E-government is not new, and many governments already have an interactive web page for filing and querying tax returns. However, interacting via social media brings additional benefits, the OECD believes.
Social media technologies and tax administration, a report by the OECD Centre for Tax Policy, describes the inherent advantages and risks of delving into web 2.0. The advantages appear straightforward: virtually free online word-of-mouth marketing, and a forum for explaining tax policy and tax forms; social media puts a personality behind the paperwork, and even facilitates recruitment for product-testing and jobs. The disadvantages seem to be few, with even set-up costs being relatively low and contained.
Several countries have jumped on the bandwagon, and it is time other countries joined them, the report suggests, especially if they start small, monitor, evaluate and build. There are plenty of good examples to follow.
The US Internal Revenue Service, for instance, has reached out to taxpayers with some 120 videos on YouTube, and one of them, “Recovery: Education Credits–Parents”, got over 25,000 views. The Australian Taxation Office, ATO, uses Twitter to gauge real-time community attitudes to ATO initiatives and policies. The Canada Revenue Agency, CRA, used webinars to provide information for the transition of its Harmonised Sales Tax, and these proved so useful to accounting firms that they were reposted for use during year-end returns.
New Zealand Inland Revenue uses Facebook as a public forum to solicit feedback on policy, reporting that “around 10% of submitters made iterative comments, their comments built on ideas raised by earlier submitters”, interaction which was not possible through traditional channels. They are also using Facebook and Twitter to post tax-related messages to Christchurch earthquake-affected customers.
Does social media really make users feel more connected with and trustful of tax officials? In an ideal world, yes. As in the non-virtual world, though, no one likes to be too forthcoming with the bureaucrat responsible for claiming a slice of their income. Transparency is after all a two-way mirror, as the Wall Street Journal reminded readers in a 2009 article, “Is 'Friending' in Your Future? Better Pay Your Taxes First”. Some tax agencies can even search blogs and Facebook comments to detect or prove cases of tax evasion.
There are drawbacks for tax authorities as well. The Australian Taxation Office says that while observing community discussion allows them to be proactive in addressing issues before they arise, monitoring can be time-consuming. There is the inevitable uncensored criticism, and the agency finds it a challenge keeping their Facebook page interactive and engaging outside tax collection time. Furthermore, it is not yet clear whether the advice given via social media is legally binding.
On balance, however, the negative experiences reported to date by revenue bodies has, for the most part, been minimal and of relatively little consequence; much of what has been experienced can be linked to weaknesses in setups, challenges in resource availability, and negative feedback (some tax policy-related).
That said, taxation is one of the more useful forms of e-government, with social media used for filing taxes online, so saving money for taxpayers and agencies. The Danish revenue body, SKAT, reports, “every time we learn from users and make appropriate changes, we receive fewer calls to our call centre, thus reducing man-hours spent on the phones”.
So-called m-government is also taking off, thanks to broader bandwidths and handy apps for smartphones and iPads. The US tax authority, the IRS has created IRS2Go, an app that lets users track the status of their refund, subscribe to e-mail updates, follow on Twitter and use a click-to-call to reach a help line. Your friendly taxman really is just a click away. AB
OECD (2011), “Social Media Technologies and Tax Administration”, Forum on Tax Administration, Centre for Tax Policy and Administration, Paris.
Saunders, Laura (2009), “Is 'Friending' in Your Future? Better Pay Your Taxes First” in Wall Street Journal, 27 August 2009.
For more on the OECD's work on tax administration, see www.oecd.org/ctp/ta
See also www.oecd.org/gov/egov
©OECD Observer No 286 Q3 2011