The foundation of this collaboration is our proven experience and results over years of work in fiscal modernization. DTI has consistently delivered its solution that enhanced transparency and reduced the compliance burden on businesses. Eswatini now stands to become a benchmark that other African nations will have an opportunity to study closely. We approach this project with humility, knowing that lasting success depends on close teamwork, not just good technology. Particular thanks go to ERS leadership, whose bold vision and steady commitment made this kick-off possible.

System implementation will follow a structured, phased approach. At first, the current Inception phase refines the technical blueprint and legal framework. Initial Capacity Building installs the system in a staging environment and trains the first user cohorts. Full Operational Capability activates the complete platform in production. Final Acceptance delivers a fully validated, independently verified solution. Equally important, the focus during each stage remains on practical readiness: secure configuration, seamless integration with existing systems, comprehensive staff training, and documentation that makes the system approachable for tax officers and businesses alike.

Key Takeaways

1. A Continental First: TaxCore’s deployment in Eswatini marks the platform’s first full implementation on the African continent, positioning the country as a potential model for tax modernization across the region.

2. Tamper-Proof by Design: Every transaction is certified at the point of sale through an electronic signature generated by a secure element that operates independently of the business invoicing system. This separation is what makes the system structurally resistant to manipulation..

3. Verification for Everyone: Compliance checks require no specialized knowledge or equipment. Any inspector can verify a document on the spot, while online verification services give both authorities and the general public the ability to authenticate records at any time.

4. Built for a Fair Market: Compliance requirements are fully transparent, allowing any technology supplier to build a compatible solution. Businesses of all sizes and sectors are accommodated, and no single vendor holds a structural advantage.

5. Real Revenue Impact: Eswatini faces a meaningful tax gap rooted in under-declared transactions. Comparable deployments have delivered VAT collection increases of 8% to 48% in targeted sectors. With every sale independently certified at the source, under-reporting becomes structurally difficult rather than merely discouraged.

Eswatini Implements TaxCore: From Years of Vision to Today’s Launch

Interest in modern VAT monitoring and fiscalization in Eswatini has been building for years. Moreover, the Eswatini Revenue Service has shown consistent vision and determination, steadily advancing toward a modern, transparent tax system through careful public procurement. Discussions began back in 2015–2016 and evolved through several formal Expressions of Interest and tender initiatives focused on Electronic Fiscal Devices and broader digital tax monitoring solutions.

Henceforth, this clear and persistent policy direction reached an important milestone with the Request for Proposals issued in May 2025. Data Tech International actively participated in the competitive evaluation process, which included detailed technical assessments and site visits to live TaxCore deployments in other countries. Following this thorough and professional evaluation, DTI was selected as the successful bidder.

Today, that patient journey of preparation turns into reality. We are proud to begin the official implementation and deliver a solution that will bring real benefits to Eswatini.

TaxCore: Closing the Tax Gap in Real Time

At its essence, TaxCore functions as a real-time fiscal monitoring system built on one clear principle: every payment document must contain complete transactional data so the system can verify correct tax calculation and prevent any manipulation. A dedicated secure element, independent of the business invoicing system, achieves this by applying an electronic signature to every transaction at the moment it occurs. The separation of these two components is deliberate and fundamental. It ensures that no single party controls both the business logic and the integrity seal, which is what makes the system genuinely tamper-proof rather than merely compliant on paper.

Generally, this architecture does not impose a one-size-fits-all solution on businesses. The secure element and invoicing system can operate as separate products or as a fully integrated unit, and the system ensures that producing a certified document introduces no delay to normal business operations. Every document clearly identifies its issuer, and in business-to-business transactions, the system equally protects the identity of the purchasing party with an electronic signature, safeguarding both sides of the transaction from any unauthorized modification.

Deployments across Europe and the Pacific have produced consistent results, including higher voluntary compliance, reduced revenue leakage, and meaningful increases in tax collection without any change to tax rates. Eswatini will draw directly on those proven capabilities.

Inspection Without Bureaucracy

One of TaxCore’s defining strengths is how it handles verification. A tax inspector in the field does not need sophisticated technical knowledge or specialized equipment to confirm that a document is authentic. At this point, the integrity of any payment document can be checked immediately and on the spot, making routine compliance verification fast and practical. For deeper audits, authorized personnel follow a unified inspection method that extracts transaction data from the secure element, preferably in encrypted form, through a standardized process that works consistently across all businesses.

Beyond official inspection, verification services are available online and through multiple channels, so that both authorities and members of the public can authenticate documents at any time. The system makes electronic journal records accessible in human-readable form, either through the invoicing system or via a secure data collector, ensuring that transparency extends beyond those with technical expertise.

A Level Playing Field and a Better Experience

TaxCore is also designed with the broader market in mind. Compliance requirements are fully transparent, meaning any technology supplier can build a compatible solution and compete fairly. Furthermore, a wide variety of invoicing system models is supported to accommodate businesses of different sizes, sectors, and operational needs. The system does not favor any particular vendor or create barriers that concentrate the market.

For businesses and citizens, the day-to-day experience is straightforward: payment documents, whether printed or electronic, present tax information clearly and unambiguously to the customer. There is no fine print, no ambiguity about what was charged and why.

Eswatini Implements TaxCore: Why This Matters?

Eswatini currently faces a tax gap driven largely by under-declared transactions. TaxCore addresses this directly. Because the system certifies every sale at the source and signs it independently, it not only discourages under-reporting but makes it structurally difficult. At the same time, the system’s simplicity and accessibility make honest compliance the path of least resistance for businesses that want to operate cleanly.

The numbers from comparable deployments speak for themselves: jurisdictions implementing similar fiscalization platforms have recorded VAT collection increases of between 8% and 48% in targeted sectors, with broader improvements in tax-to-GDP ratios as digital tools widen the base and reduce administrative friction.

Finally, DTI is proud to support Eswatini on this path. We are confident that a successful implementation here will carry weight well beyond the country’s borders, and we intend to earn that outcome every step of the way.

The post Eswatini Implements TaxCore – Game Changer Arrives! appeared first on Dti.

The visit coincided with a significant milestone as the project had just completed its Initial Operational Capability (IOC) phase. This phase represents a critical step toward the system’s Full Operational Capability (FOC), the stage when the VSMS will be fully operational and capable of monitoring sales across the country.

During the briefing, the DCIR team, in collaboration with Data Tech International (DTI), presented a detailed update demonstrating that the system is ready to move into the next stage. Officials highlighted the steady pace of implementation and the system’s capacity to enhance oversight in the national tax process.

The presence of the nation’s top leaders accentuated the government’s commitment to advancing digital tools for more effective tax administration. Their visit emphasized both political support and public accountability for this high-priority initiative.

System Objectives and Achievements

Ms. Maja Miodragović, DTI Account Manager, showcased the VSMS’s achievements to date, highlighting the system’s core objectives. These include reducing tax fraud and under-reporting, strengthening tax compliance, maximizing revenue collection, promoting transparency, and supporting fair competition among businesses.

The briefing highlighted how registration and accreditation activities are advancing steadily, bringing more businesses into the system. These efforts demonstrate the VSMS’s ability to integrate with existing structures while preparing for broader implementation across sectors.

Furthermore, officials presented measurable progress in each area, indicating that the system is on track to meet its design goals. The collaboration between DCIR and DTI has been focal to achieving these objectives, combining technical expertise with operational oversight.

This stage of the project reflects the government’s dedication to transforming Vanuatu’s tax system and preparing for a fully operational, digital monitoring platform.

VSMS by TaxCore: Government Endorsement and Next Steps

Both the Prime Minister and Minister of Finance expressed their satisfaction with the progress achieved. They publicly commended the strong partnership between DCIR and DTI, framing the project as a transformative initiative for Vanuatu’s fiscal administration.

“I commend the joint efforts of DTI and DCIR,” the Prime Minister said. “I am enthusiastic about the upcoming phases and eager to see the first results. We look forward to Vanuatu’s continued progress toward digital transformation.”

Finally, the visit concluded with a reaffirmation of the government’s commitment to digital transformation. With the VSMS moving steadily toward Full Operational Capability, the leadership’s endorsement indicates continued support for the system’s implementation and operational expansion.

The positive outcome of this visit provides a strong setting: Vanuatu is advancing in digital tax compliance, aligning practical technology deployment with governmental oversight, and setting the stage for a fully operational, transparent, and accountable system that benefits both the state and its businesses.

The post VSMS by TaxCore: Prime Minister Reviews Progress appeared first on Dti.

For Gesa, the Deputy Director of Inland Revenue at Vanuatu’s Ministry of Finance, the sentence is the central dilemma of governing this South Pacific nation of just over 300,000 people spread across 83 islands. His department does collect money, yes, but that money keeps the lights on in schools, funds healthcare, maintains ports, and pays for the asphalt that connects villages to towns as well. Revenue is the bloodstream of the government, and for years too much of it has been slipping away into a shadowy maze of unrecorded cash transactions.

Rewriting the Rules of Taxation – Locally

Now, in a move that would sound ambitious in far larger economies, Vanuatu is locally rewriting the rules of taxation. The solution: a fully digitized tax monitoring system, designed to catch in real time what once vanished without a trace. The name is as technical as it is unassuming, the Value Added Tax Monitoring System, or VSMS powered by Data Tech International’s TaxCore, but behind it lies a confident idea. “It is a full-fledged journey,” Gesa says, a hint of pride creeping into his usually clipped delivery. And he means it literally: the journey from manual ledgers and patchwork reporting to e-invoicing powered by live data.

The Ministry of Finance and Economic Management, through the Department of Customs and Inland Revenue (DCIR) led by Mr Harold Tarosa, is preparing to roll out the new Vanuatu Sales Monitoring System (VSMS) to improve Value Added Tax (VAT) collection nationwide. The system will be introduced between August 2025 and January 2026.

At the heart of this shift is a partnership with Data Tech International (DTI), a company with global experience in fiscal solutions, and its platform Taxcore, which is powering VSMS. As always, the collaboration is much more than a technical handoff but a daily, evolving dialogue, one that, in Gesa’s telling, has already given his team a newfound sense of confidence.

5 Key Takeaways

1. From Informal Chaos to Digital Order: Vanuatu’s economy has long been dominated by an informal cash sector that left government coffers starved. With VAT as the country’s financial lifeline, the introduction of the Value Added Tax Monitoring System (VSMS) powered by Data Tech International’s TaxCore is designed to bring transparency and accuracy to revenue collection.

2. A Partnership That Fits Local Realities: Unlike one-size-fits-all solutions, the collaboration between Vanuatu’s Inland Revenue Department and Data Tech International has been deeply customized. Learning from Fiji and Samoa’s experiences, Vanuatu tailored the e-invoicing system to its own context, with DTI working closely alongside a dedicated local project team.

3. Real-Time Data, Real-Time Accountability: Every transaction in the system generates an e-invoice that is logged instantly. This live data stream ends the old reliance on quarterly filings and guesswork, giving policymakers the tools to monitor revenue, plan budgets, and address gaps with precision, even when offline.

4. Businesses as Partners, Not Targets: For Vanuatu’s enterprises, especially small and medium-sized ones, VSMS simplifies record-keeping and VAT filing, reducing administrative headaches. Collins Gesa emphasizes collaboration rather than punishment, framing taxation as a shared responsibility between government and business.

5. A Cultural Shift Toward Compliance: Tax evasion once thrived in the shadows of a cash economy, but the digital paper trail changes the game. Compliance will rise not because penalties will grow harsher, but because underreporting will no longer be easy or safe. The bigger achievement, Gesa suggests, is cultural: building a modern state where paying tax is part of the national identity.

Vanuatu e-Invoicing: An Old Problem, A Modern Fix

For decades, Vanuatu’s tax structure has leaned heavily on self-assessment. Businesses were expected to keep tidy records and file truthful VAT returns. In theory, this was straightforward. In practice, in a nation where the informal sector dwarfs the formal economy, compliance was more guesswork than science. Receipts were optional, record-keeping uneven, and cash, untraceable, pliable, and ever-present. The result was predictable: government coffers ran short while a hidden economy thrived.

“We have a very small formal system compared to what we have in the informal system, which is a very huge sector,” Gesa explains. His words carry the candor of someone who has spent years watching public finances bleed out in silence. But unlike many of his peers in larger nations, Gesa did not have the luxury of waiting. Vanuatu does not levy personal income tax. VAT is its lifeline. “VAT predominantly is one of our broad-based taxes,” he says. “It has contributed very significantly in the billions… and the government will continue to rely heavily on it.” Now, it is obvious that the challenge was no longer simply about plugging leaks. It was about reforming the entire pipeline.

Borrowed From Neighbors, Tailored at Home

If you want to understand Vanuatu’s confidence in its new approach, you need only look around the region. Fiji and Samoa have already rolled out similar systems based on DTI’s Taxcore technology. Their early experiments, the hiccups and the breakthroughs, became lessons written in real time for Port Vila to study.

“We have learned quite well from our neighboring countries,” Gesa says, though he is careful to add that imitation was never the goal. The trick was to absorb what worked, skip what failed, and write rules that reflected the nation’s own quirks. “We firmly believe that whatever is done in our context… has to be tailor-made, it has to be customized to suit our own local context.”

That tailoring is where the partnership with DTI has flourished. Unlike many international consultancies that arrive with cookie-cutter solutions and leave with invoices, DTI has been unusually present. Gesa drops names, Imre, Maya, Luka, with the familiarity of colleagues, not contractors. “You guys have given us that confidence, that level of confidence and professionalism,” he says, describing a relationship that, by his account, has been “very positive” and “very promising.”

The collaboration has been powered by a dedicated local project team, a rare hybrid of domestic oversight and international expertise. The result is a system that fits Vanuatu’s peculiar e-invoicing needs, a tax net designed for an archipelago where some transactions still happen in market huts beside the sea.

Vanuatu e-Invoicing: What VSMS Actually Does

On paper, VSMS sounds like a bureaucrat’s dream: a system that records every VAT transaction in real time, creating an electronic paper trail. In practice, it means this: the next time a customer buys a meal, a ferry ticket, or a basket of taro in a participating business, the receipt issued is far more than a slip of paper. It is an e-invoice, logged instantly into the system.

For the government, the advantages are obvious. No more waiting for quarterly filings to discover discrepancies. The data arrives live, sharp, and undeniable. “The government needed to move from a patchwork of manual and semi-automated processes to what I call a full-fledged digitized solution,” Gesa says.

For businesses, the benefits are subtler but no less real. Record-keeping, once a tedious, error-prone chore, becomes automatic. Filing VAT returns becomes less about scrambling through shoeboxes of receipts and more about reconciling data already in place. In a country where small and medium enterprises are the backbone of the formal sector, the reduction in paperwork is not trivial.

“Tax should be seen as everybody’s business,” Gesa insists, signaling that the rollout is not meant to be punitive. His approach to the private sector is almost parental: firm but supportive. “We have to be seen in this process as partners… working together to make sure they do understand their obligations and they are doing what is right and what is legal.”

A Phased Rollout, Island by Island

Vanuatu’s geography makes even modest reforms a logistical puzzle. Spreading a digital tax system across six provinces means threading technology through islands where travel can depend on the tides, and where internet connectivity can sputter like a kerosene lamp.

To manage this, the rollout is deliberate, starting with Shefa Province, home to Port Vila. “It is a complex undertaking,” Gesa concedes, though not with the resignation of a man beaten down by obstacles, but with the satisfaction of one who has already started to bend them to his will.

Each phase brings not only new businesses into the system but also new lessons on how to train, communicate, and adapt. The system may be digital, but the rollout is unmistakably human. conversations with business owners, workshops, site visits, and trust-building exercises that stretch from the capital to remote villages.

Vanuatu e-Invoicing: The Promise of Data

What excites Gesa most, though, is not the paperwork saved, or the errors avoided. It is the data itself. “It’s a confirmation for Vanuatu of moving from a manual world of doing business… to a full-fledged journey,” he reflects.

Obviously, for a country with limited resources, data is the real currency. With it, policymakers can predict revenue flows, plan budgets more accurately, and even negotiate better with international lenders and donors. For the first time, the Ministry of Finance will not be guessing at the size of its economy. It will see it, receipt by receipt, transaction by transaction.

And with that visibility comes something far rarer in tax administration: trust. Citizens and businesses alike can see a government not groping in the dark but acting with knowledge. In a small nation, that shift matters.

Betting Big for a Small Nation

For a country often wrongly overlooked on the world stage, Vanuatu’s e-invoicing experiment is striking in its ambition. Larger economies have struggled for decades with digital tax reforms, often drowning in bureaucracy, lobbying, and political gridlock. Vanuatu, by contrast, has moved with a clarity born of necessity.

The stakes are enormous. Billions of vatu ride on the system’s success. Schools, clinics, roads, and ports all depend on it, especially after the large earthquake that recently shook the country. And yet, as Gesa tells it, the decision to take the leap was less about daring than about survival. Without VAT, there is no meaningful revenue base. Without accurate VAT collection, there is no fiscal future. “It’s a large bet for a small nation,” he concedes, his voice steady, his conviction firm. “But it is a bet we are making with clear eyes.”

Of course, tax evasion is as old as taxation itself, but in Vanuatu, e-Invoicing digital paper trail is already changing the calculus. A business owner who once relied on underreporting cash sales now will face an uphill battle against a system that registers each transaction as it happens.

The deterrent effect is quiet but powerful. Compliance rises not because penalties loom larger, but because cheating suddenly looks harder, riskier, and perhaps most importantly, out of step with the new norm. That, Gesa suggests, may be the greatest achievement of all: not just more money in the treasury, but a cultural shift toward paying tax as a shared responsibility.

Vanuatu e-Invoicing: Becoming a Modern State

From the outside, Vanuatu’s move might look like a modest tax reform. To those inside the Ministry of Finance, it feels closer to a cultural reset, a chance to drag a fragmented system into the 21st century and prove that even a nation of scattered islands can build a modern state.

As it has just been legislated, the e-invoicing project has not yet reached every business, nor has it closed every gap. But the momentum is unmistakable as the VSMS is starting its path. The confidence between the ministry and DTI remains high, the early project development results is encouraging, and the sense of national ownership is strong. As Gesa leans forward, his final words sound less like a bureaucrat’s talking points and more like a promise: “The relationship momentum is very high. The confidence is very high. We are moving from a manual past into a digital future. And that is the confirmation we need.”

The post Vanuatu e-Invoicing Outsmarts Grey Economy appeared first on Dti.

The meeting had two objectives: to explain the upcoming VMS enhancements and the EFD framework, as well as to address the developers’ questions in an open dialogue during the Q&A session.

Meeting details

During the first part of the meeting, Ms. Kelerayani Dawai, Compliance Director at FRCS, addressed the implementation of the new VAT requirements in the VMS system, outlining strategies to manage the ongoing changes while enhancing service delivery.

DTI’s Chief Technology Officer, Mr. Ivan Pavlovic, followed up with a detailed review of the most significant changes and key enhancements resulting from the transition from VMS version 2 to version 3. It is notable to mention that this transition is in alignment with Phase 3 of FRCS’s 2025/2026 National Budget Announcement.

Backward compatibility between v2 and v3 is assured

During this transition period, which FRCS confirmed will last until 31.12.2026, DTI ensures backward compatibility between the previous and the new system. All EFD solutions currently operating under the v2 model will continue to work with the new system until the extended transition deadline.

This measure confirms FRCS’s confidence that all vendors will adapt to the new version of the system within this timeframe and encourages them to begin adaptation and testing as soon as possible to ensure compliance within the extended timeline.

The developers who were both in the room and online openly voiced their questions to the FRCS and DTI representatives

The Q&A session

At the end of the meeting, an interactive Q&A session took place, during which vendors attending both online and in person could discuss changes, voice their concerns, and raise current issues regarding the transition from version 2 to version 3 of the VMS system.

3 key takeaways from the meeting

1. Supplier accreditation & conduct. Suppliers must apply for accreditation of POS/E-SDC (reg 8), comply with conduct rules (reg 15). Accreditation can be revoked where requirements aren’t met (reg 10).
2. Taxpayer obligations. Taxpayers must use compliant EFDs and issue fiscal invoices (regs 16–18). FRCS may audit and investigate (reg 27) and enforce compliance (reg 28).
3. FRCS (CEO) role & protocols. FRCS sets guidelines and protocols for communication/data exchange (regs 20–21) and publishes verification procedures (reg 25).

In conclusion

To ensure a level playing field and a stronger market of technically compliant solutions, DTI is providing equal technical support to every vendor and a free-of-charge accreditation process to verify compliance. We have designed this approach to enhance service quality, promote healthy competition, and provide taxpayers with a broader choice of compliant EFD offerings. Ultimately, it results in better outcomes for taxpayers.

Acknowledging the message the VMS developers conveyed to both FRCS and DTI, we reaffirm our commitment to supporting and strengthening effective communication among the three parties: DTI, FRCS, and third-party vendors.

DTI’s equal-support, zero-fee accreditation model is deliberate: it expands the pool of technically compliant solutions and raises the bar on service quality through competition. The result is better outcomes for taxpayers.

Final remarks

As a reminder, our journey in Fiji began in 2017, and since then, we have continuously supported and enhanced DTI’s flagship product, TaxCore®. DTI’s longstanding presence in the country, especially considering the rapid pace at which new technological solutions emerge, stands as a testament to the trust and strong partnership that exists between our company and Fiji’s FRCS.

Given the trust that FRCS has placed in our product, it is only natural for us to continue supporting and investing in this initiative. The recent upgrade to version 3 demonstrates that our product remains fully operational, future-ready, and continuously enhanced to address upcoming challenges. As always, we emphasize our strong commitment to fighting tax evasion.

The post DTI Meets with VMS POS and E-SDC Development Companies at FRCS’s Invitation appeared first on Dti.

In the South Pacific, where bureaucratic bottlenecks sometimes run on “Fiji time”, at the forefront of this shift is the Fiji Revenue and Customs Service (FRCS), a government agency long responsible for collecting the country’s revenue, now writing a new chapter in tax compliance with the help of Data Tech International (DTI). Together, we’ve built something the country has never seen before, a real-time VAT monitoring system that has already proven its existence.

This is the reason why we sat with Kelerayani Dawai, Director of Compliance at the Fiji Revenue and Customs Service (FRCS). FRCS is responsible for more than 85% of the government’s revenue. Now, think about that for a moment… most of the roads, hospitals, and public services in Fiji rely on one department’s ability to collect taxes accurately, promptly, and fairly.

Dawai doesn’t deal with sayings or lofty pronouncements. She talks directly about compliance, about trust, and the daily tug-of-war between what’s ideal and what’s achievable. “The truth is, we just couldn’t keep up,” she says. “The old way, checking receipts, doing manual audits, it wasn’t just inefficient. It was impossible for a country our size.” So, Fiji decided to stop chasing receipts and start receiving them, live.

Key Takeaways – Fiji eInvoicing Benchmark

1. Real-Time Data Changed Everything: Fiji didn’t wait for global consensus or donor blueprints, it went live. The VAT Monitoring System (VMS), powered by Data Tech International’s TaxCore, gave FRCS real-time access to every receipt. “We don’t have the resources to manually audit every trader,” said Director of Compliance Kelerayani Dawai. “We can’t be everywhere. But the data can be.”

2. Compliance Went from Enforced to Embraced: Initially met with suspicion, the system eventually won businesses over, not through pressure, but through proof. “We started seeing businesses that weren’t even obligated to join the system, step forward,” Dawai said. “They saw how it could help them too, not just us.”

3. Visibility Made the Difference: FRCS now sees every transaction down to the cent. This is live proof. From catching mispriced chickens to flagging misapplied VAT rates, Dawai put it simply: “We didn’t need guesswork. We had the receipts. Literally.”

4. Trust Was Built, Not Bought: Success came not just from software, but from how DTI worked with FRCS. “They learned our tempo,” said Dawai. “They adjusted. And that mattered.” Because when you’re asking a whole economy to shift its behavior, trust becomes your biggest asset.

5. The Region Is Watching: Fiji’s phased rollout and collaborative approach are turning heads across the Pacific. “We’re not telling them what to do,” Dawai said. “But we share our legislation. We share the phases. We share the stumbles and wins. Let them decide.” Because everyone wants to have keys to digital VAT monitoring and reporting success, this is why Fiji became the true eInvoicing benchmark.

The Partnership That Changed Everything

The shift began with a technological leap, but not one Fiji took alone. The real engine behind this change is the VAT Monitoring System (VMS), powered by a DTI’s platform called TaxCore. Since the early days of the FRCS/DTI partnership (2017), our team has become more like embedded collaborator than distant consultant.

This wasn’t a simple install-and-go. The road was long, occasionally bumpy, and often political. “We passed the legislation, and yes, there was pushback,” Dawai admits. Businesses didn’t like the idea of their sales data pinging over to FRCS in real time. There was suspicion, confusion, and a lot of bad information floating around. “There was resistance, of course,” she says, with the calm candor of someone who’s seen both the protests and the payoffs. “When the VAT Monitoring System was legislated, the business community didn’t understand why. They thought it was about control. But it was about fairness.”

Fairness, in this case, meant warranting every business, large or small, played by the same tax rules. Fiji, like many developing nations, leans heavily on VAT, which alone makes up nearly half the government’s income. That dependence made leakages intolerable. The solution? Not a legion of inspectors, but data, streamed directly from businesses to FRCS in real-time, via electronic fiscal devices connected to the TaxCore system.  “We don’t have the resources to manually audit every trader,” Dawai explains. “We can’t be everywhere. But the data can be.”

Still, no technology enters quietly. Businesses balked, citing confusion and cost. The pandemic didn’t help, pushing back key rollout phases. But over time, as understanding grew, so did the buy-in. Voluntary buy-in, in fact. “We started seeing businesses that weren’t even obligated to join the system, step forward,” Dawai says, smiling. “They saw how it could help them too, not just us.”

Fiji eInvoicing Benchmark: Seeing Everything, All at Once

The core idea of the VMS is simple: every transaction at a registered business sends a digitally signed and secured invoice to the tax authority. This gave FRCS something it never had before, visibility. Not statistical models or educated guesses, but live data. Down to the cents, across the whole economy. Obviously, VAT compliance improved dramatically. Audits became surgical instead of sweeping. And FRCS staff, once swamped by paperwork, could now spend their time analyzing data instead of chasing it.

But DTI didn’t just send technicians. They sent people willing to sit in meetings that lasted hours longer than scheduled and created chat platforms where junior FRCS staff could log queries directly. Focus was on relationship building. “They learned our tempo,” Dawai said. “They adjusted. And that mattered. Because when you’re asking a whole economy to shift its behavior, trust becomes your biggest asset.”

The Chicken That Shook the System

The government announced a shift from three VAT rates (15%, 9% and 0%) to a single flat rate of 15%. And just like that in 2022, prices for household staples jumped when the Budget was announced. The public wasn’t amused. Complaints poured into the Consumer Council and the Fiji Competition and Consumer Commission.

“People thought the VAT increase was the whole story,” Dawai says. “But our data told a more complicated one.” Within hours, FRCS, with DTI’s help, began generating inflationary reports using live VMS data. They zeroed in on prices for essentials, comparing them across retailers, regions, and time. One product stood out: chicken.

“Everyone eats chicken in Fiji,” Dawai says, smiling. Before the tax rate change, a standard chicken cost was around $17. The day after? Some outlets had it listed at $24. That’s not a 6% tax increase (from 9% to 15%), it’s a 40% spike. And the VMS caught it instantly. “We didn’t have to send inspectors and didn’t need guesswork. We had the receipts. Literally,” Dawai says. The system had teeth, not through threats, but through facts.

This digital accountability didn’t stop at chickens. When VAT rates were misapplied at checkout, sometimes by mistake, sometimes not, the system flagged it. When shops tried to play fast and loose with refunds or returns, TaxCore catches the anomalies. No need for dawn raids or paperwork marathons. Just data, flowing in real-time, scrutinized by analysts who focus on the signal, not the noise.

Fiji eInvoicing Benchmark: Why the Region is Paying Attention

Interestingly, word got out. Other countries, Papua New Guinea, Vanuatu and others, have started reaching out. Not for software, but for strategy.  “We’re not telling them what to do,” she insists. “But we share our legislation. We share the experience. We share the stumbles and wins. Let them decide.” Because this isn’t about showing off, it’s about building something that works. The FRCS isn’t trying to lecture the world. But if you’re looking for a small country that did something big with tax reform, this is where the real lessons live. This is how Fiji became the eInvoicing benchmark in the region, and maybe, even beyond!

It helps that FRCS took a staggered approach, three phases, each onboarding specific business sectors. Phase 3, the final one, is awaiting gazette approval. But Dawai’s vision goes beyond phases. She sees a future where every business in Fiji, formal or informal, issues digital invoices. A future where even the smallest roadside vendor knows exactly what they earned last month and how much tax they should (or shouldn’t) be paying. That shift, from suspicion to cooperation, might be the system’s biggest success. It’s not just about collecting revenue. It’s about changing relationships, and this is why other countries are following closely.

The Road Ahead

Phase 3 of the VMS is next. Dawai expects it to expand to more sectors, more businesses, and eventually, become the national norm. “This isn’t just about revenue,” she says. “It’s about giving small businesses tools they never had before. It’s about bringing the informal sector into the fold. And yes, it’s about making tax fair for everyone.”

When asked what advice she’d give to other revenue authorities, Dawai doesn’t hesitate. “Know your goal. For us, it was voluntary compliance. Not just more tax, but better tax. That’s what this system delivered.”

She doesn’t talk in slogans or strategies. She talks about what’s working. What’s changing. What’s possible when government stops chasing taxpayers and starts listening to the data.

The Example No One Saw Coming

What Fiji has done with the VMS, with TaxCore, with DTI, is nothing short of remarkable. In a region often written off as a footnote in global reform conversations, they’ve become a reference point. “It speaks volume in terms of how such a system can influence a tax system or reporting framework for a developing country like ours,” Dawai said. “Data is powerful nowadays. If you’re able to sit in the office and get information on a dashboard, all those reports… it changes everything.”

The old enforcement model, she said, was labor-intensive and often late. “We don’t have resources, we can’t police everybody, we can’t go and check individual records. It’s very expensive.” But the digital solution “was the option the government needed to take.”

The results are measurable, but perhaps more striking is the shift in tone. Compliance, Dawai said plainly, is no longer feared. “Right now, there is a great appreciation of the change that has taken place,” she said. “People appreciate that VMS is here to stay.”

And for Dawai, who has been tasked with upholding laws and closing revenue gaps, the bottom line is clear. When asked to sum up the biggest value of the VMS, she didn’t hesitate. “As a Director of Compliance, I really support this. And in that one word: it’s compliance!”

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Theresa Kyoto Amosa, the Assistant Chief Executive Officer for Policy Performance & Improvement Division at the Ministry of Customs & Revenue Samoa, is at the heart of this fiscal transformation. Speaking with a clarity and enthusiasm that would make even the most jaded tax lawyer perk up, she paints a picture of a nation undergoing a significant and positive shift. “In a nutshell,” Amosa explains, describing her role, “my role is essentially to provide tax policy advice to government… and we are also the analytical arm of the ministry, so we analyze all the data that’s collected.” It was through this analytical lens that the need for a more vigorous system became glaringly obvious.

The introduction of the Tax Invoice Monitoring System (TIMS) wasn’t exactly met with open arms, as Amosa readily admits. “Yes, there was definitely a lot of resistance,” she recalls. For a country with a significant cash economy and a reliance on manual processes, the idea of embracing technology in everyday business operations presented a considerable hurdle. “It’s very hard for our local people to accept the idea of using technology in their everyday business operations,” she states. This resistance wasn’t limited to taxpayers; even within the ministry, a learning curve existed.

Key Takeaways

1. Data-Driven Problem Identification is Crucial: Samoa’s journey began with a clear understanding of the problem. A 2019 tax gap analysis revealed a significant discrepancy between registered taxpayers and those filing returns, highlighting substantial underreporting. This data-centric approach provided the impetus and justification for implementing a new system.
2. A Committed Technology Partner Makes All the Difference: The collaboration between the Ministry of Customs & Revenue Samoa and Data Tech International (DTI) was a cornerstone of their success. Amosa consistently emphasizes DTI’s proactive attitude, commitment to successful implementation, and willingness to go above and beyond their contractual obligations. Selecting a technology partner truly invested in the country’s success, not just in making a sale, made all the difference.
3. Real-Time Monitoring Fosters Compliance and Increases Revenue: The core functionality of TIMS, its ability to monitor transactions in real-time by directly linking businesses’ sales points to the tax authority, had a significant impact. This transparency changed taxpayer behavior. Knowing their sales were being monitored, businesses became far more willing to report their true earnings. This direct oversight led to a noticeable increase in revenue collection.
4. Addressing Resistance Through Collaboration and Support is Essential: Implementing a new digital system inevitably faces resistance, both from taxpayers accustomed to manual processes and from within the implementing organization itself. Samoa tackled this by working closely with DTI, who provided crucial support in developing training materials and helping the ministry define internal roles and responsibilities.
5. Transparency and Accuracy Build Trust in the Tax System: Ultimately, the success of Samoa’s fiscalization efforts, driven by TIMS, boils down to enhanced transparency and accuracy in the tax system. Thru minimizing human intervention and providing a clear, auditable record of transactions, TIMS reduced opportunities for errors and deliberate underreporting

Driven by Data: The Analysis That Sparked a Fiscal Revolution

However, the Ministry, guided by Amosa’s division, understood the pressing need for change. A 2019 tax gap analysis had revealed a startling discrepancy between registered taxpayers and those actually filing returns. “There was a huge gap, a huge discrepancy,” Amosa emphasizes, highlighting the significant risk of underreporting. The promise of TIMS, with its ability to monitor transactions in real-time, offered a sign of hope in closing this gap.

Samoa fiscalization journey wasn’t without its bumps, but the collaboration with Data Tech International proved to be the cornerstone of their success. Amosa speaks highly of their partners, noting their “just attitude towards implementation” and their commitment to a successful rollout. DTI’s proactive approach, from developing training materials to assisting in defining internal roles, was instrumental. “One thing that I’ve actually picked up from DTI is the commitment that you have to really benefit our internal processes from the use of the tax invoice monitoring system,” she remarks. Amosa highlights that such dedication is rare, especially when compared to their past experiences with other technology vendors.

Proof in Numbers: Samoa Fiscalization Delivers Undeniable Impact

So, what tangible improvements has TIMS brought to Samoa? According to Amosa, the impact on revenue collection has been undeniable. “I can honestly say that the implementation of the tax invoice monitoring system has contributed to the increase in our revenue collection,” she states confidently. Remarkably, this increase was even evident during the height of the COVID-19 pandemic. The reason? A shift in taxpayer behavior. “Once taxpayers were aware that we were actually monitoring their sales, they started declaring their actual sales in their tax returns,” Amosa explains. The direct connection between their daily transactions and the ministry’s oversight fostered a new sense of accountability.

Beyond the impressive numbers, Amosa shares a compelling anecdote that underscores the human impact of TIMS. She recounts the experience of a large tobacco manufacturing company, a significant contributor to excise taxes. Initially facing accreditation complexities due to being part of an international chain, the company found a dedicated partner in DTI. Amosa vividly describes how the DTI team, even across time zones, worked tirelessly with the company’s EFD component developer to devise a solution that ensured full compliance. This collaborative spirit not only resolved a technical hurdle but also fostered a positive relationship with a major taxpayer. Furthermore, the company itself found value in the system, using the data available on the taxpayer admin portal for their own sales analysis. “This is all evidence-based, and they could monitor their sales, and that has really helped them,” Amosa notes.

Moreover, the new evidence based and compliance driven regulation around TIMS has greatly impacted enrichment and cleansing of existing taxpayer’s registry. Without enforcement efforts Samoa has managed to bring taxpayer’s database to accurate state and assisted taxpayers in maintaining clean records.

Samoa Fiscalization Success: A Strong Partnership with DTI

From the Ministry’s perspective, TIMS has proven to be a powerful tool in detecting and addressing non-compliance. Amosa reveals, “I can say for a fact that we’ve had a number of audit cases where we have detected deliberate underreporting by a few of our large companies.” The consequence of this newfound transparency? These companies had to pay the shortfall along with penalties, sending a clear message about the seriousness of tax evasion.

The implementation of TIMS has also advanced a more proactive approach to tax compliance among businesses. Amosa observes a significant change in how taxpayers interact with the tax system. “Tax compliance has definitely improved,” she asserts. “I reiterate the fact that taxpayers actually now make an effort to read our tax laws and comply because just knowing that now the ministry has this tool to monitor them on a daily basis, it actually influenced their behavior as well.” The days of the ministry having to relentlessly pursue non-compliant taxpayers are gradually receding. “Before we actually had to chase down taxpayers because they weren’t filing on time, they weren’t paying on time, and we didn’t have the resources to put together evidence to pursue further actions… that has definitely changed since the implementation of TIMS,” Amosa affirms.

Going Above and Beyond

The bedrock of this success story is undeniably the strong working relationship between the Ministry and Data Tech International. Amosa describes it as “very positive and efficient.” She highlights DTI’s responsiveness and their willingness to go above and beyond. “One thing that I do appreciate is that there have been several occasions where we’ve been requesting for reports that are not part of the standard reports in the back end… and Data Tech International has always had a very positive attitude towards helping us,” she explains.

DTI exemplifies a collaborative spirit, proactively suggesting new ways to enhance Samoa fiscalization processes and boost compliance, a refreshing change from vendors who merely deliver a product and walk away. “I feel that DTI actually is genuinely committed to making sure that Samoa benefits from the system,” Amosa emphasizes.

Samoa Fiscalization: The Power of Automated Data Transmission

When asked what specifically about TIMS, powered by TaxCore, stood out among other digital tax solutions, Amosa points to the direct link it created between a business’s sales points and the Ministry’s back-end office. “This is the first time that Samoa is equipped with a tool that would directly link a business’s point of sale to the back-end office,” she states. This direct connection minimizes the possibility of human error or manipulation of data. “I think that is what really made us believe in how much we could benefit because… the methods that we had used previously still couldn’t provide us with this… direct linkage.” Automatically transmitting sales data delivers a new standard of transparency and reliability that was once out of reach.

On the regulatory front, DTI’s support was equally invaluable. Amosa credits them with providing the necessary information and materials that enabled their legal team to draft the Regulations for TIMS with remarkable speed. “DTI really presented to us in a manner that would help our legal team draft up the regulations really quickly,” she notes, emphasizing the efficiency of the process.

Amosa’s Conclusion: The Power of Partnership and Transparency

Subsequently, Amosa offers valuable advice for other countries considering modernizing their tax systems. The biggest lesson learned from Samoa’s experience? Strong collaboration and choosing a technology partner genuinely invested in the country’s success have proven essential to driving meaningful progress. Furthermore, for Samoa fiscalization, clear communication and proactive engagement with taxpayers are crucial in overcoming initial resistance.

As for the future of TIMS in Samoa, Amosa hints at further expansion and the introduction of new features to continue strengthening tax compliance. Samoa is actively driving its fiscal modernization forward, building on the success of its TIMS implementation and a strong partnership with Data Tech International to shape a more transparent and efficient tax system.

Finally, when asked to summarize the biggest benefit of TIMS in one sentence, Amosa doesn’t hesitate: “The biggest benefit of TIMS is the enhanced transparency and accuracy it brings to our tax system, leading to increased revenue and improved compliance.”

For other tax authorities contemplating a similar leap, Amosa offers this crucial insight: “The most important thing I’d want them to know is the significance of choosing a partner who understands your unique context and is truly committed to working alongside you to achieve your goals, just as Data Tech International has been for Samoa.”

In Samoa, that common sense has already paid dividends. Revenue collection is up, taxpayer disputes are down, and donor partners now view the nation as a proof-of-concept for transparency. “We’re a small country,” Amosa concludes, “but we’ve made a big point: Trust isn’t built on goodwill alone. It’s built on systems that leave no room for doubt.”

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The Vision and the Path Forward

The Vanuatu Sales Monitoring System (VSMS), driven by TaxCore®, embodies a visionary leap forward towards tax compliance. It leverages secure, encrypted invoices transmitted automatically from accredited Electronic Fiscal Devices (EFDs) to DCIR. This infrastructure facilitates real-time synchronization, monitoring, and auditing, significantly boosting transparency and tax compliance.

Strategic Recommendations

Drawing on our global expertise, we’ve proposed targeted recommendations to secure the project’s success:

• Legislative Preparations: Finalizing regulations and ensuring they harmonize with existing legal frameworks.
• Data Quality Initiatives: Launching a taxpayer registry cleanup campaign.
• Risk-based Implementation: Prioritizing implementation in high-revenue areas.
• Compliance Task Force: Establishing a dedicated compliance and audit team within DCIR.
• Public Awareness Campaign: Rolling out a comprehensive, multilingual communication strategy.
• Support for POS Upgrades: Offering technical support for businesses to upgrade their point-of-sale infrastructure.
• Enhanced Regional Support: Establishing regional enrollment centers.
• Accessible Web and Mobile Solutions: Providing free invoicing solutions optimized for local infrastructure.
• Customer Compliance Incentives: Introducing the Customer Compliance Award to encourage consumer participation.

Hon. Johhny Koanapo Rasou, Vanuatu’s Minister of Finance and Goran Todorov, DTI’s CEO

Infrastructure and Legislative Preparedness

The successful implementation depends heavily on digital infrastructure readiness and clear legislative support. With digital signatures and secure recordkeeping backed by TaxCore®, VSMS will meet stringent standards outlined in Vanuatu’s Electronic Transactions Act and Tax Administration Act, enhancing enforceability and compliance.

Taxpayer Compliance and Behavioral Change

Observations from previous monitoring exercises indicate taxpayers respond positively to active oversight. VSMS provides proactive, continuous verification, significantly improving detection and reduction of tax evasion and fraudulent activities.

Final Thoughts

Our project with DCIR involves capacity building and implementing VSMS, powered by TaxCore®. By fostering transparency, securing revenues, and enabling fair market competition, this system positions Vanuatu’s tax administration among the most progressive globally.

We at DTI are committed to this transformative journey, confident in VSMS’s ability to create lasting benefits for the government, businesses, and citizens of Vanuatu for years to come.

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Elevating EBM as a Pillar of Tax Compliance

A decade ago, I contributed to the development and deployment of the Electronic Billing Machine (EBM) system in Rwanda, a pioneering initiative that revolutionized the country’s approach to tax compliance. Designed to combat underreporting and tax fraud, the EBM system became a cornerstone of Rwanda Revenue Authority’s (RRA) efforts to enhance revenue collection and foster new culture of compliance among taxpayers. Today, its success serves as an inspiring model for other African countries grappling with similar challenges.

During the ATAF Annual Meetings, the emphasis on scalable and replicable solutions resonated strongly with the vision behind the EBM system. My discussions with representatives from member states revealed a growing interest in adopting e-invoicing systems as a means to modernize tax administration frameworks and reduce the shadow economy’s impact on national revenue.

TaxCore®: A Game-Changer in Revenue Assurance

TaxCore®, the flagship product of DTI, has emerged as a global benchmark in secure and flexible revenue assurance systems for tax authorities. Designed to seamlessly integrate with existing tax ecosystems, TaxCore® enhances transparency, simplifies compliance processes, and minimizes administrative burdens. During the meetings, I had the opportunity to showcase how TaxCore® aligns with ATAF’s broader goals of leveraging digital technologies to create efficient, fair, and accountable tax systems.

Particular attention was given to the system’s ability to support real-time reporting and analytics, enabling tax authorities to proactively monitor compliance trends and address gaps. In light of the ATAF outcome statement’s call for innovative solutions to improve tax revenue collection, TaxCore® stands as a practical tool for achieving these objectives.

Driving Forward E-Invoicing Initiatives

E-invoicing emerged as a focal point of the ATAF Annual Meetings, with member states expressing a collective commitment to advancing digitalization in tax administration. My approach highlighted the synergies between the EBM system and e-invoicing initiatives, demonstrating how these solutions can transform tax compliance landscapes while fostering economic growth.

The discussions underscored the importance of capacity building and collaboration among ATAF member states to ensure the successful implementation of e-invoicing systems. Drawing from DTI’s extensive experience in delivering tailored fiscalization solutions, I proposed strategies for phased adoption, emphasizing the value of stakeholder engagement and robust technical support.

Strengthening Partnerships for a Digitally-Driven Future

The ATAF General Assembly meetings in Kigali also provided an invaluable platform to strengthen partnerships with key stakeholders, including international organizations, regional economic communities, and private sector players. These collaborations are essential to scaling up e-invoicing initiatives across Africa and achieving sustainable tax revenue growth.

As a firm advocate of continuous improvement in tax systems, DTI remains committed to supporting ATAF’s vision of fostering inclusive development through effective and innovative tax administration. By leveraging the proven success of the EBM system and the advanced capabilities of TaxCore®, we aim to empower tax authorities to navigate the complexities of a digital economy with confidence and resilience.

Conclusion

In conclusion, the ATAF General Assembly 2024 reaffirmed the transformative potential of digital tax administration solutions in addressing Africa’s revenue challenges. In other words, through pioneering systems like Rwanda’s EBM and DTI’s TaxCore®, we are demonstrating that innovation and collaboration can drive meaningful progress in enhancing tax compliance, transparency, and efficiency. That is why, as we look ahead, the momentum generated by this event serves as a catalyst for advancing e-invoicing initiatives and building resilient tax ecosystems across the continent.

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TaxCore© is at the forefront of digital tax transformation, integrating data from fiscal devices into a unified, real-time system that allows tax authorities to track financial transactions, identify irregularities (using AI), and plan audits effectively. Given the volume of collected data, which includes information on hundreds of thousands of taxpayers and records over 15 million new invoices daily, the system requires the application of advanced processing and analysis methods, such as data mining and modern analytical approaches. Advanced analytical methods enable detailed and rapid analysis, pattern identification, and decision-making based on a large volume of data. The large database provides a comprehensive overview of tax activities but simultaneously poses a challenge for efficient and timely searching and analysis.

For tax authorities to identify irregularities and plan inspections, the new advanced functionality of TaxCore© in the form of an AI module employs sophisticated technologies and algorithms for more detailed processing and data analysis. The application of machine learning (ML) methods to large databases allows in-depth analysis of the chronological behaviour of taxpayers, based on which the system forms risk categories for taxpayers. Patterns of taxpayer behaviour serve as historical indicators of various attributes, according to which, depending on the degree of alignment with recognised patterns, the system assigns taxpayers an appropriate risk level. Some of the behavioural patterns on which TaxCore© profiles taxpayers include the percentage of working days with no issued invoices, deviations in taxpayers’ financial transactions compared to the average trend of financial transactions in their activities, active working hours of the taxpayer during a period, etc.

AI-Powered Risk Assessment and Tax Audits

Since each type of fraud leaves certain “traces” in the data, TaxCore© offers a 360-degree view of taxpayer behaviour, monitoring their actions through defined patterns. Based on the established risk level for each defined pattern, we obtain a cumulative risk score for the taxpayer as an aggregate of their individual risk levels in behavioral patterns. This part of the system represents a significant business value of the TaxCore© platform, especially concerning support for audit work in tax administrations. Such a view of the taxpayer enables detailed analysis and is particularly useful in the risk analysis sector, aiding in the identification of potential tax evasion and determining priorities for tax controls and actions. This level of automation and analytical power directly contributes to the success of tax administrations in recognising tax risks and acting timely, thus optimising processes and increasing efficiency in conducting tax controls.

Artificial Intelligence for Irregularity Detection

One of the key innovations in TaxCore® is its use of AI algorithms to analyse fiscal data and flag potential cases of tax evasion. These AI models automate the detection of unusual financial transactions, reducing the need for  manual analysis and minimising the risk of human error. Tax Inspectors and analysts can now focus their efforts on high-priority cases, leading to more efficient allocation of resources and a better overall management of tax risks.

Traditional methods often required time-consuming manual work, which left room for oversight. In contrast, TaxCore’s AI-driven system offers automation and improved precision, allowing for quicker and more accurate detection of irregularities and significantly greater accuracy in predictions.

Balancing Artificial Intelligence and Human Expertise

While the AI algorithms in TaxCore© provide deep insights into taxpayer behavior, human judgment still plays a critical role. The system flags potential irregularities, but the final decision on what actions to take rests with tax inspectors. This balance ensures that AI enhances the decision-making process without completely removing the human element, allowing tax authorities to maintain a fair and contextual approach when addressing non-compliance.

Isolation Forest and KMeans for Anomaly Detection

TaxCore© employs a powerful combination of KMeans clustering and Isolation Forest algorithms (enhanced by the use of AI) to detect irregularities. KMeans groups taxpayers based on similarities—such as the number of fiscal invoices issued daily—while Isolation Forest identifies anomalies within these clusters. This dual approach allows for efficient detection of outliers, ensuring that tax authorities can quickly identify taxpayers whose operations deviate significantly from the norm.

For instance, if a taxpayer’s invoice volume suddenly spikes or drops compared to their historical average, the system flags them for further review. This method significantly improves accuracy in detecting fraudulent activity while reducing the number of false positives.

Forecasting Tax Obligations with the Prophet Algorithm

Beyond anomaly detection, TaxCore© also utilises the Prophet algorithm (based on AI) to forecast taxpayer sales volumes and predict when will the system cross certain thresholds for instance on a monthly or annual basis. This is particularly useful for identifying taxpayers who may try to stay just below certain tax brackets to avoid higher liabilities. By predicting sales trends, tax authorities can monitor businesses more effectively and ensure compliance with tax regulations.

Clustering Similar Taxpayer Behaviour with Kohonen Networks

The system uses Kohonen networks to cluster taxpayers based on similarities in their transactions, recognizing and analyzing patterns in operations. This approach generates a two-dimensional map where each point represents a cluster of similar transactions, facilitating visualisation and identification of specific taxpayer behavior patterns. This effectively identifies deviations that may indicate potential irregularities. By utilizing input parameters such as invoice issue date and time, sales amounts, and refunds, the system groups taxpayers based on similarities. For such parameter selection, dominant time periods for invoice issuance are identified, as well as the analysis of the sales structure in relation to refunds. Clusters also aid in recognizing taxpayers showing deviations, such as those with disproportionately high refunds relative to sales. Taxpayers appearing in multiple clusters require closer examination, while those stable within one cluster may be less suspicious, but it remains important to analyse the reasons for their activity during certain periods.

Conclusion

As we strive for digitalization and modernization, leading to an increased use of information technologies, big data becomes a new type of resource in business. The TaxCore© system uses large databases as a key tool for improving business processes and increasing productivity in the public sector, as well as for preventing tax evasion. Through sophisticated algorithms and machine learning, TaxCore© efficiently detects irregularities at the sales points, enabling tax authorities to monitor fiscal transactions in near real-time and quickly identify attempts at tax evasion. Rather than relying on subjective judgment, tax administrators now have access to data-driven insights that help them allocate resources more effectively and focus their efforts where they are needed most.

In-Depth Analysis and Management of Tax Risks

By forming and processing these databases, detailed analysis of collected data on financial transactions and the application of machine learning are enabled. Machine learning methods are ideal for mining large databases and identifying patterns based on historical indicators of tax operations.

More Objective Risk Assessment and More Efficient Tax Controls

Identifying and managing risks, as a significant part of the tax system, is often a subjective process. However, by applying certain methodologies and patterns, it is possible to achieve a higher level of objectivity and precision in decision-making. By using real data from the TaxCore© database and defined scenarios, a taxpayer would be assigned a certain categorization of importance or risk level. This would allow ranking taxpayers according to their risk scores and, with expert experience, achieve a more reliable and objective risk assessment.

Macro and Micro Perspectives: From the Tax System to Individual Taxpayers

With the verification of financial transactions and the collection of data on all taxpayer transactions within the tax system of a country, TaxCore© enables a shift from a macro view, i.e., analysis of the entire financial system of the country, to a micro level, where individual taxpayers representing potential risks are singled out and proposed for further inspection. The capability that the system provides is an insight into the historical behavior of taxpayers, assessing the extent to which their operations align with defined patterns, as well as applying machine learning to identify and isolate taxpayers whose financial activities would require further analysis. The data generated in this way serve as a basis for additional investigations, significantly improving the efficiency and accuracy of tax control.

The Future

TaxCore© has been focused on collecting fiscal data from the field under all conditions, excelling through the application of innovative technologies, such as private blockchain for security elements, as well as enabling systems that generate invoices created using various technologies over a long time span to easily adapt and connect with TaxCore©.

With the development of AI and ML, the focus of the entire development is shifting from acquisition to data analysis, pattern recognition, and rounding out the entire TaxCore© into a tool that will enable inspectors to fight against tax evasion most efficiently, while assisting taxpayers in easily and affordably complying with fiscalization rules and preventing unintentional errors that may occur in business.With the advancement of Large Language Models, for the first time, communication between humans and systems using real natural language has become possible. This has opened the opportunity for TaxCore©, in the next step, to unify raw data about taxpayers, transactions, analysis results derived from machine learning, other public data sources, and expose all of this to individuals who will communicate with TaxCore© in the simplest way – in their native language.

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The year holds special significance as it marks the tenth anniversary of Serbia’s intensified efforts against tax fraud. Minister Mali emphasized that a comprehensive review of the fiscalization measures and methodologies implemented over the past decade is underway. The results illustrate the growing effectiveness of eFiscalization in streamlining tax compliance and ensuring fairer business practices across the country. As Serbia continues to tighten its fiscal policies, the long-term impact of these efforts may serve as a model for other nations seeking to modernize their tax systems and reduce informal economic activities.  

eFiscalization: A Key Weapon in Serbia’s Fight Against the Grey Economy

During the press conference, Minister Mali underscored the importance of eFiscalization, ranking it among the ten most effective government measures to combat the grey economy. The system allows fiscal cash registers to report fiscal invoices in real time, notifying both citizens and the Tax Administration of any discrepancies. This real-time reporting empowers the Tax Administration to conduct more targeted audits, increasing efficiency and transparency in tax collection.

Mali also highlighted broader reforms, including the overhaul of inspection supervision and the adoption of an EU-compliant Law on Public Procurement. These initiatives are designed to modernize tax and financial systems, with a significant milestone on the horizon—the development of a unified tax application. Within two to three years, Serbian citizens will have a centralized platform to manage all their taxes, allowing them to track their obligations and ensure compliance more easily.

eFiscalization Powering Tech-Driven Audits

The annual report from the Serbian Tax Administration (STA) showcases how technology, through eFiscalization, is revolutionizing audits. The STA leverages machine learning and artificial intelligence to identify non-compliant taxpayers, vastly improving its effectiveness in curbing tax evasion. Every day, the system processes over 10 million fiscal invoices, providing invaluable data such as taxpayer identification, transaction type, and QR codes for verification. This wealth of information allows tax inspectors to approach field audits with detailed insights, making their efforts more precise and efficient.

In 2023, Serbian tax inspectors conducted 8,640 field audits. The results were striking: non-compliant taxpayers faced stiff penalties, including temporary bans on operations for failing to issue electronic fiscal invoices. A total of 4,466 businesses, accounting for 43.44% of retail shops, 39.23% of hospitality businesses, and 10.23% of bakeries, faced penalties. For more serious violations, 488 businesses were temporarily shut down for up to 90 days, with 19 facilities closed for an entire year.

Successes and Challenges: Compliance and Risk Mitigation

While eFiscalization has brought significant successes in curbing tax evasion, there remains a pressing challenge in how the tax administration applies penalties. Recent data from the Serbian Tax Administration (STA) indicates that over 60% of inspected businesses were found non-compliant. The response has been swift and strict, with severe penalties including temporary closures of business operations. However, such measures can create a barrier to fostering a more supportive relationship between the STA and businesses that may simply need additional guidance on compliance.

In our opinion, the STA should consider revisiting its penalty statutes to create a more balanced approach. Rather than relying heavily on punitive actions like temporary business closures for misdemeanors, there should be room for tax inspectors to engage in dialogue and provide sensitization around tax obligations. This would encourage greater understanding and voluntary compliance among businesses, particularly those that may struggle with complex regulations.

By shifting focus from strict penalties to a more educational, supportive approach, the STA could foster a climate of cooperation, helping businesses comply without the risk of severe disruptions. Such a strategy would not only benefit taxpayers but also improve the long-term efficiency and fairness of Serbia’s tax system.

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