An initiative, high expectations

A few days ago, towards the end of the year, I was talking with a colleague who is a former tax administration official and who now works for a private company in the area of information technologies as applied to tax administrations.

The difficulties that exist to confirm the physical address of a taxpayer are undeniable; even more so when related to the verification of a new address that has been reported. The visit of an administration official would confirm that the details provided are correct, but in addition to being expensive, it is impossible to do it for all taxpayers. In the past we have seen some tax administrations developing mechanisms in their attempt to enable this verification. These strategies include requiring the presentation of a utility bill.

One proposal made by my colleague’s company is to use a mobile platform application for the physical address registration process. By using a mobile phone or tablet application with geo-referencing capabilities, the taxpayer would take a picture of the building and send it to the tax administration. Every new taxpayer, and everyone who performs a data update, would report with accurate longitude and latitude the physical address of their facilities.

The data would also be processed to register, “Google-Maps-style”, the location of different facilities on interactive maps. During a field tax audit, when a taxpayer is going to be visited, an official could consult the map for the location of the taxpayer’s domicile using his own mobile phone and could even use his favorite travel app for road directions to the taxpayer’s domicile. Of course, with the accumulated information of many taxpayers, individual routes for on-site control of business operations could be easily produced . Such application could also by used byr any citizen to report a business operating irregularly in a particular place.

This is an example of some initiatives that technology companies develop in different countries and which are, or may be of interest to the tax administrations. Some companies develop specific products and only for a particular administration, others develop their products with a more generalized approach to any type of industry or business, but which can also be of great interest to our tax administrations like Commercial off-the-shelf products to manage a complete Administration; or they can be specific solutions that address a particular sector, such as a “scoring” systems for tax risk management. It can be a software which, for example, displays large volumes of data, for identifying and analyzing social networks or for analysis, inference and regression. Or even software products or services provided to taxpayers for facilitating compliance or generating electronic documents that must be sent to the administration, such as the XBRL-type electronic invoice reports, or deal with specialized consulting services for the construction sector or specific adjustment of technological solutions.

Without a doubt, there are many possibilities. Some are known by the authorities, others are unknown, since they are developed in other markets or are distributed through a network of representatives that often do not give them a high priority.

At the Executive Secretariat we believe that the possibility for tax administrations to come into direct contact to these solutions, without any commitment, is useful, particularly when this contact can be made with several potential suppliers at the same time. It is, among others, the purpose of the well-known Technology Fairs: where solutions can be found and compared; to consider purchasing them or rejecting them; or why not, simply take ideas, inspiration, to develop new things. After all, it has already been said that “imitation is the sincerest form of flattery.”

With this idea taking shape for this year 2016, the Executive Council has approved the opening of the first CIAT technology fair in October, which will replace our Technical Conference for this year. This initiative “imitates” a long tradition developed by the Federation of Tax Administrators – FTA, a kind of CIAT that brings together the state tax administrations of the United States, which annually organize their technology event.

It is a risk for us. A risk that comes from the hand of doing new things, innovate, a risk which we are convinced that it is worth taking.

Tax administrations will know the existing possibilities through technology, the companies will be able to expand their markets and open up new horizons. On the part of our member tax administrations, we look forward to the participation of personnel from the field of technology, but the primary audience are the users in our administrations, from tax control and collection agents, economic studies and taxpayer assistance staff, to those of tax intelligence and internal control. It is much more about capabilities, services and new opportunities, than protocols, machines and speed.

In the coming months, we will be providing updates on our progress in the development of this event. This is only the initital presentation in order to generate expectations and interest among us, the future participants of our First CIAT Technology Fair.

Greetings, good luck and happy New Year.

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