Tax Administration

Recent improvements in computer technology have allowed for increased efficiency in the realm of tax administration, enforcement and collections. Possible applications of information technology in the tax administration process include the inclusion of automated error detection in processing tax returns and the use of statistical techniques to enhance audit selection. This techniques can substantially enhance the efficiency of the tax administration process, reduce tax evasion and improve collections. However, many developing and transitional economies have not yet harnessed the power of these new technologies. In order to take maximum advantage of this tools, the tax administration process can often benefit from reform in several areas.

The International Studies Program at the Andrew Young School of Policy Studies has extensive experience assisting Ministries of Finance and Revenue Departments around the world to improve their tax administration, collection and enforcement efforts. Consistent with our philosophy, we work with the host government and the donor agency to identify the main shortcomings of the tax administration process, propose solutions, and assist in implementing the necessary reforms.

While development of the appropriate tax administration software is typically an important component of the reform process, tax administration reform has much wider implications which are often ignored. First, tax administration officials need to become familiar with the new technologies in order to use them most effectively. Second, the design of tax forms and protocols might have to be reconsidered in light of automated returns processing techniques. Finally, the computerization of certain parts of the tax administration process typically prompts a reallocation of the tax administration personnel in order to capture the maximum benefits of the reforms.