MEPs hear out experts on using technology to reduce lost tax revenues

Peter Green of the OECD presented the work published in December called “Tax Administration 3.0” which makes the case for using technology to increase tax compliance by design,

Momchil Sabev of the European Commission outlined the work being done by his service to help national tax authorities share data between each other more effectively. He argued that the pooling of the data each administration collects will be key and that technology can play an important role in this.

Stefka Dzhumalieva, also from the European Commission, explained the work her service is undertaking since 2016 in using Blockchain to facilitate tax compliance and fight tax fraud.

Vincent Drezet, a French tax expert, said that much was expected from technology in the field of taxation but the results, as testified by France, were so far somewhat disappointing. He outined what improvements were needed and stessed that technology adoption should not lead to less tax inspectors but differently trained tax inspectors.

During the questions and answers, MEPs focussed on how technology could be used to detecting previously difficult to identify fraud, and on how it could detect tax evasion and avoidance schemes put in place by high-net individuals with the resources to construct complex and opaque structures. MEPs also sought to get a better insight into how the technology could help fight EU cross border fraud better, notably in the area of VAT fraud. The need to develop the technology while at the same time not creating extra burdens on small businesses was also raised.

The hearing can be watched again here.