As economies increasingly digitalise, individuals and businesses are changing the way they work, how they buy and sell goods and services and how they store records and information. This creates greater expectations of tax administration and the way that they can support taxpayer compliance. Without changes to the way tax administration is done now, it is likely that burdens could increase as taxpayers have to move their digital records from their own systems to fit into the systems of the tax administration. This creates more opportunities for errors and potentially make it more difficult for tax administrations to collect the right amount of tax. This would lead over time to higher costs, lower productivity and potentially increase the opportunities for the dishonest few to evade their tax.
On the other hand, if tax administration is securely integrated into the tools and processes of the digitalising economy, including across borders, then it is likely to lead to significantly reduced burdens as well as helping ensure that the right amount of tax is paid.
