Many tax authorities have invested in digitalization, data integration and analytics. Several have already improved service, administration and compliance. However, much still needs to be done to leverage analytics as a standard practice across tax-related activities.
A number of challenges remain, from technical, organizational and financial issues to legal and cultural concerns.
How are tax authorities seeking to overcome these challenges and realize value through advanced analytics? In our discussions with progressive tax authorities, we have observed a number of steps being taken to transform into an analytics-driven tax authority.
An important starting point is having a clear vision of desired business outcomes and an analytics strategy that aligns with the broader organizational goals.
Once the strategy has been defined, the leading tax authorities are selecting the most appropriate operating model for their analytics program.
As with any transformation driven by new or emerging technologies, writing the algorithms that can detect risk is not the greatest challenge. It is far harder to establish — and sustain — an organizational model that allows analytics to not only flourish but also become embedded in a tax authority’s day-to-day operations.