Posted by:
Antish Awootar
Publish Date:
1 Apr, 2024
Over the last few years, both the public and private sectors have encountered shortages, delays, staffing issues, economic struggle, and legislative changes. Amid crisis, digitalization, machine learning, and AI have emerged as vital solutions for maintaining services effectively.
Understanding the process and laying strong foundations for your SAP® S/4 HANA digital taxation platform is crucial for unlocking its full potential.
With over a decade of experience designing and implementing tax solutions for invenioLSI clients, I’ve compiled my top 12 steps for getting your organization ready for a Next- Gen Digital Tax Platform.
1. Ensure your master data model reflects your organizational operations
Before proceeding, it's important to lay a solid foundational structure for your master data model. One of the key benefits of using SAP® S/4 HANA is its flexibility, which enables users to easily model different operational structures. Ensuring your master data model accurately reflects the collected entity data is vital for clean and reliable data which is essential for achieving that 360° visibility that drives the many benefits of a digital tax platform.
2. Establish a data cleansing project early on
Poor data can lead to delays in your migration project and cause issues like double-billed invoices or duplicated calculations, harming system integrity and stakeholder support early on. Ensuring data quality during integration is crucial to avoid last-minute surprises. By establishing a data cleansing project that runs independently early in the ERP integration process, you can eliminate duplicates and assess data quality. Additionally, by collaborating with your ERP integration partner, who can provide ETL (extraction, tallying, and loading) tools and a migration cockpit, you can control the data you’re migrating.
3. Integrate with data partners
Integration is a major time-saving advantage of an intelligent ERP tax platform like SAP® S/4 HANA. However, integrating with other data partners is essential for maximizing these benefits. Working closely with government departments or external bodies and integrating your digital tax platform expands workflow and automation capabilities, saving time and enhancing compliance and revenue collection.
4. Review existing processes and redesign them
Launching a digital tax platform offers a chance to streamline workflows and save costs. To make the most of it, adaptability is key. Holding onto old practices is like buying a car but still taking the bus. Embrace business rules and technological advancements like self-service data input and automation for maximum benefits.
5. Transfer all data entry tasks to the taxpayer
Empowering taxpayers to handle their own data entry reduces administrative burden and improves data quality. By ensuring accurate data input, taxpayers can avoid incorrect tax payments, late fees, and overpayments.
6. Automate your processes
Automating processes not only lightens the administrative load for tax officers but also saves costs and improves data quality. Automation enables proactive work by identifying potential payment defaulters in advance with the ability to send reminders, boost compliance and simplify revenue collection.
7. Empower the taxpayer with self-serve capabilities
Tax agencies often find that automating processes within a tax payment platform not only enhances compliance and revenue but also reduces the need for manpower in chasing debtors. Shifting data entry responsibility to taxpayers alleviates administrative burdens and associated costs, while also reducing errors. Moreover, transferring responsibility can even increase compliance with tax regulations.
8. Make payments simple
When payments are easy and convenient, customers or taxpayers are more likely to pay on time. A digital tax platform eliminates the need for chaotic payment methods like waiting in line at post offices or ATMs. Instead, it offers simple payment solutions that can be accessed anytime, anywhere, without the taxpayer having to leave their home.
9. Use a standard system with accelerators and avoid bespoke coding
When incorporating new code into a tax platform, it brings challenges. It's not just expensive; it also requires extensive testing, which prolongs rollout and testing times. Creating extra code becomes necessary, and if the original coder isn't available, the existing code may require adjustments before new code can be added. This could lead to a less stable and more complex system.
10. Empower your tax agents
For many citizens, working with tax agents, accountants, or auditors is crucial for filing tax returns and paying taxes. Empowering these professionals to assist the tax agency in collecting data helps citizens get the support they need for accurate tax filings. You can provide options like enabling tax agents to access and edit client data through a portal or offering a matching service to pair tax agents or accountants with those seeking representation according to specialisms.
11. Ensure your legislation is flexible
Often tax legislation can be strict but making legislation flexible enough to allow for the incorporation of a digital tax platform is an essential part of a smooth rollout. Any major tax reform plans will need to be postponed during the build and rollout to ensure that any changes are applied at an appropriate point in the rollout, through the introduction of a new set of business rules.
12. Integrate AI & e-invoicing capabilities
Implementing e-invoicing boosts tax revenue and GST/VAT compliance, maximizing the benefits of your digital tax platform. With e-invoicing, tax data and payments are automatically sent to the tax agency upon purchase, enabling pre-filled tax returns and streamlined compliance. Smooth payments accelerate revenue collection, aiding taxation authorities in more effective budgeting based on reliable income streams.
No matter how much you integrate your digital platform, following best practices is key to avoiding costly issues down the road. Taking the time to establish strong foundations for your digital tax platform, aligned with your business operations, enhances stability and ensures maximum return on investment. This not only benefits tax agents but also provides a better user experience for citizens.
When picking a partner, look for experience in rolling out digital tax platforms. It means you'll have skilled engineers dedicated to your project and access to helpful resources like accelerators, saving you time and money in the long run.
Download our eBook to learn more! Tax & Revenue Managment eBook