The Default Mindset of High Performing Revenue Agencies
Digital innovation is relentless in the private sector – a source of non-stop disruption for dozens of industries.
In the retail sector, Amazon has started growing a network of physical stores that have no cashiers or self-checkouts. Instead, intelligent technologies invisibly track whatever you choose to walk out with, automatically deducting payment via your Amazon account. Many believe this frictionless shopping experience will soon be adopted by leading retailers across the globe.
Revenue agencies must also evolve alongside this fast-changing digital world. Many are closing in on a fully digitised era, with online and mobile platforms completely replacing paper-based returns, forms and letters. Agencies recognise that digital strategies involving ecosystem partners can increase personalisation, insights and automation, while making compliance quicker and easier for taxpayers.
The challenge is to make sure this evolution is smooth, safe and fast enough to satisfy citizens, businesses and other stakeholders, whose service expectations are set by the likes of Amazon, Google and Apple.
As several revenue agencies have demonstrated in recent years, it can be done. The Australian Taxation Office (ATO) is one of a number of revenue agencies that is making major advances in this area, having continuously improved major online initiatives in recent years, including Single Touch Payroll for withholding tax processing and the online services for agents.
According to Accenture’s Global Taxpayer Survey, these efforts are being positively received: 76 per cent of Australian taxpayers are satisfied with the ATO’s digital services. New Zealand, Singapore, the US and UK also performed well, scoring above the average (70 per cent) of the 12 jurisdictions in the study. The ATO’s result for the 18-34 age group was even more impressive, coming in at 81 per cent compared to the average of 70 per cent. This reflects their ability to meet the requirements of the “digital-native” generation, which suggests the ATO is moving in the right direction.
Consumers can easily compare the quality of online services received via digital channels, so we asked them to rate their revenue agency against the services of their banks, retailers and telecoms providers. There were some encouraging results. An average of 80 per cent of the respondents said their tax authority provided a better or equal service, with Singapore (95 per cent), Australia (88 per cent) and Ireland (87 per cent) recording the strongest results.
While this is all good news, with the pace of digital change as it is, no revenue agency can take a break from improving online experiences, automation and customer experience. Our research showed that while 69 per cent of visitors to tax authority websites found the answer they needed on the site, half of those only managed to find the answer to their question after a lot of navigating.
More worryingly, only 62 per cent are confident that they pay the right amount of tax. Even though some countries are markedly above the average – including the US (74 per cent), UK (74 per cent), Singapore (73 per cent) and Australia (69 per cent) – it is reasonable to believe these figures should be close to 100 per cent, given they reflect the fundamental effectiveness of the tax system.
What is interesting is that those countries above, where the highest confidence is reported, also have the most advanced tax practitioner ecosystems. We cannot show a conclusive causal link from this survey research, but I suspect that these intermediaries may play a key role in improving confidence.
If so, it would be worth considering why this is the case. Could it be that professional assistance makes these taxpayers more confident? What is certain is that there are ways in which access to tax intermediaries can be made quicker, easier and cheaper and potentially simplify the process for both taxpayer and intermediary. This may not fit with every intermediary’s business model, but it is in tune with the digital age.
It is also clear from the survey is that as people conduct more of their lives online, they want revenue agencies to continuously improve digital services. Rising to this challenge involves a clear break from many traditional practices, and it is encouraging to see several agencies now taking bold steps along the trails blazed by the world’s top technology companies.
Look out for my next post where we will extend these threads and take a special look at how revenue agencies can use cleverly designed digital services to reduce the burden of taxpayer errors.
 The 12 countries included: Australia, Denmark, France, Ireland, Japan, Netherlands, New Zealand, Norway, Singapore, Spain, the U.S. and the UK.