Digitalization of Tax: Comparing New Zealand and United Kingdom Approaches (2018)
Type of ContentJournal Article
AuthorsSawyer AJ, James Sshow all
With the sizeable advances in technology and ever increasing demands to reduce costs, numerous revenue authorities are undertaking significant reform to move towards an online platform for engagement with taxpayers and their agents, as well as the basis by which revenue authorities operate. The digitalization of tax has come under the spotlight in both New Zealand and the United Kingdom recently, with concern growing over the impact this new approach will have on taxpayers, along with the associated costs of implementation and technological challenges. In New Zealand, the Business Transformation programme within Inland Revenue has been operating for over three years, representing the largest IT project in New Zealand history. Apart from concern over the inherent risks and potential for cost blowouts, the impact that an online platform will have upon NZ taxpayers, including those that do not currently need to interact with Inland Revenue, has received relatively little attention. Business Transformation has four key stages: enabling secure digital platforms, streamlining all tax types, streamlining social policy, and completing a new tax administration system. In the United Kingdom, concern has been expressed over Her Majesty s Revenue and Customs (HMRC s) persistence of pursuing the Making Tax Digital project with undue speed and without sufficient concern for implementation and other issues, such as those who are digitally excluded . Making Tax Digital is premised upon enabling HMRC to make better use of information, enable tax to be determined in real time, provide a single financial account for each taxpayer, and facilitate HMRC to interact digitally with its customers . In this paper the authors take a comparative exploratory case study approach to critically examining the approaches taken in each of the jurisdictions, focusing on the risks and challenges raised by each of the digitalization projects. Through this analysis, the paper will suggest lessons that can be learned, not only by the two respect revenue authorities, but by others that may pursue similar digitalization projects.