A developing country that wants to continue to provide its citizens and businesses, respectively, with opportunities to expand their digital services and platforms, must continually create easy-to-use tools and platforms and push more citizens and businesses to adopt intact digital way of fulfilling their tax obligations.
A typical example of such a service is the electronic invoicing and keeping of electronic books. The aim is to have a more direct and comprehensive record of commercial transactions and therefore greater transparency in taxpayers’ transactions with the state. Businesses that do not use private software for electronic invoicing and bookkeeping could provide the state with its own digital platform through which businesses — small and medium-sized, as well as freelancers — who cannot pay and obtain, an expensive software to provide them with this service could be provided by the state itself.
In addition, government agencies themselves could use techniques for extracting data through social networks that are compared to the corresponding tax return data.
Another example is the use of big data, which is used by the Spanish tax authorities in tax audits related to real estate for cross-cutting purposes. This shows that technology is now a tool used by the tax authority, but at the same time it is a way available to the taxpayer to verify in a automated way his correct tax compliance.
But beyond the obvious usefulness of these methods for tax authorities, technology is the key for businesses themselves which can benefit significantly in terms of tax compliance. Procedures such as exporting, analyzing and auditing data on tax liabilities that in the recent past took days or even weeks to complete are now completed in minutes, with the risk of error being significantly reduced.
Therefore, the transition to a digital and automated everyday life and the reality of the so-called 4th industrial revolution, industry 4.0, radically changes the way we think and act in the near future we will see an increasing adoption of technology by all counterparties. Many companies have already applied exclusively the electronic method of invoicing and are looking for ways to further automate processes with the support of their tax advisors.
From the public side we will see an increase in services provided electronically to individuals and legal entities. This in principle seems to facilitate more fair and equitable taxation of citizens and businesses, and possibly lead to a more efficient income redistribution. The success of this venture can also contribute to the overall development of the developing economy and to the increase of the living standard of the citizens.
