Revenue Assurance
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Overview
How RegTech Assurance works
New trends promote real-time reporting versus traditional tax reporting. Invoices issued by and for the taxpayer are identified as the main building blocks for reporting and thus are mostly affected by the tax reforms.
These reforms need to be handled thoughtfully and carefully. This unfortunately it is not always successful as these new systems are not quickly accepted by the market and stakeholders involved. A comprehensive electronic invoices received in real-time are not enough if the goal is to communicate to the taxpayers that an active system is in place to identify fraud. Revenue assurance means a technology is established to affix each electronic invoice with enough data that validates and confirms information is accurate and well received by tax administration.
Plenty of data is not good enough, but plenty of accurate data is, because the ultimate goal is a pre-filled tax return. A moment when taxpayer receives a bill from Tax Authority for the amount of all taxes due.
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Our approach
What we did
A “tech only” answer only “paves the cow paths” as Michael Hammer and Thomas Davenport explain in Re-engineering Work: Don’t Automate, Obliterate, HARVARD BUSINESS REVIEW 104-112 (1990, July-August).
“It is time to stop paving the cow paths. Instead of embedding outdated processes in silicon and software, we should obliterate them and start over. We should “reengineer” our businesses: use the power of modern information technology to radically redesign our business processes in order to achieve dramatic improvements in their performance.“
Digital invoice reforms need to be handled thoughtfully and carefully. It needs to be approached with the same level of comprehensive seriousness as would apply to a commercial enterprise that undertakes a tech-based modernization of a fundamental business process.
Successful BPR reforms require that a government authority pre-think, internally vet, and work-over countless fraud scenarios with the audit staff to make sure they “get it right” before it “goes live.” You don’t “just digitize it!” R.T.A.
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Our result
What we ended up with
Jurisdictions that have enhanced their existing transaction taxes — whether a VAT or retail sales tax — with a real-time security system that automatically encrypts and reports all transactions to the tax authority have seen significant increases in revenue as a result.
When the Revenue Assurance system is fully operational, the resulting revenue boost for the indirect tax alone is rarely less than 20 percent.
Besides revenue impact, the introduction of a Revenue Assurance solution alone can significantly accelerate the data cleansing process if a deadline to comply is coupled with mandatory information supply.
Another benefit is that invoice is issued in online or offline mode and made instantly verifiable on the publicly available website run by the Tax Authority. Such invoice verification is also a foundation of a consumer compliance award program (receipt lottery) which is a proven mechanism used to stimulate consumers to ask for fiscal invoices and increase compliance rate.
Richard T. Ainsworth, Esq., LL.M.
Richard Thompson Ainsworth is an attorney with over 30 years academic, government, and private sector tax experience. He is currently an Adjunct Professor at the Boston University Law Graduate Tax Program, and the New York University Law Graduate Tax Program. He was formerly the Director of the Boston University Graduate Tax Program, Deputy Director of the International Tax Program at Harvard Law School, Senior Litigation attorney with IRS Chief Counsel, and Legal Issues Officer with the New Hampshire Department of Revenue.
He has held tax-technology positions of Director of International Tax (Government Affairs) with Taxware and ADP. He teaches courses in VAT, Comparative Income Tax, US Transfer Pricing, and Comparative International Transfer Pricing. He developed an expertise in transaction taxes (VAT and Retail Sales Taxes) at Harvard Law School under Professor Oliver Oldman, where he was also an Adjunct Professor of Public Policy (Harvard Law and Kennedy School of Government). He has developed an expertise in tax and technology at Taxware and ADP. He has written extensively on tax and technology with well over 100 articles in various national and international journals.
Ben Kagarama Bahizi
Ben Kagarama Bahizi is a distinguished professional with a proven track record in public administration, particularly in the field of revenue management. He served as the Commissioner General of the Rwanda Revenue Authority (RRA) from 2011 to 2014. During his tenure, he demonstrated exceptional leadership skills and a strong commitment to enhancing the country’s tax collection base. His strategic initiatives significantly contributed to the growth and development of the RRA.
In addition to his role as Commissioner General, Kagarama was instrumental in advocating for increased tax collection in all Rwandan regions. His efforts led to a substantial increase in the tax collection base accross the country. Despite his departure from the RRA in 2014, Kagarama’s impact on Rwanda’s revenue system remains evident. His professional journey reflects his dedication to public service and his ability to drive significant change in revenue management.
RegTech Revenue Assurance: An Overview
RegTech is crucial for revenue assurance as it fosters for financial integrity and aids in maintaining regulatory compliance. Read why!
RegTech Revenue Assurance Compliance Monitoring
RegTech Revenue Assurance plays a pivotal role in compliance monitoring by analyzing data and identifying patterns that indicate issues.
RegTech Revenue Assurance Fraud Detection and Prevention
RegTech Revenue Assurance is a sophisticated approach that uses technology to aid adherence to regulatory requirements and to prevent fraud.
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