HOW TAXCORE WORKS
Electronic revenue reporting system TaxCore is specially designed to give the Tax Authority a secure solution, flexible and convenient for taxpayers and consumers alike
Seven underlying principles for the electronic solution
Same conditions for all taxpayers – fair business
Simplicity of operation for Tax Authority, taxpayer and consumer
Minimum administrative burden and cost of compliance for taxpayers
Transparency of cooperation between the Tax Authority, suppliers and taxpayers
Incentivised public participation in invoice verification – raised awareness
Secure anti-fraud measures
Minimum cost for the Tax Authority
Taxpayer enrolment
Each taxpayer registered with the Tax Authority (TA), will receive a personalized smart card that can be used for logging to TAP, using a secure PIN chosen at the beginning of the enrolment.
The account is searchable, with a log of every invoice issued by the taxpayer. It also displays a number of useful aggregate functions that at any time provide the taxpayer with a detailed status overview.
Cost to the taxpayer ZERO
Digital certificate
The taxpayer obtains a digital certificate in the form of a smart card or a file, issued by authorised certificate authority. This secure element (SE), ensures complete Tax Authority (TA) control. The smart card may be personalised to the company’s design.
Cost to the taxpayer $20-30
Electronic Fiscal Device, EFD
The taxpayer may choose any authorised Electronic Fiscal Device (EFD), tailored to company size and activity. An EFD consists of one or more Point of Sale devices (POS), connected to a single Sales Data Controller (SDC). A physical SDC can support up to 4 POS units (due to smart card chip speed constraints).
Point of Sale device, POS
The sales cashier enters sales data into the Point of Sale (POS). The POS may be a dedicated cash register that prints a receipt, or another device that may contain functions that assist the taxpayer with sales analysis and stock control. It may also be an app installed on a computer or smartphone – taxpayers can download an app free of charge from iTunes or Google Play.
Cost to the taxpayer $0 – $x,000 depending on sophistication and company size
Sales Data Controller, SDC
The Sales Data Controlles (SDC) may be an accredited electronic device (E-SDC) purchased by the taxpayer and authenticated by the independent smartcard secure element (SE), or a virtual device (V-SDC) provided by the TA, and accessed over the internet. Whether E-SCD or V-SDC, the SDC connects to the TA TaxCore server. The SDC:
- receives updated rates of tax and other levies
- calculates tax and levies on the sale, and composes an invoice
- sends encrypted sales data to the TA
- receives an ‘audit’ confirmation from the TA
- provides data to the POS to print a fiscal invoice.
Total cost to the taxpayer: From around $20, according to choice
Data Entry
The sales cashier enters the sales data into the Point of Sale.
- For B2B transactions, the customer’s Tax Identification Number (TIN) must be entered.
- Each cashier has a unique personal ID for data entry.
Issue of invoice
The Sales Data Controller issues an invoice. This can be printed by the Point of Sale, or on a separate, ordinary printer, and given to the customer. It can also be given as an electronic invoice in pdf format, and delivered by e-mail or a messaging app such as Viber, Skype, WhatsApp etc.
The invoice contains all relevant data on the sale and on taxes and other levies in easily readable form. The customer can immediately check this information.
The invoice also contains a QR code that can be scanned by the customer to take part in the national lottery.
Data transmission
An online E-SDC or a V-SDC transmits the sales data to the Tax Authority immediately. The E-SDC sends flexible data packets, reducing transmission bottlenecks.
If the Internet service is weak or intermittent, an E-SDC transmits the data the next time the internet works. If there is no Internet at the point of sale, the data can be saved to a USB flash drive, and taken to any other Internet-connected device for transmission (e.g. at the local Internet café), or delivered physically to the Tax Authority.
Audit confirmation
The Tax Authority receives and checks the sales data, and returns an ‘audit’ confirmation. If there is any discrepancy, the Tax Authority returns an indication of the problem. The taxpayer always knows that their transactions are validated and their account with the Tax Authority is clear of any trouble.
Verification
The greatest anti-fraud measure is public awareness.
The customer immediately receives a bill with all tax elements clearly defined. Now, or later, the customer can scan the QR code with an ordinary smartphone, sending the data to the Tax Authority, and taking part in the awards or benefits advertised by Tax Authority (eg. Lottery).
Training and Support
The TaxCore team provides training for the Tax Authority personnel in the form of demonstrations and webinars. Further materials for taxpayers are available on the Tax Authority web site or TaxCore Help Centre, a main information hub.
Development of devices
TaxCore provides clear interface specifications and instructions to developers of Point of Sale and E-SDC devices. A device must meet these specs to be accredited.
This enables any developer to compete on price and quality, ensuring a fair, competitive business environment that stimulates innovation and lowers prices.
TaxCore provides a development portal for vendors, that assists them in checking compliance, testing devices and bringing new products to market.
3rd Party data consumers
Principles for provision of aggregated (de-personalised) data to public and private users are set by policymakers in the country’s law. Regulations stipulate data types and fees.
TaxCore’s analytics database provides easy access to authorised users at a small cost. This service encourages academic research, and innovative products and services optimally designed to serve the public.
Customer Compliance Award
The greatest anti-fraud measure is public awareness.
The lottery works on a ‘scratch-n-win’ basis: you know immediately if you have won, and what prize you can expect. Sectors at greater risk (restaurant, construction etc.) are advertised as having a better chance of winning.
Valuable prizes
The Tax Authority can purchase prizes, or receive them as promotional items from public or private providers. Goods and services provided are displayed on the Tax Authority’s portal, a valuable marketing tool for the donor:
Prizes can be many: theatre tickets, phone top-ups, a haircut, a washing machine, dinner for two, groceries, a massage or holiday.
A specially targeted prize may be a tax-free purchase the next time the customer shops at the same place – a stimulus to customer and taxpayer alike.
Any customer is motivated to scan and see. Every customer becomes a tax inspector!
Typical cost to the Tax Office – x% of tax revenue increase
Secure anti-fraud measures
Zapper- and Phantomware-proof
The essential feature is the presence of the Secure Element (SE) with the Sales Data Controller (SDC). The SE data is encrypted and can be accessed only by the Tax Authority. It contains registers that record elements of all transactions since the last Tax Authority audit. Each transaction summarizes the previous ones.
Any illegal Zapper or Phantom software cannot delete transactions, neither as they occur nor in a later session, because the Secure Element (SE) registers hold evidence of the original sales. At the next transmission to the Tax Authority, TaxCore would receive updates of the Secure Element registers and all missing invoices would be accounted for.
The Secure Element also transmits data when the Point of Sale (POS) is used in training mode, with the trainee identified. Any abnormal patterns are evident.
If a smart card is stolen together with its PIN code, the rightful owner can immediately block its use.
A copied invoice scanned by a customer will flag up double use at the Tax Authority (TA).
One of the registers in the SE sets a maximum number of transactions between audits. The TA can set this at will, according to its risk assessment.
Encrypted sales data and summaries are also present in the encrypted QR code on each invoice. The customer is encouraged to scan the invoice to take part in a valuable lottery, limiting the scope for collusion. The data is transmitted to the TA, so any later tampering will be known.
B2B invoices contain payee ID. Cross-audit has never been so easy.
When tax information is displayed on the bill, you know that tax has been recorded by the Tax Authority for payment.