The environemnt in which tax administration works is undergoing fundamental changes. This change covers not only what they do and the technologies they use, but also the dramatic increase in data sources and analytical capabilities, as well as the growth in third party providers. These changes are allowing tax administrations to rethink how they can best achieve their objectives of a high-level of taxpayer compliance and satisfaction, efficient tax administration and a reduction in burdens for taxpayers. This is leading tax administration to reconsider their current mix of activities and in particular how a changed mix of service offering can produce better compliance outcomes.
More emphasis is being placed on proactive approaches, including co-operative compliance, the upstreaming of interventions closer to a taxable event, and compliance by design processes such as pre-filling of tax returns and trust-enhanced technologies. Significant challenges still remain in how best to respond to changes in working patterns and the potential impact on the tax base, how to best utilize and support external third parties and how and where burdens can be reduced.
Many tax administrators are already considering these issues, including the new capabilities they might require, and how the expectations of tax auditors will change over time. In particular, tax administrators report that they expect an increase emphasis on checks of the robustness of upstream process and compliance by design systems, including those provided by third parties, to sit alongside a stronger focus on high-risk taxpayers as well as combating fraud and money laundering. The experience and knowledge of auditors to enable and support these moves while maintaining the integrity of the tax system will be of primary importance to administrators as they manage this change.
These developments take place against the background of changing taxpayer expectations as to levels and methods of service in line with wider developments in the use of new technologies and tools. They are also taking place at a time when tax administrations are implementing major changes to the international tax rules and reconsidering how they can best provide greater tax certainty to help facilitate investments and growth.
For more information about tax compliance, international tax, tax laws and developments in technologies, auditing, get in touch with our team of senior consultants.
Dr Pete Mhlanga
PhD Law (UNISA)
Harvard Professional & Executive Development
Risk | Compliance | Governance Law (Wits)
LLM (Public International Law) (UNISA)
LLB (Tax Law | Company Law) (UNISA)
