The e-tax man cometh
- By William Matthews
- Aug 27, 2001
The filing of tax returns is one electronic transaction that many countries offer online.
Electronic tax filing offers governments a number of benefits:
* It saves money by eliminating printing and mailing.
* It can dramatically reduce errors by using intelligent data-entry software in conjunction with electronic forms.
* It increases tax worker productivity by reducing the need for government clerks to re-enter tax information multiple times.
France is at the head of the e-tax pack. In November 2000, the French government passed a law requiring medium and large companies to file taxes online beginning this summer.
Spain, too, has an advanced e-tax system that enables citizens to file tax documents and make payments electronically. Personalized authentication certificates are used to ensure the privacy of those online transactions.
Finland, Singapore and the United States also encourage citizens to pay taxes online. About 40 million U.S. taxpayers filed returns online last spring.
It isn't surprising that tax collection is the first electronic transaction governments make available online, said Connie Dean, government industry manager for Microsoft Corp. "It's one of the easiest ways to show return on investment. It's a great starting point — we actually recommend it."
Dean said Microsoft's theory is that successes at electronic tax collection will motivate governments to offer other transactions online.
As electronic tax collection systems mature, analysts at Forrester Research Inc. predict that governments will realize substantial savings. The cost of processing corporate taxes in France, for example, could be cut by 70 percent, according to Forrester.
Sometimes, however, social considerations outweigh economic benefits. In France, e-filing has eliminated the need for most of the government's25,000 tax clerks, Forrester reports. But legal requirements and political commitments preclude firing the unneeded workers.
In the United Kingdom, information needed for tax calculation continues to be held by different agencies in separate systems, and the inability to share that data has delayed electronic filing of some business taxes.
"Most of today's e-filing efforts by European governments fall short because they merely transpose the same old tax-filing process online," Forrester reports.