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More than 20% increase in tax revenues without increasing tax rates.
The successful implementation of the technology by the state will lead to:
Understanding ("knowledge") of the user allows you to improve interaction with taxpayers.The tax authorities cannot fully understand the needs of taxpayers and create a product at their discretion. This can lead to a number of inconveniences and become the basis for rejection and rejection of decisions proposed by the tax authorities. To minimise this risk, it is necessary to conduct surveys and receive direct feedback from taxpayers — the main consumers of tax administration products and services.Opportunities to use Big Data for creating “smart-map” of socially important goods and services, price control.
The tax authorities have many potential partners who can provide them with significant assistance. Banks, digital platforms, online service aggregators and other IT companies can create solutions and serve taxpayers. These interactions pave the way for the transformation of a closed tax system into an open digital platform and ecosystem, of course, with reliable protection of taxpayers' data.
The tax authorities are able to receive very accurate factual data. This makes it possible to develop a strategy to identify long-term goals and develop a systematic action plan to achieve them. Obviously, the main goal of the tax authorities is effective tax administration and collection of taxes to the state budget. However, it is extremely important to analyse the tax gap across all tax categories in order to assess the full tax potential of the country.
New methods of monitoring compliance with tax legislation. Preventive control methods (Partner method, Industry method, “The all-seeing eye of the authority”).
Financial transparency
Elimination of the unaccounted money supply of shadow economy
Elimination of the opportunities for corruption
Reputational growth by international organisations (OECD, FATF) and boost in global transparency and digitalisation ratings
Opportunities for the shadow economy
Prerequisites for corruption
Paper based tax administration
Low tax collection of the state budget
Online Electronic Cash Registers (OECRs). Electronic online cash registers (OECR) with a built-in fiscal data recording technology, which limits the seller's ability to manipulate sales data or not specify them in the tax return. This technology guarantees the safety of sales data and the protection of information from unauthorised access.
Reduction of the cost of fiscalisation. In order to reduce the cost of the fiscalisation system for the taxpayer, it is reasonable to use the devices that he already has. For example, cell phones or desktop computers can work as fiscal equipment instead of using specialised devices. It is also possible to use integrated devices with terminals that accept payment cards, which reduces the overall costs of taxpayers. Using virtual or cloud-based cash registers also reduces costs.
Reduction of the taxpayer's costs for entering primary accounting documents into accounting systems.
Simplicity. The taxpayer no longer needs to re-submit information about his income to the tax authorities. He can register it in a mobile application or in partner’s applications of banks, online platforms and aggregators. The tax authorities will independently calculate the amount of tax to be paid based on the taxpayers' data and reflect this information in the application.
Technical support. The creation of a modern taxpayer technical support service allows you to quickly and timely solve problems with tax and third-party applications.
Competition in the direct services market, which leads to better and cheaper services for customers.
Reduction of the cost of printing, mailing and returning documents from the buyer, as well as making corrections.
Automatisation of data transmission to tax authorities and elimination of unnecessary actions for taxpayers.
Creation of a market for new partnerships with the government for the implementation of actions, collaborations, simplified types of transactions, checks.
Process of comparing of data transmitted to the tax authority with internal reporting will be more efficient
Reduced number of field tax inspection
Online exchange of information with the tax authority
Digital tools for business management: easy control over business, small and medium
Direct marketing and targeted advertising
Opportunities to use Big Data for creating “smart" advertising, launching "smart” customer loyalty programs
Some FDO advantages detailed:
Electronic Online Cash Receipts. One of the biggest features and benefits of the FDO solution is the ability to generate and process online electronic cash register receipts which are transferred from the cash register of the taxpayer to the tax authority via the FDO server where it is validated and stored. Each and every receipt is validated and secured with the special software tools that allow the tax authority to accept the information within the receipt as valid and full. Also, the receipt is accessible to any party involved in the transaction: buyer (consumer), seller and the tax authority.
Electronic Tax Invoices. Electronic tax invoices and electronic refunds simplify the verification of transactions between counterparties by automatically matching the data of the seller and the buyer (consumer), while non-electronic document verification requires considerable time and resources. Switching to electronic document management also solves the problem of fraudulent invoices that try to claim personal expenses as a legitimate deduction or overstate them. It helps with the tax administration of VAT and handling the VAT gap sufficiently.
Online Electronic Cash Registers (OECRs). Electronic online cash registers with builtin fiscal data recording technology, dramatically limits the seller's ability to manipulate sales data and allows the taxpayer to report the exact data for tax returns. They guarantee the security of both sales data and the information that is stored in the system from unauthorised access.
Reducing the cost of fiscalisation. While implementing the FDO and its features it is important that the cost of implementation is acceptable to the taxpayer and the user so the technology is designed in a way that a significant part of users will be able to use the devices that he already has. For example, cell phones or desktop computers under certain circumstances can be used as cash register equipment instead of using specialised devices. It is also possible to use integrated devices with terminals or POS systems that accept banking card payment. Using virtual or cloud-based cash registers could as well significantly reduce the respective costs.
Fast and convenient validation of fiscal receipts and the ability to report violations to the tax authority in real time
Making a personal budget based on purchase history
Obtaining and storage of electronic fiscal receipts for confirmation of purchase
Prices on socially sensitive and important goods and services are under state supervision
Participation in special promotions for receipt checking
A public control system hat allows citizens to use a mobile application to check fiscal receipts and file a complaint if retailers do not issue a valid check. This application can also support integration and data exchange with popular e-commerce and financial platforms in the country, for example, to provide the consumer with cash refunds, discounts and other incentives in exchange for the exchange of receipt data.