OECD Tracks Tax Admin Changes In 56 Countries
The Organisation for Economic Cooperation and Development (OECD) said in a recent report that improving taxpayer services, while making non-compliance harder, is helping revenue bodies increase their efficiency and allowing governments to finance important programs that will further benefit their citizens.
According to Tax Administration 2015, which looks at 56 advanced and emerging economies, tax administrations continue to face the challenges of improving their performance while reducing costs, decreasing compliance burdens for taxpayers, and tackling non-compliance.
The report examined key performance trends, recent innovations, and examples of good practice across the 56 jurisdictions.
The OECD found that revenue administrations have invested significantly in digital on-the-go services. Average IT expenditure as a percentage of the total budget remained constant at 9.5 percent. Notable exceptions were Austria, Finland, Singapore, and Norway, where approximately 25 percent of the total budget is spent on IT. The report said that 95 percent of all revenue bodies offer the opportunity to file returns electronically, and over two-thirds achieve usage over 75 percent.
Total tax debt for OECD member countries rose marginally in 2011 to 2013, from around 22 percent to just over 24 percent of net annual revenue collections, the report said. This ratio is, however, significantly impacted by two abnormal “outliers” which, when removed, change the results for OECD countries to show a decrease from 12.7 percent in 2011 to 11.1 percent of annual net revenue collections in 2013. Notably, seven revenue bodies – Estonia, Ireland, Japan, Korea, Norway, Sweden, and Switzerland – have a collection-to-debt ratio of less than five percent.
The OECD attributed improvements in collection performance to:
- Strong management information systems;
- Well-developed analytics tools to guide use of extensive enforcement powers;
- Extensive use of tax withholding at source arrangements;
- Wide use of electronic payment methods; and
- Significant investment in information technology.