Tax Administration 2024

Executive summary

Tax Administration 2024 is the twelfth edition of the OECD’s comparative information series on tax administration. Containing a wealth of data and other information, it is intended to be used by tax administration analysts allowing them to understand the design and administration of tax systems in other jurisdictions and to draw cross-border comparisons. While primarily aimed at analysts, it can also be a useful tool for senior tax administration managers or officials in ministries of finance when considering changes in tax system administration.

Using the data from the International Survey on Revenue Administration (ISORA), the 2024 edition of the Tax Administration Series (TAS) takes a closer look at national-level tax administrations in 58 jurisdictions, including performance-related data, ratios and trends up to the end of the 2022 fiscal year.

Broad tax administration developments continue to evolve

Past editions of the TAS have commented on the impact of a constantly changing environment on tax administration. These changes, driven by both internal as well as external factors such as the digitalisation of the wider economy, technological advancements, and the COVID-19 pandemic, are the key reasons behind tax administrations adapting their operating models. Some of these changes can take many years to implement, and the incremental progress that has been reflected in the previous editions of the TAS continues to be observed in this 2024 edition.

Tax administrations have increased and maintained their efficiency and effectiveness, in particular by looking at the opportunities to take more proactive approaches to influencing taxpayer compliance. This has frequently been driven by the increased use of technology and in response to the evolving expectations and needs of taxpayers. For example, tax administrations were rapid adopters of e‑administration, enabling the online filing of tax returns as well as online payments and the full or partial prefilling of tax returns. This is evident when looking at the evolution of e-filing rates, which have increased significantly – between 17 and 23 percentage points – across the three main tax types since 2014, while e-payment rates have increased around 10 percentage points since 2018 and are now at about 90%.

Similarly, tax administrations have employed technological innovations for years now, and the number of administrations that are using virtual assistants, artificial intelligence and application programming interfaces continues to increase. For example, among those administrations covered by this publication, the uptake in the use of virtual assistants and artificial intelligence has almost doubled since 2018.

Tax Administration 2024 provides new insights and perspectives

While TAS 2024 illustrates that the broad tax administration developments continue to evolve, it also provides some unique insights into tax administration processes that have not been examined in such detail since the publication of the eighth edition in 2019.

This is due to the results of the 2023 ISORA survey which has proven to be a treasure of tax administration data as it was the most comprehensive international survey on tax administration since 2018. The survey results enable users to take a closer look at tax administration operations, processes and arrangements covering not only the regular annual performance data but also information as to how tax administrations:

• Are setup and the governance arrangements put in place: Tax administrations are subject to a range of checks and balances to ensure transparency in their operations and proper accountability for their overall management of the tax system. With the new data included in TAS 2024 it becomes apparent that tax administrations are subject to robust oversight and control, and they also prepare a significant number of strategic and operational documents. There may, though, be room for more transparency which may help further enhancing community confidence and trust in tax administration as not all of the administrations that prepare the strategic and operational documents also make them available to the public.

• Identify and meet taxpayer service preferences: Taxpayer contact volumes are very large scale. Tax administrations reported more than 3.5 billion incoming contacts via online taxpayer accounts, and there are more than 300 million incoming telephone contacts in addition to tens of millions of in-person visits, letters and emails. Meeting taxpayer preferences regarding contact and service channels is therefore an important aspect of tax administration work. TAS 2024 provides valuable insights into how they approach this issue by looking at the use of taxpayer satisfaction surveys, the existence of service delivery standards, the type of online services provided, as well as the availability of educational and business support initiatives.

• Manage compliance risk: Assessing the accuracy and completeness of taxpayer reported information is critical in ensuring the integrity of the tax system. While this often happens through audits, there is an increasing use of automated electronic checks, validations and cross-matching of taxpayer information. Tax administrations are also adapting their approaches to compliance risk management with increased availability of data and the use of new data science techniques. TAS 2024 examines in detail how tax administrations are organising their processes in this area. It does so by looking at tax administrations’ approaches towards understanding and managing compliance risks, and some of the steps taken by administrations as regards preventing and addressing non-compliance.

• Approach debt collection: The total amount of outstanding arrears at the end of fiscal year 2022 is large, in the region of EUR 2.7 trillion, and around EUR 810 billion are considered collectable. It is therefore important that the legislative framework includes provisions that enable tax officials to undertake certain actions as regards the management of debt, the collection of amounts overdue and the enforcement of actions that can be taken against delinquent debtors. TAS 2024 utilizes the new ISORA data to examine the debt collection powers and their use by tax administrations.

• Utilize dispute prevention tools: Dispute prevention and resolution are essential to help preserve trust in the tax system. As disputes can be resource intensive, many administrations are looking at strategies to prevent them. While this may include the provision of guidance and advice to taxpayers, TAS 2024 shows that many administrations offer specific dispute prevention mechanisms, including the provision of public and private rulings, the use of Advance Pricing Arrangements, and the use of co‑operative compliance programmes.

• Manage their workforce: Effective people management in tax administration involves comprehensive recruitment, training, and retention strategies. By investing in continuous professional development, tax administrations can keep their staff informed of the latest laws, technologies, and working practices and methods. Moreover, a focus on employee well-being and engagement can lead to higher job satisfaction, lower attrition rates, and a more dedicated workforce. Exploring the wealth of data from the 2023 ISORA survey, TAS 2024 takes a detailed look at all those areas that can help cultivate a positive organisational culture that values integrity, accountability, and excellence, all of which are crucial for a well-functioning tax system.

Tax gap estimations

Finally, this edition of the TAS contains a special feature which looks at tax gap estimations. Over the past few years, an increasing number of jurisdictions have started analysing tax gaps as findings of these estimates can provide insights on the size and nature of non-compliance, emerging trends, and the general health of the tax system. Acknowledging that tax gap estimations are complex, the special feature provides an overview of key tax gap concepts and examples of international experiences in tax gap research.