Tax and Technology

1. General overview

The growing digitization of various industries and economies needs no introduction. This phenomenon has led to a significant increase in the amount of data generated and stored electronically. Consequently, this has also created new challenges and opportunities for tax administrations and processes around the world.

The Organization for Economic Cooperation and Development (OECD) is advancing a state-of-the-art approach to tax administration known as “Tax Administration 3.0”. The goal of this model is to streamline tax processes and minimize the burden of administrative tasks through the incorporation of technology. The aim is to make the entire tax process more seamless and effortless over time.

In a report, the United States Internal Revenue Service (US IRS) estimated that the annual amount of non-compliance, also known as the “tax gap” was estimated at approximately USD 428 billion for the years 2014–2016 after accounting for enforcement measures. The report further states that 13 % of Individual, corporate, employment, and gift taxes go unpaid. These numbers are up from the same report by the IRS for the years 2011–2013. The trend seems likely to continue to ri...