Embracing Digital Transformation: The Growth of Tax Technology

Embracing Digital Transformation: The Growth of Tax Technology

Paying taxes is one of the most stressful and time-consuming things to do as a country citizen. For almost every government, collecting sufficient revenue and enhancing tax compliance has become a matter of necessity to ensure that there is enough to finance public goods & services. Here’s why every country is now embracing digital transformation. 

Going digital is the new trend. From buying clothes to paying for them, everything can now be done online, thanks to the advancement in technology. Thus now, when it comes to the financial industry of any country, most of them are embracing digital transformation.

We are currently living in the era of technological revolution. This technological revolution is disrupting as well as transforming business, society and government alike. Due to this, all are being challenged to keep up with and adapt to the change. This is even more true for governments because they have struggled to deliver prosperity and growth and are trapped in obsolete and inefficient development models. They now have a major responsibility to lead all kinds of digital transformations.

Here are a couple of reasons why every government and even business should try to adopt digitization for the betterment of tax technology.

Enhanced data collection

It is essential to evaluate how the data is being collected, analyzed, stored and shared as part of the process. When you are rethinking your stack, you will want to make sure that the sensitive data flows into as well as out of your CRM software (customer relationship management.) It ensures efficient and better data collection.

Leap forward technologically with digitalization

Because of digitalization, every developing country gets an opportunity to make small and even significant technological leaps. This phenomenon is named leapfrogging by the economist. This means that all the economies that are less developed can just skip a technological development stage to easily catch up with developed and highly developed economies more quickly.

Crucial financing options for digitalization 

With regards to the financing possibilities of companies and governments, it can easily be assumed that rich economies will find it a lot easier compared to the less developed countries when it comes to driving the digital transformation forward with the help of corresponding investments. Emerging economies with stronger economic growth as well as corporate indebtedness are also better placed to make these investments.

The final word

For developing and newly industrializing countries, the worldwide advancement of the digitalization process is, in simple words, a double-edged sword. This offers technological advances in productivity that help reduce poverty and improve the economic situation for people. At the same time, these countries also lose their decisive competitive advantage, which is cheap labour.

Due to this, countries with high incomes like Germany and the U.S. have long shifted their production processes to countries with low-income. If more and more technologies and capital are used to produce goods, then the importance of low wages will just decline.

Ishat Narain