Tax administrations must take into account the risks associated with the implementation of digital tax collection tools, warns the Association of Chartered Accountants (ACCA) in a new report released Thursday, 13 December.
While the current evolution of the digitisation of the economy is certainly an opportunity for tax administrations to improve the efficiency of their processes, they must also manage the risk of imposing restrictive technological requirements on taxpayers, the report points out.
"Tax authorities may see a benefit in imposing a standardised system which drags the least innovative business into the digital net. However, there is a risk that enforcing these changes will in some cases do more harm than good if they compromise other businesses’ ability to explore all benefits offered by digital tools." Jason Piper, the author of the report and ACCA's head of tax law, told EUROPE.
"There is also the risk that if businesses are forced to change how they operate purely to comply with tax administrative requirements, then that will impose costs without any corresponding benefit." he added.
According to him, many tax automation and digitisation programs are developed based on evidence that the population as a whole "uses technology", but if a company does not have integrated systems or if the national legal or business environment has not yet changed, efficiency for tax administrations will be limited, he argued.
This is supported by the European Commission's 2018 report on the integration of digital technology, which also points out that it is not because governments and citizens use technology that companies exploit it properly.
The report includes several concrete examples of situations where the expected positive impacts of technological innovation have not materialized at all. "For example, the early stages of the Afghanistan customs programme, where proven technology was introduced but didn’t initially achieve its goals because the rest of the system wasn’t in place." explained Jason Piper.
See the report at: https://bit.ly/2PAWJ7X. (Original version in French by Marion Fontana)