Raising Revenue Right : A Roadmap for Domestic Resource Mobilization - Chapter 3 : Technology in Tax Administration

Overview & Synopsis

This chapter examines how digital technologies are transforming tax administration and expanding the potential for more efficient and equitable revenue collection. It highlights the rapid adoption of digital tools, including electronic filing and payment systems, digital taxpayer registration, electronic fiscal devices, automated audits, advanced data analytics, and artificial intelligence. These technologies strengthen core tax administration functions by improving taxpayer identification, verifying tax liabilities, and enhancing revenue collection. While digitalization can increase revenue, reduce compliance costs, improve transparency, and broaden tax system coverage, many countries have yet to realize these benefits fully due to weak enforcement, limited analytical capacity, inadequate data infrastructure, and emerging privacy and governance concerns. Focusing on emerging market and developing economies, the chapter assesses the impact of technology on tax administration, explores the constraints limiting its effectiveness, and outlines the policy and institutional conditions required for successful digital transformation.