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Working Smarter in Tax Debt Management

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Many revenue bodies have been developing strategies and approaches to improve the tax collection and recovery processes, so that they are more effective and cost less. Very promising and proven new practices have emerged, which can deliver spectacular improvements in performance in tax collection and recovery. This report provides a comprehensive overview of the best practices in tax debt management, with a particular emphasis on how to better differentiate debtors when deciding how to best secure payment and what can be done to ensure that payment issues are considered earlier in the compliance and collection process.

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Executive summary

Following the global financial crisis the amount of money owed to revenue bodies increased sharply and it still has not fallen back to pre-crisis levels. It is estimated that OECD-governments alone were owed around two thirds of a trillion US dollars in undisputed tax debts at the end of 2013. For FTA member countries the total value of the tax debt book averages more than 12% of total net revenues, or more than six weeks’ worth of tax income. In some countries it is even larger. As governments work to repair public finances they expect revenue bodies to improve the flow of tax income and reduce their costs. Ensuring that everyone pays his or her taxes is also vital in terms of the perceived fairness of the tax system.

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