The Director General: The Tax Administration evolves in step with society
The Tax Administration is the largest collector of taxes and payments in Finland, and as such it is the critical actor in keeping public finances running. Succeeding in this mission requires us to accomplish positive impacts: we must maintain tax compliance and improve trust in both the tax system and the Tax Administration as the responsible authority.
Tax compliance means willingness to pay taxes
High tax compliance is evident in the low tax gap. Finland has one of the lowest VAT gaps in Europe. The VAT gap has been assessed by both the European Commission and by using the RA-GAP methodology of the IMF.
The major factor promoting tax compliance is that taxpayers are confident that their taxes will be used for appealing and useful purposes. The Tax Administration’s 2017 customer survey shows that Finns’ tax compliance is extremely high. Almost all of those who responded feel that paying taxes is an important civic duty. Most of the respondents said that they are happy to pay their taxes and consider that they get a great deal in return.
The second most important factor contributing to tax compliance is that taxes are levied fairly across the board – not only are taxes divided in accordance with legislation, but taxpayers also feel that everyone else also pays their taxes. According to the customer survey, citizens think that the system works well, tax control is credible and tax avoidance is difficult.
Another reason why citizens have a positive attitude towards taxes is that filing and paying taxes is effortless. They feel that it is easy to file tax returns and find instructions, and the legislation is comprehensible. They are very satisfied with the services of the Tax Administration.
Tax compliance is also improved by Finns’ trust in public administration and the Tax Administration in particular. According to the customer survey, Finns trust us and our guidance helps them to do things the right way.
Reforms carry us forward
We have identified changes in our operating environment with a view to keeping the tax gap low and ensuring that our customers will continue to handle their taxes correctly in the future. Due to these changes, we must develop our operating methods and adapt them to our customers’ activities. We are making a concerted effort to ensure that we acquire the necessary tax information and harness new technical solutions. For instance, we have started developing measures to address various platform economy phenomena and changes in payment methods. We are stepping up the use of new analytics tools and are looking into opportunities for using robotics for proactive guidance and tax control.
Tax information systems will be modernised using off-the-shelf software. The system now covers inheritance and gift tax, self-assessed tax and corporate taxation – in other words, implementation has progressed to the halfway point. Individual taxation will be transferred to the system in autumn 2018, followed by real estate taxes in 2019. At the same time, we have modernised our e-services system, MyTax.
We have adjusted our organisational structure to better meet the challenges of our ever-changing operating environment. We have launched three new units since the beginning of 2018. The Taxpayer Services Unit handles all customer-initiated advice and services on a centralised basis. The Development and IT Services Unit produces solutions in support of business operations and handles both IT security and operational reliability. In turn, the Incomes Register Unit maintains the national incomes register and serves as the responsible authority. We are implementing the new national incomes register where employers will file income and other information on a payment-specific basis in real time, for use by various parties. The introduction of the incomes register is planned for early 2019.
We have our personnel to thank for our success
The Tax Administration has highly competent and motivated employees. As measured by the VMBaro job satisfaction survey, our employees are more satisfied than elsewhere in central government – and the results have improved year after year. Job satisfaction is improved by factors such as flexible working hours, telecommuting opportunities and our modern office concepts. We also make use of early intervention methods and provide supervisors with a range of support functions. We continuously make outlays to develop the competence of our employees.
We have our employees’ work to thank for our success.