Digitalisation of tax administration : a Maltese perspective

Abstract

Purpose: This research study aims to assess how the digitisation of the Maltese tax administration would impact Maltese businesses. It also analyses whether tax compliance and the tax compliance burden would change due to the change in tax reporting. Lastly, the research study also identifies any challenges that digitalisation imposes on different companies. Design: This research study has adopted a qualitative approach which includes fifteen semi-structured interviews. These were held with accountants involved in the submission of tax returns, and were carried out with businesses of different sizes. Findings: The study found that businesses perceive a positive impact that with a digitalised change to the tax administration, and the procedures of a nationwide implementation procedures. However, it depends on both the companies’ and the Tax Commissioner’s resources. Tax compliance would not improve due to digital technologies, but the tax compliance burden would change. Although digitalisation reaps many benefits both for the tax authority and for businesses, there are three challenges that Maltese companies would face with the implementation of digital technologies; digital exclusion, the fees charged to clients, and administrative costs. Notwithstanding this, digitalising Malta’s tax system would be beneficial, as it would automate the mundane tasks. It is also the first step towards a more efficient tax administration system. View: This study is of value for the tax authority and all companies across Malta. It analyses the perceived changes, the necessary resources, and the challenges that may be faced. Moreover, this research seeks to fill a gap in the literature regarding how companies in Malta would face this change due to digitalisation.