system level Focus on pre-filing services and post-filing verification Focus on ‘tax inclusive’ processes and seamless interaction Bringing data to rules Bringing rules to data Tax law and audit competences are key assets Knowledge and information management are key assets Interaction with taxpayers focuses on the process of taxation Interaction with taxpayers focuses on providing enablers ( Arendsen , Wittberg and Goslinga , 2011)

7. Tapping Taxes TAXPAYER CAPABILITY Digitally literate Understand rights and responsibilities regarding their data Be consent savvy Able to access digital platforms that enable digital integration Social inclusion What are the appropriate alternate channels for the digitally vulnerable? TAX PRACTITIONER CAPABILITY Value add increasingly tax advice Return preparation disappears Will tax compliance assurance role grow or diminish? Will need clients consent to access information from the various internet platforms Complementary skills to work seamlessly with robotics. Perspective

8. Tapping Taxes: New Compliance Challenges Tax services Tech savvy collaborative professionals 1 2 e data rights and governance Risk Identification & Analysis: Integrity of data and analysis embedded in digital ecosystems Test “tax compliance health” of ecosystems Gather and analyse digital and physical data from beyond ecosystem partners Analyse patterns by industry, occupation & issues key Compliance Tools: Data matching audits diminishing? Is digital nudge still viable? Digital tracking emerging? Who is accountable when its wrong?

9. Data Governance How should digital ecosystems be managed and governed? Are revenue authorities current constraints on data collection, sharing and confidentiality adequate for a world of digital integration? What about scraping and combining public data? When should consent be required? Or transparency? How far should it be shared within government for what purposes? Challenges and Ideas GOVERNANCE-BY-DATA SECURITY & SAFETY

10. Conclusion P lan for connectivity into taxpayers’ digital footprints and consider if it should in future become seamless integration.   A ssess and address digital capability gap (systems, skills & culture). Articulate governance and accountabilities of all parties in an eco-system including how data breaches will be addressed . Review access powers and accountability for accurate reporting for seamless integration. Consider if private sector digital tracking of customers should be used as a public compliance tool? Policy Recommendations

11. Granger J, De Clerq B & Lymer A (2021) Tapping Taxes—Digital Disruption and Revenue Administration Responses. In: Jul Kim C, Sri Hendriyetti N, Evans C & Taghizadeh-Hesary F (eds), New Frontiers for Tax in the Digital Age, Routledge (in publication), Ch 14. Jennie Granger Professor of Practice, School of A ccounting Auditing and Taxation, University of New South Wales, Sydney, Australia, email: [email protected] Tapping Taxes in publication: Andy Lymer Professor of Taxation and Personal Finance, Aston Business School, Aston University, Birmingham, United Kingdom, email: [email protected] Bernadene de Clercq Associate Professor, Department of Taxation, College of Accounting Sciences, University of South Africa, Pretoria, South Africa, email: [email protected]

12. Thank you Tapping Tax