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.


Tax service providers in a dynamic market

TSPs play an important role in assisting SMEs to comply with tax regulations, but often provide broader services to SMEs. Due to the technological developments discussed in the previous chapter, the TSP market is rapidly changing. TSPs face higher customer expectations, more upfront strategies that are adopted by tax administrations, and new entrants and service offerings that enter the market. This chapter addresses the changing business models of TSPs and assesses how the entry of new service providers and their service offerings change the (established) TSP industry. This also affects the expectations that both established and new TSPs have towards tax administrations.


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