Reimagining tax authorities for the future

The COVID-19 crisis has devastated lives and livelihoods around the globe. Just as businesses have had to transform operations and individuals have had to rethink every aspect of daily life as they respond to the crisis, governments also have had to reinvent how they operate. This is especially true for tax authorities, which face new challenges as they seek to support unprecedented levels of government spending1 as well as a recovery from the deepest global recession since the end of World War II.

Tax authorities are figuring out how to operate with remote workforces and rebuild audit strategies that are sensitive to current economic conditions. They are deploying new tools to support collections efforts as large-scale debt moratoriums, filing postponements, payment extensions, and widespread bankruptcies introduce noise into the traditional analytics used to segment taxpayers. Tax authorities are learning to do all of this while facing enormous pressure to collect tax revenue while also being considerate of the taxpayers trying to recover from the crisis.

Many tax authorities were facing challenges even before the COVID-19 crisis. For example, in 2017, the European Union’s value-added-tax (VAT) gap alone was approximately €137 billion. For context, that’s equivalent to nearly 20 percent of the European Union’s historic Next Generation EU fund that was recently agreed to as a way to help countries recover from the pandemic-related recession.

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Πηγή: mckinsey

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