This chapter provides details on initiatives put in place by tax administrations to assist taxpayers with familiarising and using digital tools and services they have developed. Further, it looks at programmes meant to directly assist taxpayers who face difficulties in fulfilling their tax obligations or in receiving benefits and credits they are entitled to.
Building Tax Culture, Compliance and Citizenship
A Global Source Book on Taxpayer Education, Second Edition
5. Providing practical assistance and support to taxpayers
Abstract
The complexity of tax systems and difficulties in understanding tax obligations may lead to unintentional errors on the part of taxpayers or, in the worst of cases, reduce the efforts they put into ensuring their tax compliance. This can lead to significant loss of revenue in aggregate, as evidenced by some tax-gap calculations (HM Revenue and Customs, 2021[1]),1 as well as both direct and opportunity costs for taxpayers which may have implications for economic activity. It can also result in taxpayers not receiving benefits and credits they are entitled to, with serious impacts for the most vulnerable in society. Given these concerns, many tax administrations are expanding their taxpayer education initiatives to provide an increasing range of practical assistance and support.
Practical assistance can be provided by tax administrations through:
Developing specific tools and services for taxpayers, such as digital assistance (e.g. chatbots), e-mail, social media and tax calculators, among other options. However, for implementation to be successful, taxpayers need to understand that these tools are available and know how to use them properly, bearing in mind that some taxpayers will be digitally disadvantaged.
Offering direct assistance to taxpayers, for example from tax officials or trained individuals who provide one-to-one support (e.g. tax clinics).
This chapter looks at both of these areas, with a particular focus on how tax administrations assist taxpayers in using new digital tools and services, and how they provide direct assistance to those that may face difficulties in fulfilling their tax obligations or receiving benefits and credits.
Further details on 30 of the initiatives analysed to inform this chapter can be found in Annex A.
5.1. Assistance in the use of digital tools and services
5.1.1. Assisting taxpayers in using digital new tools and services
Technological advancements have led many tax administrations to introduce new digital tools and services over recent years. This is well illustrated by the country examples included in the 2021 edition of the OECD Tax Administration Series (TAS) (OECD, forthcoming[2]) as well as earlier editions of the same series. The new tools and services are not only introduced to improve the efficiency and effectiveness of the administration and collection of taxes and other revenue, but also:
To respond to taxpayer expectations regarding communication and service channels. Data from the 2021 edition of the TAS shows that taxpayer uptake of digital contact channels (online, email and digital assistance) is increasing, while usage of traditional channels (telephone, in-person and paper) continues to decrease (Table 5.1 below).
Table 5.1. Service demand by channel
Source: OECD (2021), Tax Administration 2021: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/74d162b6-en, Table 5.1.
To support self-service and provide 24/7 access to information. The 2019 edition of the TAS includes information on a number of e-services and tools offered by tax administrations to provide self-service options to taxpayers. The data in that report shows that by 2017, a large majority of administrations provided tools and calculators on their websites as well as online services and digital mailboxes; a small number had already introduced chatbots. The information from the 2019 TAS is shown in Table 5.2 and Table 5.3.
While the 2021 edition of the TAS does not look in detail at the e-services provided by tax administrations, it does contain new information as regards chatbots. It shows that the number of administrations using chatbots to help respond to taxpayer enquiries and support self-service has increased significantly between 2017 and 2019, with close to 50% of administrations reporting the use of such technology in 2019 (OECD, forthcoming[2]).2
Table 5.2. Provision of e-services and tools to support self-service, 2017
Percent of administrations
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/74d162b6-en, Table 1.5.
Table 5.3. Services provided via mobile applications, 2017
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/74d162b6-en, Table 1.6.
To reduce taxpayer burdens when complying with their tax obligations. Tax administrations are concerned about the administrative burdens taxpayers face in complying with their tax obligations. For many, the issue of reducing the compliance burden has become a high priority (Figure 5.1) and they are increasingly taking proactive and innovative approaches to minimise compliance burdens. (The OECD Forum on Tax Administration has also published a maturity model on the measurement and management of the compliance burden aimed at helping administrations to evaluate their level of maturity and possible reform options (OECD, 2019[3]).)
Figure 5.1. Relative priorities of key aspects of tax administrations’ service and assistance strategy
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/74d162b6-en, Figure 1.3.
Materialising these aims and objectives requires widely adoption by taxpayers of the new digital tools and services. This means that tax administrations not only need to advertise the availability of the new tools and services (something that is covered in Chapter 4) but also to teach and show taxpayers how to use them for their own benefit. This includes convincing those who may be scared or have negative sentiments towards using technology to comply with their tax obligations. Any difficulty in applying the new tools and services (even if merely perceived) may result in taxpayer refusal to use them, which could lead in turn to reduced compliance and additional costs for the administration to keep legacy tools and services up and running.
Against this background, tax administrations may wish to consider ensuring that taxpayers are involved in the design and testing of new services (taxpayer-centric design) as well as providing taxpayers with practical assistance and user guidance when new digital tools and services are launched. This may include preparing tutorials explaining step-by-step how new tools are used or providing documents that set out the benefits of switching to the new services, including time and/or cost savings. The following section provides an overview of how some administrations have accompanied taxpayers in the use of new digital tools and services.
5.1.2. Illustrating the benefits of new tools and services and how to use them
It’s important to find correct tone, language and media to communicate to different audiences. Moreover, it’s fundamental to help taxpayers with e-service using new media (imagines, video, social).
Sergio Mazzei, Head of Press and Communication Office, Italian Revenue Agency, Italy
To increase uptake in the use of new digital tools and services, it is important to illustrate to the taxpayer population why they should use them (for example burden reduction and quicker access to information) and how to use them. Practical assistance should be considered an important step in a smooth transition from traditional contact channels to digital contact channels. There are many ways for tax administrations to illustrate the advantages of new tools and services; below is a selection of those reported by administrations that participated in the survey underlying this report:
Producing videos and making them available, for example via YouTube or on the tax administration website, appears to be a common way of explaining in detail how to use new tools and services. The Belgian tax administration has, for example, uploaded tutorial videos on YouTube explaining how to use the new online payment application and has promoted them via social media. The tutorial videos targeted about 2 million taxpayers and resulted in a 332% increase of electronic payments within the first two months after launching (compared to the same period in the previous year).
Videos have the advantage of being available 24/7; they can be shared easily among the taxpayer population; and, if they are reasonably short, they can be watched on the go providing tailored information for particular situations. However, one important disadvantage of videos is that they do not reach taxpayers that do not (or not always) have online access. Explanatory videos on specific aspects of tax compliance (for example filing deadlines or new tax requirements) could be shown on television to reach a wider segment of the population.
Producing and targeting written communication. Tax administrations will often know which taxpayer segment will be concerned by a new tool or service and, typically, how to contact those taxpayers (for example because the administration has the postal or the e-mail address). Leaflets or manuals that explain how to use new tools or services can therefore be very effective when trying to reach out to a wide group of taxpayers, whether by post, e-mail or through third parties (such as libraries, citizens advice centres, local authorities etc.) For example, when the Finnish Tax Administration launched the new electronic taxpayer portal (see Box 5.1.) it provided all Finnish households with a leaflet. Limitations in the tax register may be addressed by working with other government agencies (for example, those in charge of the population register).
Building demo versions of new tools and services that can be used by the taxpayer population may be an effective way to illustrate advantages, at the same time allowing taxpayers to test new tools. For example, the Georgia Revenue Service (GRS) produced a demonstration version of its taxpayers’ secure web-portal. The test version allows students (and other stakeholders) to familiarise themselves with the range of services provided by the GRS (OECD, 2019, p. 37[4]).
Involving other stakeholders to train taxpayers in using new tools and services. Many taxpayers use tax agents or tax intermediaries for their interactions with the tax administration. In some situations, a new service may require the use of a third-party tool, for example a third-party software. In these situations, it may also be advantageous for the administration to work with the software providers to assist taxpayers in using the new tools and services.
The examples included in Box 5.1 show that these approaches may be used in combination, often as part of a wider communication strategy.
Box 5.1. Country examples: Assistance in the use of digital tools and services
In Finland, six months before the tax administration launched the MyTax e-portal as part of a wider reform, it created a specific campaign site on its website, which briefly described the coming changes and introduced the new portal. In addition, the tax administration provided all Finnish households with a leaflet in three languages (3.2 million copies) which described the changes and introduced MyTax on the cover. Furthermore, the Finnish Tax Administration ran a short radio campaign advertising the new portal. According to follow-up surveys, the ads reached about 70% of the adult population. Finally, the administration prepared visual marketing material to promote MyTax: posters to hang in the tax offices and pictures that were used on social media.
When MyTax was released, the Finnish Tax Administration prepared YouTube videos and instruction manuals explaining how to use the new tool. In addition, the administration created an imaginary Family (Family Korhonen) with different tax profiles and issues. The family had its own website and Facebook page, where it shared questions and thoughts about MyTax and the tax reform.
Finally, the Finnish Tax Administration organised several live events for different stakeholder groups and journalists, and held several online webinars, including an open chat for questions about the reform changes and MyTax.
In Indonesia, the Directorate General of Taxes (DGT) has gradually switched to online services to replace manual reports and services; this includes, for example, the transition from manual tax filing to e-filing, manual tax invoices to e-invoices, manual tax payment slips to e-billing, as well as online TIN registration through e-registration and other services. To assist taxpayers in using these services, DGT makes video tutorials which are regularly updated to follow the development of services. These videos can be easily accessed by the public through DGT’s YouTube channel.
In addition, vertical units at DGT also organise tax classes, choosing themes according to the needs of the work unit. Themes that are commonly raised include filling out tax returns through e-filing and using e-invoices. The choice of themes, resource persons, and tax class schedules is left to each vertical unit. Since the start of the Covid-19 pandemic, tax class activities that were previously held face to face have been shifted to online tax classes. Vertical units can publicise the tax class schedule through the administration’s webpage and its social media accounts.
In Italy, since 2015 Italian citizens can access their pre-filled tax returns and send them online in a few steps. To promote the new service and assist taxpayers in its use, the Italian Revenue Agency:
launched a communication and information campaign using TV and radio commercials and publishing advertisements in newspapers and magazines;
developed a dedicated website, including a frequently asked questions (FAQ) section, guiding taxpayers through the new service; and
prepared YouTube videos to tutor taxpayers in the use of the service.
The number of citizens using this service has increased significantly over the past years, as can be seen in Table 5.4.
Table 5.4. Italy – Evolution of pre-filled, online tax returns
Source: Italian Revenue Agency, 2021.
In Singapore, the tax administration used a chatbot in a novel way to guide taxpayers in filing their tax returns. The Inland Revenue Authority of Singapore (IRAS) implemented a filing chatbot that uses the natural language of taxpayers to walk them through their filing obligations. In partnership with the Government Technology Agency (Govtech), IRAS developed the filing chatbot to help taxi and private-hire car drivers file their income tax easily through conversational-style filing. The chatbot leverages artificial intelligence technology and natural language processing to understand user inputs and provide intuitive, humanised responses. This enables the provision of seamless, personalised digital taxpayer experiences.
The filing chatbot is the first-ever experiment with simplifying statutory tax return submission or e-filing processes through a personalised, simple-to-understand conversational-style interface with taxpayers, mirroring conversational dialogues with tax officers during the tax filing process. Among the taxpayers surveyed, 70% found chatbot filing more intuitive and spent 60% less time filing their income tax returns. The use of familiar terms also helped the less tax-savvy taxpayers understand filing requirements and reduced their need to seek assistance from IRAS officers.
For Year of Assessment 2021, IRAS has extended the filing chatbot experiment to include hawkers, benefiting approximately 10 000 taxpayers. IRAS is also building more transactional bot services and broadening its information database with a conversational approach.
On 1 January 2020, IRAS implemented the Overseas Vendor Registration (OVR) regime to levy a goods and services tax (GST) on digital services imported by non-GST-registered persons in Singapore. As part of the outreach to overseas vendors and electronic marketplaces, IRAS published a video on its website to educate businesses on the rules of the regime. The video enabled IRAS to reach out to overseas businesses that were unable to attend their seminars in Singapore. The outreach was effective in terms of the number of registrations by digital service providers.
In the United Kingdom, from April 2019 on value added tax (VAT) registered businesses were required to keep their business records digitally and submit their VAT returns directly from their record-keeping software, using the Making Tax Digital service.
The aims of this new requirement were to reduce both errors in tax returns and the administrative burden on businesses. As part of the process, Her Majesty’s Revenue and Customs (HMRC) produced guidance and YouTube videos, and wrote to every mandated taxpayer with information on what they needed to do. Work with software developers was a key part of the introduction of the new requirement, as they not only provide the software taxpayers need to comply with the new rules, but also offer training on how to use their products, as well as raising awareness through their marketing campaigns. HMRC also worked with tax agents and accountants, who also provide training and in addition advise taxpayers on what they need to do to comply with the new rules.
Sources: OECD Survey on Taxpayer Education Initiatives, Indonesia Directorate General of Taxes, and Inland Revenue Authority of Singapore.
5.1.3. Challenges in assisting taxpayers in the use of new digital tools and services
Lack of digital culture
A large part of the taxpayer population may already be accustomed to using digital tools and services as part of their daily life. Those taxpayers may be able and willing to adopt new digital service offerings made by the tax administration. However, other taxpayers may be more difficult to reach or more digitally challenged; for them special approaches may need to be considered.
Solution 1 – Phased approaches and hands-on experience
For taxpayers who fear using digital services, the administration could consider using phased approaches whereby taxpayers are allowed to choose different contact channels for a period of time, at the same time working to convince hesitant taxpayers to use the new service through hands-on assistance. During this period, the tax administration could also apply a digital-first response strategy, i.e., using the new tools and services to reply to taxpayer inquiries. This would give taxpayers time to understand better the new tools and get accustomed to them. For example, when the Irish tax administration launched its taxpayer online portal “myAccount” in 2016, it prioritised the processing of online submissions and highlighted the benefits of faster service to the taxpayers. It also set-up myAccount promotion teams in all tax administration public offices. These teams promoted myAccount to customers as soon as they entered the office, assisting in the registration process and demonstrating the various services available within myAccount.
Solution 2 – Offer other ways to communicate
For taxpayers who are unable to use new digital tools and services, the tax administration could consider: (i) continuing existing services on an exceptional basis; (ii) offering tailored or specialised services; or (iii) working with other partners to support this taxpayer population. In the United Kingdom, for example, HMRC operates a service through which a person can call the administration on someone else’s behalf if that person cannot go online. The helper and the person being helped must be in the same room and HMRC confirms their identity and verifies that the person being helped is happy with the arrangement (UK Government, 2021[5]).
Solution 3 – Overcoming the language barrier
For taxpayers who are not fluent in the official languages, the tax administration could consider offering telephone services, tools or guidance materials in languages other than the official languages in the jurisdiction. For example, the Norwegian Tax Administration (NTA) has created internal guidelines for using English and other foreign languages when communicating with taxpayers and has hired two language managers for implementing those guidelines. Basically, all verbal and written inquires directed to the NTA in English are now answered in English. Most of the written information that the NTA provides online or sends out to taxpayers is available in English. In addition, forms and general information that is essential for first-time registration in Norway is made available in languages that are selected according to taxpayers’ demographic situation. Table 5.5 shows that many other administrations are already providing services and material in non-official languages.
Table 5.5. Telephone services and material provided by tax administrations in non-official languages, 2017
Number of administrations that provide the service or material
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and other Advanced and Emerging Economies, https://doi.org/10.1787/74d162b6-en, Annex A – Data tables, Table A.116.
5.2. Assisting taxpayers in complying with their obligations and receiving the benefits and credits they are entitled to
5.2.1. Assisting taxpayers in complying and receiving entitlements
As mentioned above, many administrations are developing digital tools and services that make tax compliance easier and reduce burdens for a significant segment of the taxpayer population, particularly those that have grown up in the digital era. At the same time, not all tax obligation issues can be addressed through the introduction of new digital tools and services. Taxpayers may have questions regarding their obligations, particularly new obligations; may be unsure about how to comply and how to file a return; or may be uncertain about the benefits and credits they may be entitled to receive. In addition, because a part of the population may feel left behind by the move to digital, it is important for tax administrations, in their role of servicing all citizens, to be aware of those that are digitally disadvantaged.
Personalised support may help in addressing these issues and several administrations indicated, for example, that they are providing free tax services for lower-income individuals and newly created businesses (OECD, 2019, p. 36[4]). For taxpayers with disabilities, the vast majority of tax administrations report having in place special provisions, as shown in Annex A, Table A.116 of the 2019 edition of the TAS (OECD, 2019[4]). When considering introducing initiatives to assist taxpayers, tax administrations need to consider who receives assistance, who provides assistance and where is it provided.
5.2.2. Who receives the assistance?
Taxpayers who may benefit the most from direct personal assistance are those that have the lowest knowledge of the tax system and related compliance procedures (filing and payment), as well as those who cannot profit from new digital tools and services. These include:
taxpayers who are new to the domestic tax system, such as newly created businesses, recent immigrants (some of whom may also not be fluent in the official languages), first-time income-taxpayers, etc.;
taxpayers who are vulnerable, such as taxpayers facing difficult personal circumstances, financial hardship, low income, or those digitally disadvantaged;
taxpayers who live in rural areas where there is little or no access to the tax administration.
Many tax administrations have introduced specific initiatives to assist these taxpayer groups. For example, the South African Revenue Service (SARS) has mobile tax units (MTUs) through which it can reach taxpayers in rural areas where there is no organisational presence. The first MTU was launched in 2009, following which three additional MTUs were set up in 2011. The initiative became so successful that there are now 23 MTUs operating in South Africa. Internal research by SARS showed that the majority of taxpayers used MTUs to submit their returns, but a number of individuals also use the MTU service to request tax numbers and register for tax. Similarly, the Georgia Revenue Service operates mobile revenue service centres through which taxpayers can receive services in regions where there are no offices, including the high mountain regions (Georgia Revenue Service, 2019[6]) and the Rwanda Revenue Authority (RRA) launched the RRA IWACU Initiative which aims at bringing RRA Services closer to the public through means of a mobile tax unit.
Figure 5.2. SARS Mobile Tax Unit
Source: South African Revenue Service (2021).
South Africa also makes special provisions for deaf taxpayers by having selected SARS education and outreach teams trained to provide sign language tax compliance assistance. And the United States Internal Revenue Service (IRS) runs the Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programmes, which offer free tax help to low-to-moderate-income taxpayers, senior citizens, persons with disabilities and taxpayers with limited English-language proficiency who need assistance in preparing their tax returns (United States Internal Revenue Service, 2021[7]).
Other administrations assist vulnerable taxpayers whose personal circumstances make managing their tax affairs difficult. The Australian Taxation Office (ATO), for example, introduced the Dispute Assist service, which provides vulnerable taxpayers with access to experienced ATO officers (guides) to support them through the dispute process (Box 5.2). Similarly, the Tanzania Revenue Authority introduced a Tax Consultancy Bureau, which provides assistance to taxpayers with grievances who cannot afford to pay tax advisors and also provides assistance in the use of online services. More of such bureaus will be rolled out across the country for the same purpose.
Box 5.2. Australia: Assisting vulnerable taxpayers during disputes
In Australia, Dispute Assist provides a holistic approach to managing disputes in the context of taxation administration. The service seeks to enhance the taxpayer experience by giving vulnerable taxpayers access to experienced ATO officers (guides) who help them through the dispute process. It has a particular focus on individuals and small businesses that do not have access to formal representation, such as tax agents or legal representatives. The ATO guides have technical tax experience and undergo an internal training course before they commence in the role. Guides do not give advice or make decisions. They are not counsellors. Their role is to: (i) connect the taxpayer with the right people to resolve the dispute as early as possible; (ii) support the taxpayer in exploring all options; (iii) ensure that all dispute resolution processes undertaken are transparent and fair; and (iv) adopt a holistic approach in resolving all matters. Dispute Assist is the first pro bono service to be offered by an Australian Government revenue or regulatory agency to its clients using its own officers. Approximately 100 officers supported 150 taxpayers in the first 12 months. The ATO also actively supports and engages with other community organisations and private sector pro bono services to assist them in meeting the needs of vulnerable taxpayers.
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and Other Advanced and Emerging Economies, https://dx.doi.org/10.1787/74d162b6-en, p. 215.
Continuous taxpayer education is required to promote the use and adoption of online services, as there are always new business entrants, as well as to reinforce the use of the online system by current users.
Ms. Meris Haughton, Chief Corporate Communications Officer, Tax Administration, Jamaica
Micro and small businesses, particularly those that are newly created or do not have sufficient funds for expert advice, may also benefit from in-person assistance. While research suggests that the level of tax literacy of small business owners is strong on average, it does highlight that tax law changes have an adverse effect on small business owners’ perception of the way the system applies to their businesses, and that outdated tax-law knowledge could result in unintentional non-compliance (Freudenberg et al., 2017[8]). Direct support to this important taxpayer segment can include assistance in the completion of tax returns and other relevant tax documents, helping familiarise business owners with tax rules as well as digital tools and services, and assisting them in resolving tax disputes. The Swedish Tax Agency, for example, conducts face-to-face seminars and workshops for owners of newly started business to help them understand their tax-related rights, responsibilities and obligations. The Inland Revenue Board of Malaysia has a dedicated tax advisory and consultation team known as Business Support Units (BSUs) for SMEs. The BSUs are located in all 39 branches nationwide and conduct briefings in small groups of 15 people; support is also available online. The approach taken by the Tax Administration Jamaica (TAJ) is described in Box 5.3.
Box 5.3. Jamaica: Return filing assistance for micro and small businesses
In Jamaica, TAJ runs an annual Special Taxpayer Assistance Programme (STAP) to assist micro and small businesses in completing their income tax returns, with a special focus on online filing. The initiative is carried out during the six to eight weeks preceding the March 15 income tax filing deadline. Forty FTEs serve approximately 4 000 taxpayers annually. In addition to the regular operating budget of the administration, the cost of the programme is estimated at JMD 1 000 000. STAP is offered at tax offices and advertised locations external to TAJ. The programme is customised and direct emails are sent to businesses and professional associations to promote participation. Assistance is provided via one-on-one engagement or group workshops.
Customised sessions are also accommodated through business-related associations for their members. In these cases, the associations host the sessions and TAJ provides the technical and educational support. During previous years, participating organisations included the Jamaica Business Development Corporation, the Young Entrepreneurs Association of Jamaica, the Realtors Association of Jamaica and the Jamaica Chamber of Commerce.
The annual evaluation of the programme found that with support, the targeted taxpayer segments were more likely to comply with their obligations. The initiative also allows for the identification of taxpayer education gaps. In 2021, STAP was remodelled to provide online tutorials, primarily for SMEs.
Source: OECD Survey on Taxpayer Education Initiatives.
5.2.3. Who provides the assistance?
When it comes to providers of assistance, there are two possible options: (i) tax officials of the tax administration; or (ii) non-officials. By providing assistance through their own officials, tax administrations remain in control of the type and form of assistance provided and of how things are explained to the receiving party. Furthermore, this allows tax officials to gather direct insights on system pressure points, an advantage that may help in developing new educational programmes or tools and services for taxpayers to further improve compliance and reduce burdens. The use of mobile units to visit taxpayers, as mentioned above, is one example of how tax officials can provide direct assistance.
Tax administrations can also collaborate with civil society organisations or business associations to assist taxpayers in need. While this may require providing appropriate training to the members of such organisations and associations, it has the advantage of reaching specific taxpayer groups with targeted assistance. In addition, tax administrations can partner with universities to provide tax assistance to teachers and students receiving specialised training, or with other volunteers. In any of these cases, the tax administration should consider implementing feedback mechanisms to better understand the issues taxpayers are facing.
An example of a tax administration co-operating with universities would be the Accounting and Tax Support Centres (NAF, or Núcleos de Apoyo Contable y Fiscal) now operating in 14 Latin American countries. In this approach, university students are trained through preparatory classes and seminars by officials of the tax administration before assisting lower-middle-income taxpayers. More information on NAFs is included in Chapter 7, Box 7.2.
Several administrations have implemented similar volunteer programmes, where individuals or organisations sign up and, following official training, guide and assist taxpayers with their obligations. For example, in the United States the IRS operates the VITA and TCE programmes where IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals (United States Internal Revenue Service, 2021[7]). In Australia, the ATO runs the Tax Help volunteer programme for low-income taxpayers (Australian Taxation Office, 2021[9]).3 A similar programme operated by the Canada Revenue Agency is described in Box 5.4 below.
Box 5.4. Country examples: Volunteer programmes
Canada: The Community Volunteer Income Tax Program
In Canada, since 1971 the CRA operates a Community Volunteer Income Tax Program (CVITP), a collaboration between community organisations and the CRA. Its aim is to make sure that vulnerable individuals complete their personal income tax returns to gain access to, and continue to receive, the government credits and benefits for which they are eligible. Community organisations throughout Canada operate on a volunteer basis to host tax preparation clinics and prepare income tax and benefit returns for eligible individuals within their community with modest income and a simple tax situation. The CRA offers training to the volunteers as well as a dedicated toll-free telephone line to provide support for them throughout the year. The CVITP is promoted in three main ways:
In person: Through the CRA’s Outreach Program, organisations that serve vulnerable segments can schedule in-person visits from outreach officers who will answer tax and benefits questions and promote the CVITP. These visits are conducted year-round (not just during tax filing season) and allow the CRA to reach vulnerable segments of the population – including those in remote communities – who may be eligible for help through the CVITP.
Digitally: Key information about the CVITP is available on the Government of Canada website (Canada.ca/taxes-help) and is promoted regularly using the CRA’s social media platforms, online articles, short videos and more.1 From the Canada.ca/taxes-help page, individuals are able to learn about the CVITP, determine whether they are eligible, and find a CVITP tax clinic in their community.
Traditional means: The CRA uses various print products to raise awareness of the CVITP. These include banners, promotional “postcards”, posters, factsheets and more. Several of these resources are available in languages other than English and French, Canada’s two official languages.
Additionally, the CRA conducts proactive media outreach through its employees in the regions, engaging local media to promote the CVITP.
Togo: The peer education project
To make the relationship between the tax administration and economic operators more dynamic, in 2019 the Togolese Revenue Office (OTR) initiated a peer education project on tax citizenship. The objective of the project is knowledge sharing and awareness raising.
The process involves trained individuals (peer educators) who transfer knowledge to their peers on specific themes. Sessions can be set up in small groups or through individual contact, informally or in a more organised fashion.
Becoming a peer educator is voluntary and the educators are also economic operators. Following a selection process carried out by the different operational divisions within the OTR, the peer educators benefit from specific training that covers:
the concept of peer education
corporate taxation
good communication as peer educators
the activities of peer educators (individual interviews, group interviews, general awareness raising, references of unresolved cases to the OTR).
The activities of the peer educators are monitored by OTR officials daily through a messaging platform. Educators post photos or videos of their activities on the platform, making the exchange of experiences instant and national. Peer educators can also use the platform to ask questions of OTR officials and their answers benefit the whole group.
In the first year, 273 peers were trained through this initiative. The project is now expected to expand digitally and geographically.
Source: OECD Survey on Taxpayer Education Initiatives.
1. Examples of CVITP testimonial videos can be found here: www.youtube.com/watch?v=V91NSVevH1o and www.youtube.com/watch?v=DkwX1JHG7iQ (both videos accessed on 21 September 2021).
5.2.4. Where assistance is provided
There are several possible venues for providing assistance: in the tax administration’s offices, at the taxpayer’s home or business premises, in partner institutions such as schools and universities, or at other government offices. From a taxpayer perspective, direct visits at home or at the business premises may be the most comfortable and probably preferable, particularly for those whose personal circumstances make it difficult to visit tax offices or those that live in rural areas with no access to tax offices. This also allows officials to demonstrate new digital services and explain their application to taxpayers while they use their own personal devices, something which may help taxpayers to become more independent and to comply with their tax obligations in the future. While more costly for the administration, in-person visits may have a positive impact on taxpayer satisfaction and, thus, on the general view of the tax administration. To make it easier for taxpayers to access support, some administrations also provide assistance in public areas. For example, in Indonesia the tax administration has opened Tax Corners in public activity areas such as shopping centres and banks.
Box 5.5 describes how the CRA expands its services for small businesses by offering in-person visits from a tax official.
Box 5.5. Canada: Visits to small businesses
In Canada, the Canada Revenue Agency (CRA) continues its transformation toward a culture of service to ensure that the CRA is fairer, more helpful, and client-focussed.
One example is the CRA’s Liaison Officer (LO) service.1 This service is designed to help small businesses and self-employed individuals by providing free, personalised support, including information and guidance about tax obligations and responsibilities. The objective is to reduce the compliance burden by making it easier for the individuals to comply, thereby avoiding costly intervention in the future. The LO service has been successful in supporting this population in their interactions with the CRA, promoting and ensuring voluntary compliance from the start. Since the launch of the programme in 2014, more than 57 000 small businesses and self-employed individuals have benefited from this service.
Traditionally, the LO service was offered through in-person, one-on-one visits and group seminars at a time and place that was convenient for the client. Now, the CRA is taking an innovative approach to the new work environment by offering the LO service virtually through telephone and secure videoconference platforms. This approach aims to remove geographical barriers; increase flexibility, accessibility and convenience; and provide better service while ensuring that clients’ safety and privacy are respected. The service is voluntary and is readily available by request from any small business or self-employed individual in Canada.
1. ...A video explaining the CRA’s Liaison Officer service can be found here: https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/liaison-officer-initiative-loi.html (accessed on 21 September 2021).
Source: OECD (2021), Tax Administration 2021: Comparative Information on OECD and Other Advanced and Emerging Economies, https://doi.org/10.1787/cef472b9-en, p. 92.
Direct assistance from tax officials does not necessarily require that the officials go to the taxpayer. The tax administration can also provide remote assistance, for example via phone calls. In this respect, an interesting example is the approach taken by Canada where the administration uses data at hand to identify individuals who may be eligible for benefits or who are at risk of having benefits cut off, contacting them via the postal service and telephone (Box 5.6).
Box 5.6. Canada: Contacting taxpayers eligible for benefits
In Canada, the CRA uses business intelligence and data analytics to identify and send letters to those who typically do not file income tax returns and may be eligible for benefits. As a result of letter mail-outs in 2017, a total of 37 934 returns were filed resulting in over CAD 6.98 million in tax refund payments and CAD 32.4 million in credits or benefits paid. The CRA has also launched a Call Me First initiative, in which the CRA proactively calls individuals at risk of having benefits cut off because the CRA lacks relevant information. While still in its early stages, the CRA has so far reached out to approximately 8 000 benefit recipients. Feedback indicates that benefit recipients appreciate receiving personalised assistance and being provided with additional time to respond, if needed.
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and Other Advanced and Emerging Economies, https://dx.doi.org/10.1787/74d162b6-en, p. 68.
Assistance can also be provided through partner institutions, such as universities, schools or organisations that operate tax clinics. Tax clinics may operate on a walk-in basis but may also provide remote services, such as via telephone. They can provide a broad number of tax-related services, including assistance in return filing and with tax disputes. Individuals providing assistance in tax clinics must be properly educated on tax matters. Many tax administrations and governments support national tax clinic programmes via direct funding, and training and certification of individuals. For example, in Australia, the government funds a National Tax Clinic programme which is available to eligible individuals, small businesses, not-for-profit organisations and charities. While the programme is run by universities, the tax administration supports it (Australian Taxation Office, 2021[10]).
5.2.5. Challenges in assisting taxpayers with compliance and entitlements
Availability of resources
A key challenge in providing direct assistance to taxpayers is that of resources. Unless the tax administration operates its own programme with dedicated tax officials, it may be difficult to find officials who are willing to assist taxpayers in fulfilling their tax obligations outside working hours.
Solution 1 - Partnerships
This issue can be addressed to some extent by working with and supporting volunteer groups or by partnering with associations, schools and universities. These partners may be of great help, and they sometimes already are in contact with the group of taxpayers needing help. The NAF initiatives, the IRS’ VITA/TCE programmes and the Australian National Tax Clinic programme, all mentioned above, are examples where tax administrations support or partner with volunteers or universities to assist taxpayers. Another example is the approach taken by the Chilean tax administration (Box 5.7).
Box 5.7. Chile: Partnering with business associations
In Chile, the Servicio de Impuestos Internos (SII) has adopted a strategy to promote the timely fulfilment of tax obligations with the help and support of several business associations. Through Collaboration Agreements with relevant associations, the idea is to undertake collaborative work to develop prevention strategies, training activities or direct assistance, considering the tax gaps and risks of non-compliance in each sector or segment. This initiative also enables associations to have direct communication with the SII, to request specific training and support, to seek answers to common taxation problems, to help in the detection of non-compliance, and to propose collaborative solutions. The first Collaboration Agreement was signed in January 2017; 31 agreements are now in force with more than 180 joint activities undertaken.
Source: OECD (2019), Tax Administration 2019: Comparative Information on OECD and Other Advanced and Emerging Economies, https://dx.doi.org/10.1787/74d162b6-en, p. 36.
Providing training
Working with non-tax officials raises, however, another important issue: providing tax training to volunteers and other individuals involved in providing assistance in more complex cases. This is key for ensuring that the advice given adheres to the law and applicable guidelines.
Solution 1 – Providing training courses and certification programmes
To ensure that volunteers or other helpers are properly trained and educated on tax issues as well as the services and tools offered, tax administrations may consider providing training courses and certification programmes. Volunteers participating in such programmes will not only help other people and learn a lot, but they will also gain skills that they will be able to certify in the future thanks to the certificate they have received. This is an efficient way to ensure volunteers have the proper knowledge and skills and to motivate them to get involved. For example, as mentioned above in Australia, Tax Help volunteers guide and encourage citizens to prepare and file their own tax returns. To ensure that these volunteers have the required knowledge, the ATO trains them in the necessary tools and services, such as the online tax portal (Australian Taxation Office, 2021[9]).
Similarly, volunteers in the IRS’ VITA/TCE programmes, who provide free tax return preparation for eligible taxpayers, must follow a training course and pass the certification test (United States Internal Revenue Service, 2021[7]).
Promoting the availability of assistance programmes
Finally, tax administrations need to consider how to promote the availability of assistance programmes. Obtaining taxpayers’ attention and ensuring their participation in assistance programmes is important for the success of these initiatives, taxpayer satisfaction and the overall tax compliance environment.
Solution 1 – Promoting the initiatives
In this respect, it may be helpful to involve other government bodies in promoting initiatives. For example, the Chilean tax administration works with municipalities to directly contact businesses and refer them to the assistance initiatives. In Australia, the Tax Help centres are located in a range of community venues, such as libraries, community centres, and multicultural and other community organisations (Australian Taxation Office, 2021[9]).
References
[9] Australian Taxation Office (2021), Become a Tax Help volunteer or open a Tax Help centre, http://www.ato.gov.au/Individuals/Your-tax-return/Help-and-support-to-lodge-your-tax-return/Become-a-Tax-Help-volunteer-or-open-a-centre/ (accessed on 20 July 2021).
[10] Australian Taxation Office (2021), “National Tax Clinic program”, https://www.ato.gov.au/General/Gen/National-Tax-Clinic-program/ (accessed on 21 September 2021).
[8] Freudenberg, B. et al. (2017), “Tax Literacy of Australian Small Businesses”, Vol. 18/2, pp. 21-61, https://ssrn.com/abstract=3090125.
[6] Georgia Revenue Service (2019), 2018 Annual Report of the Revenue Service of the Ministry of Finance of Georgia, http://www.rs.ge/RsGe.Module/GetDoc/Get_File?doc_id=10602 (accessed on 20 July 2021).
[1] HM Revenue and Customs (2021), Measuring tax gaps 2021 edition - tax gap estimates for 2019 to 2020.
[4] OECD (2019), Tax Administration 2019: Comparative Information on OECD and other Advanced and Emerging Economies, OECD Publishing, Paris, https://dx.doi.org/10.1787/74d162b6-en.
[3] OECD (2019), Tax Compliance Burden Maturity Model, http://www.oecd.org/tax/forum-on-tax-administration/publications-and-products/tax-compliance-burden-maturity-model.htm.
[2] OECD (forthcoming), Tax Administration 2021: Comparative Information on OECD and other Advanced and Emerging Economies, OECD Publishing, Paris.
[5] UK Government (2021), Help frieds or family with their tax, https://www.gov.uk/help-friends-family-tax (accessed on 20 July 2021).
[7] United States Internal Revenue Service (2021), IRS Tax Volunteers, http://www.irs.gov/individuals/irs-tax-volunteers (accessed on 20 July 2021).
Notes
← 1. The United Kingdom’s 2021 tax-gap publication estimates that errors account for around 10% of the tax gap.
← 2. Box 5.4 of TAS 2021 contains more details on chatbots put in place by eight tax administrations. Annex 5.A of the same publication contains a number of links to presentations on those virtual assistants.
← 3. A video presenting the ATO’s Tax Help programme is available on the Tax Help webpage: https://www.ato.gov.au/Individuals/Your-tax-return/Help-and-support-to-lodge-your-tax-return/tax-help-program/ (accessed on 21 September 2021).