Maximizing revenue and delivering citizen-centric services are the twin priorities of tax leaders in both Spain and Italy.
Although the global economy appears to be slowly recovering, the financial crisis continues to cast its shadow. Like many other countries, two nations connected by similar lifestyles and geography in southern Europe, Spain and Italy are relying on their tax collections to help address the deficits in their governments’ budgets.
Jesús Gascón and Marco Cuccagna, tax leaders in Spain and Italy respectively, have suddenly found themselves center stage. Politicians, economists and other stakeholders are looking to them to deliver as much revenue as possible. So how are they doing?
“We now have a modern tax management system that is in line with the rest of Europe and other countries around the world” says Gascón. Also noteworthy is the deployment of up-to-date technology,” he continues.
“Our country has chosen to offer most of its services online. In the beginning, the numbers were very modest, but these soon soared with more and more taxpayers filing online.”
Gascón feels Spain has made progress, but there is still work to be done. ”In the ideal world, the tax system would be simplified — or at least not made more complicated — so that it would not be more complex than it is today,” he says.
“There must be greater legal security and greater confidence between the government and society. Progress has been made in recent years but there is still some way to go.
It is becoming increasingly necessary to have a fluid relationship with business organizations, companies, the people in charge of applying the tax regime, advisors, managers, large firms, other public administrations…in short we must act in a coordinated manner and work together.”
Jesús Gascón, Spain’s Tax Leader: “The main problem now is how to shore up public finances. We need to return to an acceptable taxation level that will allow us to reduce the deficit.”
Since October 2006, the management of national and local tax collection in Italy has been carried out by Equitalia, a public agency based in Rome that aims to improve the efficiency of a system that was previously run by the private sector.
Marco Cuccagna, its Director General, says his organization’s twin priorities are targeting tax evasion and contributing to Italy’s recovery from the global economic downturn.
“Before Equitalia was established, Italy’s tax collection system was operated by the private sector, predominantly banks,” he says. “Now, under the new system, our mission is to manage tax revenues on a national basis through a new procedure, which includes increasing the activities of local front-office services, instead of only back-office ones.”
“The organization has several principal aims,” explains Cuccagna. “We are working to create a closer relationship between the state and its citizens and to simplify and make transparent any interaction with local authorities, including through an increasing level of computerization of information flows.
This means more and better information being available to taxpayers. To this extent, some relevant projects of rationalization of the existing structures are underway.
“Currently there are about 400 offices across Italy providing tax information to citizens. We want to increase the number, capitalizing on the fact there is now only one recognized national tax collector across Italy. The key ratio is the proximity to citizens. The goal is to have offices within 25km — it is currently around 32km.”
Many tax administrations around the world have long been accused of over-complexity. Certainly, the collection and maximization of revenues is a complicated business. But with the clever use of IT, as well as the provision of clearer and better information to taxpayers, greater efficiencies should follow.
