Tax Administration 2024: Overview
Tax Administration Series (TAS)
• Launched in 2004
• Objective:
Assisting tax administration analysts with understanding the design and administration of tax systems in other jurisdictions and to draw cross-border comparisons. While primarily aimed at analysts, it can also be a useful tool for senior tax administration managers or officials in ministries of finance when considering changes in tax system administration.
• Coverage:
Tax administrations in 58 advanced and emerging economies making up around 90% of world GDP.
• Data gathering process:
TAS 2024 presents the results of the last 4 rounds of the ISORA survey launched between 2020 and 2023.
The survey is governed by: CIAT, the IMF, IOTA and the OECD. Since 2018, the ADB also participates in ISORA.
166 administrations completed the survey online using the IMF’s Revenue Administration Fiscal Information Tool (RA-FIT).
ISORA 2023 participation
Source: http://data.rafit.org
Tax Administration Series: 2024
• Content:
– The report covers all aspects of tax administration:
Responsibilities and collections
Registration and identification
Assessment Services
Compliance
management
Budget and workforce
Collection
Disputes
Special feature on tax gap estimations
Governance
Tax Administration Series: 2024 edition (continued)
• Content:
– It includes performance-related data, ratios and trends up to the end of the 2022 fiscal year
– It also provides unique insights into tax administration processes that have not been examined in such detail since the publication of the eighth edition in 2019
– In addition, the report also contains more than 100 country examples that highlight recent innovations and good practices introduced by participating tax administrations
– To note: Starting with the 2024 edition, the publication does not anymore hold ISORA data tables, instead Annex A refers to the online data tables on the RA-FIT portal (http://data.rafit.org)
Key figures related to the 58 administrations covered in the publication
Note: The figures are based on data obtained through the 2023 ISORA survey. The data has been converted to EUR using the exchange rate of 1 August 2024. They are minimum figures as not all administrations were able to provide information for all data points. Figures relate to the fiscal year 2022.
Tax Administration 2024: The ongoing evolution of tax administration
The ongoing evolution of tax administration E-filing and
e-payment
are the norm
• E-filing rates continue to rise: From 2014 to 2022, average e-filing rates for PIT, CIT and VAT returns have increased significantly – between 17 and 23 percentage points (see table below)
• E-payment figures are high: In 2022, around 90% of payments (by value and number) were made electronically, an increase of around 10 percentage points since 2018
Table 4.3. Average e-filing rates (in percent) by tax type, 2014 and 2022
The ongoing evolution of tax administration
New pre-filling approaches
• Pre-filling returns:
– Number of administrations that prefill PIT returns with income information increased by almost 10 percentage points between 2018 and 2022, now at 88%
– Around 60% prefill PIT returns with certain deductible expenses, such as donations, school fees, retirement contributions and insurance premiums
– New data sources allows pre-filling to move to CIT, PAYE and VAT returns
• Use of data science techniques to prevent non-compliance, for example, spotting errors that taxpayers make as they finalise their return
• Latest developments on this are described in Chapter 4 (Boxes 4.2 and 4.3)
The ongoing evolution of tax administration Online
interactions are prevailing…
• Taxpayer use of digital contact channels continues to increase, while in-person visits to tax offices are still well below pre-COVID-19 pandemic values (see table below)
• In 2022, 64% of tax administrations used virtual assistants to respond to taxpayer enquiries and support self-service; a 29 percentage-point increase since 2018
Table 5.4. Service demand by channel
The ongoing evolution of tax administration
Moving towards more taxpayer centred services
• Around 85% of administrations measure individual taxpayer satisfaction, and 75% business taxpayer satisfaction
• Administrations use statistics about service channel usage to create new or improved services, and to anticipate service demand to adjust staff allocation
• More than 70% of administrations employ user interface design specialists with the goal of ensuring that services are easy to use
• Majority of tax administrations report carrying out educational initiatives and around half provide free tax services for new businesses and lower income individuals
The ongoing evolution of tax administration
Big data continues to open-up new opportunities
• Increased availability of data allows for the use of more sophisticated tools, for example artificial intelligence, machine learning or robotic process automation Status
Table 6.10. Evolution of the application of data science tools, artificial intelligence and robotic process automation between 2018 and 2022
Percent of administrations
and use
The ongoing evolution of tax administration
Adapting tax compliance to the technology opportunities
• Around 85% of administrations have a formal compliance risk management strategy
• Administrations receive comprehensive information on income payments, and many have access to other data such as from customs, social security agencies, stock exchanges and/or online vendors
• Close to 80% of administrations are using electronic compliance checks as part of the return filing process
– Around 60% of those do this during the process of completing the return or while submitting it, for example, via prompts and real-time nudging indicating that information might be missing or deductions to high
• Around half of administrations use of AI for risk assessments and detecting fraud
• 80% of administrations report using big data, including to improve compliance work
The ongoing evolution of tax administration
Preventing disputes
• It is common practice for administrations to provide rulings to set out how they will interpret the laws they administer, and how they will interpret the tax law in particular situations
• Close to 90% of administrations report that they enter into Advance Pricing Arrangements (APAs). To support this process, they have on average 17 staff specialised in APAs.
• Co-operative compliance programmes help manage compliance and enhance tax certainty. Three-quarters of administrations report having such programmes for large taxpayers.
The ongoing evolution of tax administration
Tax arrears continue to decline
• Total amount of outstanding arrears remains very large, in the region of EUR 2.7 trillion
• Around EUR 810 billion are considered collectable
• Average ratio for total arrears to revenue collected declines:
– During 2020 – the first year of the pandemic – the ratio increased significantly, on average by more than 20%
– Between 2020 and 2022, the ratio decreased in 77% of jurisdictions
Table 7.1. Evolution of average arrears ratio between 2018 and 2022
The ongoing evolution of tax administration Using debt
collection powers
The ongoing evolution of tax administration
Robust oversight and control features in place as part of the changes
• Administrations generally have robust internal controls:
– Internal audit functions are reported by 97% of administrations
– 97% of administrations also report having a public service-wide code of conduct, and close to 90% report having their own code of conduct
• 83% of administrations are subject to an external auditor
• Around 95% produce an annual report, and 90% of those also publish it
• 85% of administrations prepare a formal set of service delivery standards and around 60% of those make the set of delivery standards public
The ongoing evolution of tax administration
Managing the workforce to deliver change
• Tax administrations have relatively advanced approaches regarding talent recruitment and retention, learning and development, and staff motivation and performance.
• However, there is scope for additional gains as regards diversity management.
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