In the years 2020-2022 during the COVID pandemic, as businesses were struggling to survive, technology was sort as the only means. Every organisation- every form & size- moved to digitalise significant aspects of their business. While this was largely contingent, it exposed companies, investors, employers, employees, customers, and every other party in between to the benefits of technology. Moving forward, it is only reasonable that organisations will infuse technology within their strategic plan.
While businesses reap the technology benefits, the regulator who is the government faces a constant challenge; how to regulate amidst the radical transformations of the business-operations-environment.
Resultantly, the regulator has adapted regulation tools that can penetrate, and keep abreast with, the digitalised organisation. Tax digitalisation has helped the regulator revolutionise tax reporting. This could be beneficial to both the organisation and the regulator.
Tax technological innovations have allowed the regulator to build a tax administration system that is automated and high-quality information fed; unifying all tax communications in one single account. Thus increasing compliance and monitoring, and tax reporting.
The benefits are clear. For the government, the quality of fiscal data has improved, and businesses now can enjoy a lower tax compliance burden.
Limitations of tax digitalisation notwithstanding, now concerns arise. One of which is data privacy concerns. For example, most digitalisation now comes from the tax authorities, requiring businesses to adapt tax systems and technologies supporting the digitalised tax reporting regime. Recently, most governments have pushed for technologies that could facilitate real-time tax reporting. For most organisations, this kind of reporting feels like a “data grab” by the regulator. It is intrusive for most organisations. A bigger question even is whether the tax administrators have the controls to protect this significantly sensitive data………………
