Digitalisation : the tax authorities’ perspective

Abstract

Purpose: The primary purpose of this study was to analyse digitalisation from the tax authorities’ perspective. Therefore, the author delved into how a new digital process is adopted and the potential costs and resulting benefits of digitalisation to the CfR. The study then attempted to understand the local tax authorities’ perception of international advancements, in order to appreciate the influence of international digitalisation on local tax authorities. The study further analysed the digital advancements that have been implemented locally to determine the stage of digitalisation within the CfR. Design: A qualitative research methodology was adopted for the study. Literature was analysed as a preliminary means of gathering information. Subsequently, 16 semi-structured interviews were carried out with tax authorities from the Commissioner for Revenue, the Malta Information Technology Agency, and a representative of Servizz.Gov. Findings: The findings indicate that, while the CfR has a process of analysing the costs and benefits before adopting a new administrative digital tax process, the costs are not the deciding factor of the investment since the CfR is a government institution. Furthermore, the findings indicate that Malta is lagging behind foreign authorities since Malta is a small country with limited resources. However, local tax authorities which deal with international countries are aware of the benefits provided by digitalisation, and positively perceive and anticipate such innovations. Nonetheless, although Malta is not as advanced as Western countries, it has worked diligently to improve digitalisation. Conclusions: Since the CfR is currently working on several new digital projects, a revamp in the services provided by local tax authorities is expected. Furthermore, the CfR must actively seek new advancements for adoption. Recommendations have been provided on how digitalisation can be used as the way forward, including gathering more information in real time, increasing data sharing, using such data collected for more analyses, and ensuring that the OECD recommendations are implemented in a timely manner. Value: The study provides opportunities for digitalisation within the CfR as it highlights its strengths and weaknesses, while revealing digitalisation in foreign tax authorities. It also provides a description of the process that local tax authorities undertake to adopt digitalisation in order to understand the way the CfR undertakes investment. Moreover, it seeks to fill the gap in the literature regarding the stage of digital innovation locally.