Digitize your tax services with Govstack
By Rebecca Christoforidis
Published April 28, 2023
When asked about completing his income tax, Albert Einstein answered, “this is a question too difficult for a mathematician, it should be asked of a philosopher.” Regrettably, philosophers who specialize in unravelling the mystery of taxes are scarce, but we do have technology, and it is making tax season…less taxing😊.
In recent years, there has been a significant shift towards the digitization of services in many areas of our lives. One area where this trend is particularly noticeable is in the provision of tax services by governments. Increasingly, governments around the world are providing tax services and information online for their citizens, making it easier for people to manage their taxes and stay compliant with tax laws.
Let’s explore some of the benefits of this digital approach.
The advantages of digitizing tax services
Online tax services and information have become an essential component of modern taxation systems. It benefits both citizens and governments in myriad ways:
Online (government) tax services and information have revolutionized the way citizens interact with their tax authorities. Instead of having to visit physical offices and wait in long queues, taxpayers can now access all the information they need from the comfort of their homes or offices. This is particularly beneficial for those who live in remote or rural areas, as well as those with mobility or accessibility issues. They can file their tax returns, schedule autopay options, make direct payments, and access their tax history all online.
Access and efficiency
Online tax services are available 24/7, which means that taxpayers can access them at their convenience. This is particularly important for those who work during regular business hours and may find it difficult to visit government offices during these times. It also eliminates the need for manual paperwork and reduces processing times, which means citizens can file their taxes faster and more efficiently.
It also increases compliance rates, as taxpayers are more likely to stay compliant when they have access to online resources that make it easy to stay on top of their taxes.
Sustainability is more important now than ever before. By moving tax services online, governments are reducing the need for paper-based systems. They can communicate with residents electronically eliminating the need for paper mail. It will also reduce the carbon footprints incurred during traditional mail delivery.
Online tax services reduce the risk of potential errors, as online services are typically more accurate and less prone to human errors than paper-based systems. Automated workflows can perform checks and validations, manage and review submissions and issue email notifications to ensure that information collected is accurate and useable.
By providing citizens with easy-to-use online tools, governments can reduce the costs associated with manual processing and paperwork. This can lead to potential cost savings for taxpayers as well, as governments may be able to pass on some of these savings in the form of reduced tax rates.
Additionally, online tax services and information provide citizens with greater transparency and control over their taxes. This can help build trust between citizens and their government. It also allows them to access their tax information at any time and easily track their tax payments and refunds. This transparency ensures that taxpayers have a clearer understanding of how their taxes are being used and provides them with greater confidence in their government's tax system.
Challenges to online tax services
The advantages of online tax services notwithstanding, governments face key challenges when it comes to online service delivery. These include:
Not all citizens have access to the internet or the necessary technology to use online tax services. Governments must ensure that alternative options are available for those who are not able to use online services.
One of the biggest challenges in providing online tax services is ensuring the security of citizens' personal and financial information. Governments must use the latest security measures to protect against cyber threats and data breaches.
Online tax services must be user-friendly and easy to navigate. Governments must ensure that citizens are able to find the information they need and complete their tax returns without difficulty.
Online tax services can experience technical issues, such as system crashes or slow processing times. Governments must have contingency plans in place to address these issues and ensure that citizens experience no negative impacts.
The Govstack advantage
Overcoming the challenges mentioned above requires a robust digital platform and a way to make it accessible for everyone. The latter can be addressed by making technology available at public places like libraries, city halls, and other designated areas and providing training on how to use it. The first requires a digital solution with forms optimized for tax filings, strong security to protect taxpayers’ information, and a reliable communication tool to keep residents informed throughout the process.