The collection of taxes and duties is, by its very nature, the area in which the State has the most trouble in getting citizens onboard. The State must therefore pay particular care in order to get citizens to buy into the process and to maximize tax revenues and reduce fraud.
Rather paradoxically therefore, we find tax payment systems are spearheading the modernization of states. This is due to the fact that Finance Ministries often have the first say-so in whether or not investments are made in e-Government programs.
The second paradox is that fiscal applications are actually widely acclaimed by citizens in most countries where they have been rolled out, and particularly so as these applications display a high level of security, privacy and personalization.
It is reassuring for officials to see that, although such programs require considerable investment and resources, they yield a rapid and significant ROI when applied in the fiscal sphere. Tax, like social security, is an area in which lightening the administrative burden can quickly bring about positive results, not least in boosting the competitiveness of businesses.
The payment of taxes is one of the most fundamental examples of a citizen fulfilling his or her obligations to the state, here in a totally rethought framework. It can therefore be accompanied by major communications campaigns on citizen participation in the modernization of the state. Dematerialization and simplification of procedures, especially involving elimination of paper, are well perceived by all as an appreciable qualitative step forward.
Thus, the fiscal sector, somewhat surprisingly, finds itself at the heart of a transformation process whereby an administration is moving to both a more citizen-centric culture, by offering real personalized services, and a more environmentally friendly culture with a far-reaching dematerialization of administrative procedures that affect millions of households and businesses.
As in all areas of e-Government, the most significant benefits are:
- A significant saving of paper flows
- Better, quicker tax revenue estimates
- Tiny potential for error compared to paper declarations
Paperless taxation procedures not only benefit the State, but also make the citizen’s life easier. They are also a powerful vector for transparency and trust in e-Government. We observe that where identification, authentication and signature can be performed using a secure document such as an e-ID card, then public acceptance is accelerated.
In Belgium, for example, all adults over 16 hold a national e-ID card. In 2009, the number of citizens using Tax-on-web doubled compared to 2008 (source ASA – Agency for Administrative Simplification, November 2009). This is one of 600 personalized applications available in the country.
In Austria, which has also had electronic identification for several years, between 70 and 80% of citizens were using the online tax application by end 2009 (source Austrian Federal Government, November 2009).
In Estonia, where every citizen has been issued with an eID card since 2007, a total 86% of the population was using this application … by end 2007 (source Linnar Viik, a former adviser to Prime Minister, November 2009).