Rethinking Tax Services

The Changing Role of Tax Service Providers in SME Tax Compliance

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The landscape of tax services, traditionally provided by parties such as tax advisors, accountants and other tax practitioners, is changing, thanks to new technologies and services such as online accounting and filing, mobile devices, and machine-to-machine communication. This may lead to more integrated tax systems, in which taxation is part of the day-to-day operations of SMEs. This report provides an overview of relevant technological and business developments and new service solutions. It also explores how these influence SMEs, tax service providers and tax administrations – and the way that they co-operate. Tax administrations can adopt different types of network strategies for co-operating with tax service providers. The report identifies four basic network strategies. In countries without an established tax service provider infrastructure, such as developing and emerging economies, leveraging new technologies (such as online services and mobile payment) may create new possibilities for providing infrastructure that is both beneficial for SMEs and promotes tax compliance.


How tax administrations can relate to tax service providers

four network strategies

Tax administrations can adopt different types of network strategies for co-operating with TSPs. This chapter identifies four basic network strategies. These strategies can be characterised as being more closed (specifically targeting businesses’ tax processes) or more open (looking at the broader business processes). They can also be more “governmentdriven” versus more “market-driven”. It is important that such strategies fit the broader compliance strategy of a tax administration and meet the specific legislative, technological and cultural environment of a tax administration. “Finding the right strategy” involves many factors, and the right strategy is often not a single strategy. The environment may be different for different taxpayer segments, types of tax service providers or industries, and given that tax administrations also operate in existing networks and alliances, a combination of network strategies may be helpful.


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