Determining the systems and processes that will get the best results
Like most Government agencies, tax administrations must develop flexible IT infrastructure to manage the increasing number of digital services they need. But as legacy systems make up over 90% of their IT infrastructure, tax administrations need to determine what they can rebuild cost-effectively from the ground up, and what they can improve through investments.
For example, commercial off-the-shelf (COTS) digital solutions offer a full suite of services but need to be flexible enough to accommodate an agency’s exact requirements. And agencies considering custom IT architecture need to make sure they have the funding, skills and time to benefit from its individualized features.
Deciding when and how to collaborate, and with whom
The long-term vision for tax administrations is for their systems to interact seamlessly with the systems managing the other transactions that individuals and businesses carry out every day.
This means deciding which systems and processes they can perform more efficiently by working with a third party. It also means deciding what types of data and systems they can (and should) open to businesses and individuals. And it means choosing the right business systems, cloud and third-party technologies to manage that data and keep it safe. Adopting common standards around sharing and managing data, and new technologies to prevent data leakage, will be central to collaborating successfully.
Rethinking how to measure success
In the past, the important measures of a tax administration’s success included the number of audits it conducted or the size of its revenue gap. But when a tax administration transforms to be customer-centric and digital-first, other operational and performance measures start to become more relevant. That means asking questions such as “are we targeting refunds to the people that need them most?” and “how satisfied are taxpayers with our services?”
Tax administrations need to set realistic milestones and timelines for programs and develop tangible measures for both short- and long-term results. Because the better the measures in a transformation program, the more sophisticated that program will become – and the greater the likelihood of realizing tangible returns.