OECD: Technology offers critical solutions to prevent, identify and tackle tax evasion and tax fraud

OECD issued a report Technology Tools to Tackle Tax Evasion and Tax Fraud on 31 March 2017 (the “Report”).

The Report demonstrates how technology is currently being used by tax administrations in some countries to prevent, identify and tackle tax evasion and tax fraud.

According to OECD these solutions can offer a win-win situation:

better detection of crime, 
higher revenue recovery, and 
synergies that can make tax compliance easier for both - businesses and for tax administrations.

Drawing on the experience of 21 countries, the report provides examples of best practices in the effective use of technology in the fight against tax crimes:

In Rwanda, the introduction of point of sale technology to address electronic sales suppression resulted in a 20% increase in VAT collected on sales.
In the Canadian province of Quebec, similar technology was introduced in the restaurant sector, resulting in the recovery of approximately EUR 822 million in taxes, projections amount to EUR 1.44 billion by 2018 - 2019.
In Hungary, electronic cash registers increased VAT revenue by 15% in the concerned sectors.
In Sweden implementing cash registers connected to a fiscal control unit increased tax revenues by some EUR 300 million on an annual basis.

According to the Report, due to domestic invoicing fraud Slovakia lost in 2014 and 2015 the amount of some EUR 500 million in VAT. Mexico lost some EUR 3 billion on tax revenue due to forged invoices. Some countries implemented electronic invoicing to handle this issue. The impact in Mexico also was that mandatory electronic invoicing brought 4.2 million micro-businesses into the formal economy.

The report was launched during the 2017 OECD Global Anti-Corruption and Integrity Forum in Paris. The event brings together stakeholders from government, academia, business, trade and civil society to engage in dialogue on policy, best practices, and recent developments in the fields of integrity and anti-corruption.

The report was prepared by the OECD's Task Force on Tax Crimes and Other Crimes, which works to further the Oslo Dialogue. Launched by the OECD in 2011, the Oslo Dialogue promotes a whole-of-government approach to tackling financial crimes by fostering inter-agency and international co-operation.