RevenueDelivering Public Service for the Future

Reshaping Revenue Agencies: From Looking Digital, To Being Digital

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Revenue agencies must rethink their digital services to meet the needs of today’s taxpayers Revenue agencies have often lead the way in the shift to digital services, introducing technologies such as online form filling or personal online accounts. Already, almost two-thirds of taxpayers (62 percent) in nine countries surveyed by Accenture use at least some digital channels to interact with their revenue agency.1

However, revenue agencies must go further. With most of the world’s population2 using mobile communications and taxpayers’ growing appetite for more personalized digital services, it is no longer enough to offer only the most basic online services. The digital maturity of taxpayers is now running ahead of that of their revenue agencies.

Taxpayers expect more. Accenture’s Global Taxpayers Survey 2014 found widespread demand for better digital services from revenue agencies. For instance, 70 percent of taxpayers believe revenue agencies have to offer online services and apps just as banks do.

Now is the time for revenue agencies to build on their early successes and move from “looking digital” to “being digital”.3

What does this mean? Revenue agencies can become far more accessible to taxpayers, offering ease of access across multiple devices and moving towards “zero touch” taxation. This will require the development of new services and processes. For example, greater use of data and analytics, automating basic tasks and implementing collaboration tools for employees. Revenue agencies that shift to being digital have an opportunity to embed intelligent digital processes that rethink traditional workflows.

Digital taxpayers are set to redefine revenue agencies

What is the business model blueprint for a digital revenue agency? The answer for agencies moving from looking digital to being digital will partly come from taxpayers. The new model must be taxpayer-centric—based upon rich, personalized interactions that reduce the strain on traditional channels—rather than designed around silos driven by different services and organizational structures.

Taxpayers are ready to tell public service agencies what they want. The Accenture Digital Citizen Pulse Survey4 found that 71 percent of citizens want to be involved in the design of public services.

User groups and collaborative forums such as online feedback facilities give revenue agencies an opportunity to listen to taxpayers, but clear messages are already emerging. Taxpayers are looking for collaborative services that enable them to interact digitally with revenue agencies as though they were dealing with traditional service agents.

For example, four-fifths (81 percent) would be interested in using a virtual digital assistant that could answer customer questions, while almost two-thirds (61 percent) would like a live online-chat service outside of business hours.5

There will be no single breakthrough moment in launching these services; nor will one size fit all. Revenue agencies must be prepared for their digital services to evolve—and they must be sufficiently agile and flexible to experiment and adjust services according to user feedback and usage. The process will be iterative, based upon the experience and requirements of taxpayers.

The search for new and different skills

To create and evolve this agile, taxpayer-centric operating model, revenue agencies need to further develop their digital competencies. This will not happen without greater support for the current workforce and management.

Figure 1. Taxpayer-Centric Operating Model Framework

Governance

Transformation Management

Operating model designand execution

Analysis andinsights

Strategy andcustomer

experience

Taxpayer

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Part of the shift will be an investment in talent—both retraining and developing existing staff that are digital pioneers, and hiring new people to plug gaps that can’t be filled internally. Engaging with customers digitally requires a new set of skills and employees who are talented and creative in user experience, data management and processing, analytics (including predictive analytics) and econometrics.

In the UK, HM Revenue & Customs’ 2014 Digital Strategy notes: “We need to build up teams that can understand customer behavior, deliver and run services, change policy and address tax risks at the same time.”6

However, process will be important too. Private sector businesses are increasingly tasking digital acceleration teams to work throughout their organizations to help existing functions adopt digital tools and strategies. Revenue agencies will need to do the same.

These imperatives represent a major challenge for revenue agencies’ management teams. Without a deliberate and strategic program of change management, and developing and organizing new digital skills and talents, the shift to a taxpayer-centric digital operating model will not be possible. See Figure 1.

A new ecosystem for a new type of revenue agency

Revenue agencies have traditionally recognised the importance of employers and retailers in fulfilling their mission, but a taxpayer-centric digital operating model will require greater collaboration across an ecosystem with stakeholders from both the public and private sectors, and with partners including banks, accountants, lawyers and other government agencies.

There are already examples of models that work on this basis. Property Exchange Australia (PEXA)7 has built an online platform with participants including land registries, banks, lawyers and other financial institutions.

The e-conveyancing service is able to provide everything from mortgage arrangement to the filing of land registry documents because of its wide-reaching ecosystem.

The good news for revenue agencies is that most taxpayers trust them to look after their sensitive data: some 71 percent of taxpayers said they had a high level of trust in their revenue agency.8 This represents an opportunity for revenue agencies to offer more digital services based on data management and analytics, with richer collaborations that deliver simpler user experiences.

Engaged taxpayers may be more compliant taxpayers

Another reason to move towards greater digital engagement with taxpayers is the potential to improve voluntary compliance. Better digital services could promote compliance, both actively and indirectly, leading to increased revenues for government and lower collection costs.

Taxpayers who feel satisfied about their experience of working with revenue agencies tend to be more likely to comply voluntarily. In simple terms, make it easier for customers to do the right thing and they generally will. See Figure 2.

However, none of these advances will be possible if revenue agencies don’t change their mindset. They must be willing to embrace a taxpayer-centric model and shift from looking digital, to being digital. This will require the development of new services and processes, along with a different set of skills—making revenue agencies more accessible to taxpayers.

Those revenue agencies that succeed in making this shift will better meet the needs and expectations of the communities they serve. Through offering a higher level of service and improving revenue collection they will be on the path to delivering public service for the future.

Figure 2. Engaged Communities lift voluntary compliance

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Participative

Confident Connected

Satisfied

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Accenture Community Engagement Hierarchy

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unity Bond

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Contact

David ReganManaging Director Health & Public Service, Revenue Industry Lead david.regan@accenture.com

Connect with us to learn more on delivering public service for the future on Twitter @AccenturePubSvc

References1 Digital Disruption for Tax Administration, Accenture, 18 December 2014

2 “The World in 2014,” International Telecommunications Union, Facts and Figures, April 2014

3 From Looking Digital to Being Digital: The Impact of Technology on the Future of Work

4 Build it and They Will Come? The Accenture Digital Citizen Pulse Survey 2014

5 Transforming revenue agencies: evolving digital strategies to meet taxpayer agencies, Accenture, 2014

6 HMRC digital strategy: 2014, HM Revenue & Customs, Accessed via: https://www.gov.uk/government/publications/hmrc-digital-strategy-2014/hmrc-digital-strategy-2014

7 https://www.pexa.com.au/news/article/property-exchange-australia-limited-welcomes-three-new-financial-institutions-to-pexa/90

8 Accenture’s Global Taxpayers Survey 2014

About Delivering Public Service for the Future

What does it take to deliver public service for the future? Public service leaders must embrace four structural shifts—advancing toward personalised services, insight-driven operations, a public entrepreneurship mindset and a cross-agency commitment to mission productivity. By making these shifts, leaders can support flourishing societies, safe, secure nations and economic vitality for taxpayers in a digital world— delivering public service for the future.

About Accenture

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