An Innovative Tax Return System for everyone

1. An Innovative Tax Return System for everyone • The Gothenburg Ministerial Conference • Towards a Knowledge Society - The Nordic Experience • 14.11.2005 • Bjarne HopeDirector General of the Norwegian Tax Administration

2. Personal Tax Return Filing • A traditional obligation • Each person filing own tax information every year • For most people a negative experience - a strain • Our Challenge • Is it possible to make Tax Return Filing a more positive experience? • Can it be made much simpler than before? • Can it be turned into an interesting and attractive task? • What have we done that is Innovative? • Changing the flow of information • Using information technology to simplify

3. An impossible mission? ”How to make pigs fly…..”

4. Impossible? Just extremely challenging? • The Tax System • Rules and Regulations - comprehensive and complex • Difficult to understand for many taxpayers • ”Everyone” • 3,2 mill personal taxpayers - an extremely heterogenous target group • Different tax conditions • Different competence • Different technical conditions • High Performance • Large number of users filing the last day(s) before filing term • Large volumes

5. Developing the Prefilled Tax Return • The Old Paper Tax Return • A four-page form (+ appendix) • Taxpayer had to fill in all relevant information • The Prefilled Tax Return (PTR) • An individual printed form - tailormade for each taxpayer • Only items of information relevant for each taxpayer are presented • Based on 3. Party information or Register information • Includes a tax calculation and shows tax refunds/payments • In production from 1999

6. eFiling of the Prefilled Tax Return • Internet and telephone filing from 1999 • Limited changes and additions • Popular eServices - increasing every year • SMS filing from 2003 • Filing when no changes • Complete Tax Return Net Filing System in 2005 • High demands for simplicity and user friendliness • Goal: Highest possible rate of eFiling!

7. New Tax Return eService- Requirements • The eService to be used by ALL taxpayers • Every item should be possible to change • All necessary appendices (extra forms) should be integrated in the solution • The Tax Return Guide should be integrated in the solution, giving explanation/support to each item • Designed for 3,2 mill users: expected 1 mill (peak 50.000/hr) • Based on the common eFiling System Altinn • A common generic System for eFiling of public forms • Developed by the Norwegian Tax Administration, Statistics Norway and Brønnøysund Register Center

8. Design and test for user friendliness! • We let real users do the testing and verification! • In all stages • Using their feedback to enhance the solution! • Designing for user friendliness • In the requirement phase - based on prototype • In the design phase - Proof of Concept • After detailed design - testing on a prototype • Testing the developed system - full test • Testing a pilot in the production environment

10. eFiling of Tax Return 1999 - 2005 2005

11. User Survey: Tax Return eService • ”Using the Tax Return Internet eService is a simplification for me” Agree fully Agree partly Neither/nor Disagree partly Disagree fully Base: 1159

12. User Survey: Tax Return eService • ”I will recommend to other people to use the Tax Return Internet eService” Agree fully Agree partly Neither/nor Disagree partly Disagree fully Base: 1184

13. Main Achievements - Taxpayers • The Prefilled Tax Return gives a good and correct overview • Self Service advantages: • Choosing when (24/7) and where • Simple, fast and correct • Safe and secure • Getting a Filing Receipt + accessible in Archive • Short time to result • Tax Settlement and refund in 2 months (for most people) • Motivating - and a good picture of own economy

14. Main Achievements - Tax Administration • Increased Compliance and Productivity • Better quality of information • Increased productivity - automation and much better work flow • Better compliance - using more resources for enforcement! • The Prefilled Tax Return has been awarded Prices • Productivity Price 1999 - WCPS Norway • Best Public eService Price 2005 - eNorway • Important Synergies: Changes in Taxpayer’s attitude • towards the Tax Administration • User Survey marks increased from 49% to 68% from 1999 to 2004) • towards paying taxes

15. What can other nations do? • Prepare for prefilling of Tax Information • Legal right to get the necessary information from 3. Parties (3P) • Practical filing and QA routines for 3P information • Develop Prefilled Tax Return Production System • Develop a user friendly Tax Return Filing System • Requirements: • The legal part is the most difficult one, depending on the political will. Could take 3 - 10 years • Development of necessary IT-systems and routines: 2 - 5 years • Recommendation • Small scale start - simple prefilling and filing - to show the benefits!

16. The Electronic Tax Chain Collecting Taxpayer information from 3. Parties (Jan) Produce and distribute Prefilled Tax Returns (March - April) Taxpayer filing own Tax Return (April) Present Tax Settlement Notice (June or Oct) Tax Refund to Taxpayer’s account (June or Oct)

17. A successful service!The Tax Return eFiling Service is easy to understand and use, and it is very simple to change and add all types of tax information.

18. Thank you!