What Is the Ultimate Goal of the Customer Compliance Award program?

Customer Compliance Award program certainly didn’t come out of anywhere, it is a result of a decade worth nerve-wracking and trying to find a way how to stop tax evaders. The ultimate point of the receipt is to protect the buyers’ rights, and that was its main goal ever since the beginning. By receiving the receipt, a customer knows exactly what they spent their money on, if there was a potential mistake in numbers, and if there were anything to be claimed for income tax refund.

However, as ambitious as this goal was in the beginning, not many countries went the same path. In developed economies, receiving a receipt regardless of if one’s purchasing goods or services, is mandatory. Moreover, customers will usually ask for one if by any chance they aren’t handed out. Unfortunately, this practice is not so common in the developing countries. To make things even worse, recent studies shows that receipt started to lose its worth in the 1^st world economies too as campaign to go paperless is waged intensively. It had started to become only a worthless piece of paper that people would take only out of habit, but most recently even that’s affected by the risk of Covid-19 virus transfer through paper.

So, in most countries we find that culturally people don’t ask for receipts, as asking for a receipt is often considered rude and as an act of mistrust. So, how can this mindset be changed? Surely only explaining to people why they should request a receipt won’t be enough?

And that’s where the CCA program comes in.

CCA Is Making the Receipt Valuable

The whole idea of the CCA program is to make receipts more valuable to the consumers, at least psychologically. This program has for a plan to create a type of customer lottery, where requesting and scanning a receipt can be rewarded with a pricy award.

The new receipts in the countries where TaxCore operates come with a QR code at the bottom; the purpose of it is to be scanned. By scanning it, the customer gets the right to take part in a lottery where they can win anything from a toaster to a car – depending on the sponsor.

The good side of it all is that customers become Tax Authority helpers. But note that this feature is TaxCore specific: if every receipt is scanned, it means it is double-checked and that the authority will have the full insight if a business is evading taxes or committing TAX fraud in any way. Additionally, customers are protected too, as they can even report a receipt they deem isn’t right. Reporting an invalid receipt also offers a chance to enter the lottery. This means that the customer’s compliance is greatly rewarded.

In Fiji, this practice is already proving to work. The businesses would often get into a blame game with consumers, often using tactics such as blaming them for mistrust or for not being ecology sensitive. This practice seems to be meeting its end.

What’s in It for Businesses?

Although at first sight it may seem like only the Tax Authority and customers are benefitting from the Customer Compliance Award program, that is not entirely the case. Businesses that decide to take part in this program see a great income in revenue.

By taking part in the program, businesses are actually promoting themselves and are putting their names out there – on the billboards and on the TV. They can base their entire marketing campaigns around CCA, making sure that the population knows about them and their efforts. This brings customers into their stores, where they can offer multiple discounts on multiple products on their own initiative.

The CCA program has been carefully crafted by people with great minds and ideas. Its point is to give something to all three sides (Tax Authority, customers, and businesses alike) while providing a perfect system at the same time.

Probably what’s most important among all this is that the local population is becoming aware of the new fiscal system. It is crucial that once a country implements a modern and digitalized fiscal and tax collection systems, the population is aware of it. This guarantees the protection of consumers’ rights, which further expands to customers regularly reporting any type of fiscal receipt discrepancies.

The CCA program is one of the best inventions and tools to help local tax authorities in their war against the stubborn grey economy. Once fully implemented, it nearly wipes out TAX fraud and potential consumer fraud.

The post Customer Compliance Award Program – How Does It Work? appeared first on Dti.

VAT (Value Added Tax) has been a well-groomed system by many of the world’s richest economies for years. And once developing countries witnessed just how much VAT can help their rising economies, implementations were in order.

The system just might be even more important in developing economies as it makes it very difficult to evade taxes. And not only that, but it maintains doing so in a very gentle manner, one in which taxpayers are not harshly punished.

When we speak about major economies of the world and how well they use VAT, one would think that the USA would be the pioneer of this system. However, surprising to many, the USA is probably the only developed economy not taking advantage of VAT. Why is this the case, and how much is the economy suffering because of it?

According to The Revenue Statistics 2019, developed countries collect 34% of gross domestic products in taxes, whereas the USA collects about 27%. In most of the developing countries, however, this number ranges from 10% to 20%. The reason behind this is quite obvious, it is harder to collect taxes in developing economies due to a lot of economic activity being informal.

But, when it comes to realizing the importance of tax revenue, there is absolutely no difference between the USA, or, say, Bangladesh. Everyone realizes tax collection plays a crucial role in the overall infrastructure, health, and education of a country.

This is where VAT comes into play.

The Importance of VAT

VAT taxes personal income, only indirectly. Governments collect VAT from businesses, and not households. This leads to a much higher tax collection numbers as businesses naturally bring in more income than an average household – especially in developing countries.

Moreover, in these economies, a lot of people tend to be self-employed, which brings about many problems taxing them. They also often falsify their reported income.

So why might the USA need the VAT system if it is a developed economy? Mostly because the country is losing a lot of money annually by not having this system at all. The IRS estimates that over 60% of self-employed people have their income underreported.

Unlike a sales tax, VAT is paid at every point production stage instead of only at the point of sale. This means that the VAT as a system easily enforces itself.

However, this system brings us to one crucial problem; if a customer is buying a product, they don’t feel obliged to ask for a receipt. This is because they can’t deduct the cost from their income the way businesses can. Therefore, many B2C transactions remain underreported, which presents a significant issue for the local tax authority.

Is There a Solution for the lack of VAT in the USA?

The Government of Fiji in collaboration with TaxCore came to a perfect solution to motivate consumers to ask for a receipt. It presented the CCA (Customer Compliance Award) program. This is a fiscal lottery which a customer can enter by scanning the QR code on the receipt. This way, all the receipts are issued, and customers are helping the tax authority further confirm them by scanning.

If the USA were to ever decide on the implementation of a VAT system, having a good, transparent platform such as TaxCore could bring billions in tax revenue. Moreover, the CCA program would motivate both consumers and vendors to comply. The first would be eligible for rewards, and the latter could build up marketing campaigns around it.

The post The Lack of VAT in the USA and the Problem It Presents appeared first on Dti.

Paying taxes is one of the fundamental principles of any country in the world, it is considered a duty of every conscientious, grown citizen. And while in some countries, citizens are aware that paying taxes benefits them, in others, they don’t.

Why Efficient Tax Collecting Matters

Having an efficient tax collecting system is one of the most important points any government should focus on. After all, this is what survival of a country and its nation depend on. Paying and collecting taxes allows governments to invest into infrastructure, health care, and education.

Unfortunately, developing countries are in a state where their citizens won’t, or very often can’t, fulfill their tax-paying duties. And even though one would think this is a problem only in the 3^rd world countries, 1^st world countries are not immune to tax evasion either. In 2017, the EU suffered a tax loss of 137.5 billion Euros.

Although it may seem like a lot of lost money, statistics show that the European citizens pay their taxes for the most part. The EU will definitely find a way to fight tax evasion, but its citizens still enjoy good public health care and education.

In African countries, however, things are different. Developing countries collect only a small part of taxes, approximately only 10%-20% of the overall GDP. In developed countries, it is more than double compared to this. An important question is raised here – what exactly is stopping developing countries from collecting taxes from their citizens?

The most obvious answer is the lack of political transparency. The institutions in these countries tend to be weak, and the freedom of the media is on a low level. Some of these countries also went through conflicts in their recent past – civil wars or wars for independence. All of this represents seemingly infertile soil when it comes to a good taxing atmosphere.

Additionally, most developing countries rely on sales taxes than personal taxes. This is mostly because the first one is easier to administer.

The most important part of tax collecting is having transparent politics where the citizens know exactly what their tax money is being spent on. Holding the statesmen accountable for everything they do with taxes gives a lot of power to people. They are allowed to have demands, and it feels like this is the culture that needs to be nurtured.

Moreover, statistics say that transparency plays a more important role than forcing citizens to fulfill their tax duty when it comes to tax revenue.

Tanzania can serve as the perfect example of how a lack of transparency and accountability by the statesmen can have a devastating effect on a country’s budget. The tax collection rate in Tanzania is barely over 12%.

In 2018, Mussa Assad, the controller and auditor general presented his annual report of 2016/2017. The report discovered that the country has spent 25.3 trillion Tanzanian Shillings into ghost ventures. This is equal to $10.88 billion. Accordingly, there was a lack of documents from the Ministry of Finance, such as “the proper cash book for the consolidated funds and bank reconciliation statements that provide crucial underlying information for the figures under verification.”

The issue is obvious, Tanzania is not successful in its attempts to keep a record of its transactions. More importantly, public institutions, such as the Ministry of Finance, refuse to share the information with the public. This manner of behavior allows them to remain uncountable for all the mismatches in numbers.

There Is a Solution

Now that we’ve established how transparency is the key to better tax revenue and higher GDP, how can a certain country accomplish it? The solution hides in modernization and using advanced technologies that are at the reach of our fingertips.

Data Tech International developed TaxCore as a solution that can help both developed and developing countries collect taxes more efficiently. TaxCore has been implemented in Fiji and is currently being successfully implemented in Samoa. There are many reasons why it is a state-of-the-art solution – the most evident one being the fact it offers complete transparency.

Once a local tax authority fully implements the TaxCore platform into its system, it becomes capable of following every single receipt printed out to a customer. This allows for tax authorities to regularly check whether any tax or vat fraud is occurring, or if a certain business is regularly printing receipts to the consumers. Secondly, it is a platform that takes advantage of modern technologies to their full capacity. Constantly using internet connection means that every single business is directly connected to the local tax office 24/7. This leaves no space for any fraud to pass unnoticed.

In cooperation with the governments, TaxCore even found a way to motivate customers to ask for receipts by introducing the CCA (Customer Compliance Award) program. The program motivates businesses too, as it can help them shape their marketing campaigns around it, attracting even more customers.

Data Tech International realized how modern technologies can significantly help in the fight against tax evasion, and we’ve successfully proved that this can be done successfully and easily with TaxCore.

To find out more about how TaxCore can help governments all over the world, feel free to get in touch with us.

The post Low Tax Collection Hurts African Growth appeared first on Dti.

Adding the QR code to the bottom of a fiscal receipt gave consumers the freedom to scan it and see all the data. This also further verifies the digital version of the receipt, which is forwarded to the tax office as well.

Sometimes, however, it may happen that what you see on your physical receipt and what you see on the page when you scan the QR code doesn’t quite add up. In this case, TaxCore encourages all consumers to immediately report the receipt. Doing this could also win you a prize, so you will be rewarded for helping your tax office.

How to Report a Receipt

After scanning the QR code, you will land on a page that shows the digital version of your receipt. You will find the option to report on both top and bottom of the receipt.

We split this process into five easy steps:

1. Contact Details

This is where you’re supposed to identify yourself by providing your full name, phone number, and e-mail address. This way, you can easily be contacted should you win an award. Most importantly, discretion is guaranteed.

2. Upload the Picture of the Receipt

This step will prompt you to upload a screenshot or a photo of the receipt as a legitimate proof. The maximum picture size is 5mb, so you shouldn’t have a problem uploading it.

3. Reasons for Reporting

It is vital that an inspector knows why the receipt was reported and what makes it suspicious. You can choose between many reasons – such as location being different, wrong date and time, the amount for a tax item being wrong, etc. You can choose multiple options should there be more than one irregularities on the receipt.

4. Provide More Details

This step is optional and if you wish you can skip it. We added it simply so customers can describe their experience and what lead them to suspect the receipt.

5. Enter the Captcha

In this last step all you need to do is prove that you’re human. Once you enter the code, feel free to click on the finish button and the tax office will immediately receive your report. Our programmers ensured that your report looks very visible to inspectors so they can react at their earliest convenience.

By reporting receipts that look inaccurate, you’re helping tax authorities in your country, and are serving an important role in the fight against the grey economy. If you wish to know more about TaxCore and its many features – feel free to contact us here.

The post TaxCore Reporting a Receipt – Presenting a New Feature appeared first on Dti.

The biggest benefit of the system, however, is its potential to completely crack down tax evasion in the country. TIMS is expected to increase tax compliance and battle the so-called “hidden economy.”

Most importantly, though, T.I.M.S. allows for fair competition and an atmosphere in which it will favor those who are 100% compliant. It will protect fair businesses from those who find ways to evade taxes and can, therefore, sell their products at significantly lower prices.

Lowering the Costs of Tax Collection and Auditing

The Tax Invoice Monitoring System provides many benefits, one of them a being non-expensive method for tax collection. Additionally, there are a few more methods that are supposed to help in wasting money unnecessarily.

Printing receipts for example. Each receipt will come out with a QR code that a customer can scan by simply using any QR scanner on Android or iOS-based phones. By scanning the code, the customer will receive a clear overview of what they purchased and how much VAT they paid for. This way, the customer will additionally verify every single receipt which will be forwarded to the tax authority.

Although paper-based in the present, digital receipts might be a possibility in the future, depending on how the situation develops. Moreover, T.I.M.S. comes with a CCA (Customer Compliance Award) program.

By scanning their receipts, customers will be able to take part in the lottery where vendors award them by offering different awards. This will indirectly impact the fact Samoans tend to rarely ask for receipts and will hopefully break this habit.

The Prime Minister of Samoa, Tuilaepea Aiono Sailele Malielegaoi also encouraged customers to ask for a receipt. Otherwise, they are merely helping non-compliant businesses break the law.

The Launch of T.I.M.S. in Samoa: Business groups

The implementation process is expected to begin in July this year, and it will be rolled out in phases. Based on several criteria for selection, the first group of businesses come from various industries. Other businesses are expected to join within the next 12 months following the first rollout.

The whole process will be very transparent, and the businesses will be notified in time so to give them enough space to comply.

The launch of T.I.M.S. in Samoa will be another effort of Data Tech International with one more of the Pacific Islands, followed by the success of Fiji, to embrace TaxCore as one standard electronic invoicing platform.

The post The Launch of T.I.M.S. in Samoa appeared first on Dti.

International Convention Center
Majuro, Republic of the Marshall Islands

PITAA consists of sixteen Pacific Islands countries. These are Papua New Guinea, Fiji, Vanuatu, Samoa, Kingdom of Tonga, Solomon Islands, Kiribati, The Cook Islands, Federated State of Micronesia, Palau, Nauru, Niue, Tokelau, Republic of the Marshal Islands, Timor-Leste, and Tuvalu.

In 2019, the conference was held in the Marshal Islands, and Data Tech International (DTI) was invited to participate. DTI presented its ultimate electronic invoicing (e-invoicing) platform, TaxCore, and many benefits it has brought to Fiji Island where it is implemented as VAT Monitoring System (VMS).

With TaxCore, every fiscal receipt handed out to a customer is instantly verifiable as it goes through the system and is forwarded directly to a local tax authority. This ensures a real-time monitoring system where any discrepancies can be easily caught.

DTI has shown how TaxCore brings benefits for everyone, not exclusively to the tax authority – meaning that taxpayers and customers also have a lot to look forward to.

Tax Authority Gets:

• Significant Increase of Tax Collection
• Decreased Activity of Grey Economy
• Suppression of Tax Evasion

Taxpayers Get:

• Protection for honest taxpayers (from unfair competition)
• Minimized cost of compliance
• Registration of both sales and purchases (B2B transactions)

The Public Gets:

• Raise of consumer awareness
• Clear information on the tax amount that goes to the government
• Digital electronic invoices
• Participation in the CCA (Customer Compliance Award Program)

TaxCore is a safe system based on the PKI (Public Key Infrastructure) which gives full control to the tax authority. Although the system is based online, so it ensures real-time data transactions, some countries are facing difficulties with the internet infrastructure. Therefore, DTI ensured that TaxCore can work offline as well using secure element in the form of a smart cards that save data until the internet connection is re-established. This has proven most valuable when disaster happened right after launch in Fiji (April 2018) when cyclone Josie had devastated western parts of the island. All the sales records before the affected shops were closed due to the hurricane were preserved and reported to Fiji Revenue and Customs Service (FRCS).

The List of Participants

The PITAA conference of 2019 saw many important names attending. Besides the PITAA members participating were also distinguished observers from International Monetary Fund (IMF), Australian High Commission, New Zealand Inland Revenue Department, and many more.

It was a true honor to be invited to a conference which so many important names attended. Which is why DTI made sure to provide the latest information on technology in taxation and VAT monitoring and how it need to be utilized. Moreover, we made sure to lead with an example and support all our claims with situations and hardships we encountered on the way and have solved successfully.

The conference was a great opportunity for DTI to shed some light on why it is important for outdated tax collection systems are brought into the 21^st century. A lot of data says that countries which dared embark on this journey have seen their efforts pay off significantly – and the goal of DTI is to help through this transition.

The post PITAA Conference DTI: Attending the 16th annual Conference appeared first on Dti.

A common mistake most countries made at one point was enforcing customer compliance instead of simply rewarding it; a method that later proved much more efficient. So how does one convince consumers that demanding a fiscal receipt accelerates the economy, and which strategy proved to be the best?

Creating a Fiscal Lottery

In most countries, providing a receipt to the buyer is already common; it is a part of nearly everyone’s daily life. However, there are still some countries and cultures where asking for a receipt can often be deemed unusual, or even frowned upon. This creates perfect soil for the development of what’s known as “the gray economy.”

For example, in the Independent State of Samoa, where Data Tech International was contracted by the Ministry of Customs and Revenue to implement Tax Invoice Monitoring System (TIMS), asking for a receipt can be embarrassing for consumers in more ways than one.

• The seller can get angry over the fact the consumer doesn’t trust them
• The consumer often feels blamed for “assisting the paper waste issue”

These are just two of the few examples where customers are afraid of asking for a receipt as many believe it is simply a worthless piece of paper. Indirectly, though, the tax office suffers a lot because of this mindset. If a customer is not handed out a receipt, it means that there probably isn’t one in the first place. This easily leads to TAX fraud because the tax office has no input into what goes through the register.

The Solution Hides in Digitalization

Data Tech International found the perfect way to both save paper wasted on fiscal receipts and motivate consumers to actually demand one after consuming goods. Introduction the Customer Compliance Award or simply CCA means awarding taxpayer’s consumers for simply scanning a QR code.

Using our TaxCore software, a cashier is able to create a receipt with a QR code on it which a customer can scan, and potentially win an award from a certain sponsor. Using the “everyone is a winner” model, society and country can benefit from more ways than one:

• Every customer becomes a tax auditor
• The model promotes tax compliance
• Transform the culture of receipt demand into a habit
• Raise the awareness of the EFD (Electronic Fiscal Device) presence
• Attract valuable sponsors to fill the award pools

Most importantly, though, this model isn’t there only to protect the tax office and customers, it also exists to help and promote investors and sponsors:

• It helps to create and maintain a good relationship between companies and consumers
• It creates positive publicity for TA
• Sponsors and investors can benefit from a good reputation of awarding consumers

Revenue Through Gamification: Creating Awards with TaxCore

TaxCore offers a very simple and user-friendly platform that helps sponsors create awards for consumers. It can be anything from smart TV and smartphones to a simple dinner for two. In the end, it all depends on the sponsor itself.

The model proved to help many countries prevent tax fraud and tax evasion by educating the citizens on the importance of fiscal economy and asking for receipts. Moreover, it is a further reminder that rewarding your customers goes a long way towards a healthy economy.

The post Revenue Through Gamification – Awarding Your Taxpayers Helps appeared first on Dti.