ACCA Warns Against Risk In Digital Tax Collection Tools

The Association of Chartered Certified Accountants (ACCA), A global professional accounting body, has urged tax authorities to recognise the risks in implementing digital tax collection tools.

In a statement made available to Trendingaccounting, it stated that tax administrators had always looked to the latest technological developments to help in the task of effectively collecting taxes from the public.
The association noted that the current shift in the digitalisation of the global economy was an opportunity presented to national tax collectors to make a change in the efficiency of their processes.

It further said that just as the digital tools could benefit tax administrators, the development and implementation of technological innovation in the private sector was a constant race to improve performance.

In its newest report, "Technology tools and the future of tax administration", the ACCA urged tax administrators to manage the risk of imposing restrictive technological requirements on taxpayers as the extreme regulatory constraints could deprive businesses of the opportunity to exploit the most economically efficient technology, stifling competition and even growth.

Tax authorities face the additional burden that their systems must work for every taxpayer in a stable and predictable fashion according to the Association. Mr Jason Piper, The ACCA’s Head of Business and Tax Law explained, “Businesses operate independently and each will tailor its digital tools to match its own circumstances. The constant change in cycle of technological means no two businesses will implement the same solutions.

“Tax authorities may see a benefit in imposing a standardised system which drags the least innovative business into the digital net. However, there is a risk that enforcing these changes will, in some cases, do more harm than good if they compromise other businesses’ ability to explore all benefits offered by digital tools.”