Our participation in the CATA conferences has become a valued tradition within our organization, one that we are proud to continue. Having attended on several previous occasions, we remain committed to maintaining our presence and supporting the event.

The CATA conferences provide a valuable platform for staying informed about the latest developments in fiscalization. Bringing together leading experts in tax system modernization and digital transformation, the event offers a unique opportunity to exchange insights and explore emerging trends in the field.

Significant Milestone Achieved

However, what sets this year’s conference apart from previous editions is a significant milestone: for the first time, the Heads Meeting is being held as a separate program from the Technical Conference. This distinction is particularly important, as the clearly defined agendas allow participants to better navigate and focus on either technical matters or policy-related discussions. Leaders and delegate alike warmly received this change, as it promises to enhance the overall experience and foster more meaningful engagement from all attendees.

Keeping with tradition, the host country opened the conference with welcoming remarks delivered by the Commissioner General of the Internal Revenue Commission (IRC), Mr. Sam Koim. He warmly welcomed delegates and emphasized the significance of hosting the event in Papua New Guinea. This year’s conference had the theme: “Aligning Global Standards with Local Solutions: Evolving Tax Systems in the Digital Age.”

Key Takeaways from the CATA Conference

Strong collaboration and dialogue are essential: The conference provided a valuable opportunity to strengthen relationships among tax leaders from across the Commonwealth. It fostered meaningful dialogue on the future of tax administration in an increasingly dynamic and evolving global environment.

The focus is on innovation and digital transformation: A central theme throughout the conference was the role of innovation and emerging technologies in modernizing tax administration. Key discussions focused on the use of blockchain, real-time predictive data, and advanced analytics to enhance revenue collection, as well as the application of AI, automation, and personalized services to improve the overall taxpayer experience.

Regional collaboration is of paramount importance: Analyzing and drawing lessons from the fiscalization experiences of other countries in the region is essential for avoiding common pitfalls and ensuring a smooth, effective implementation. Throughout the discussions, participants emphasized the importance of peer learning and highlighted the need to develop tailored approaches that reflect each country’s specific context and needs.

How to best integrate global tax standards into national systems: Achieving alignment between global tax norms and local needs requires strong peer learning and regional collaboration. Participants also cautioned against an overreliance on international standards without proper adaptation, emphasizing the importance of contextualizing global frameworks to fit each country’s unique economic, legal, and administrative landscape.

Our Contribution to the Conference

Data Tech International proudly participated in CATA’s working group sessions under the theme “Harnessing Innovative Technologies for Revenue Growth: Bridging Strategy and Practice.” During these sessions, leaders from across the Commonwealth, such as Papua New Guinea, Fiji, Nigeria, or Malaysia, exchanged ideas, issued key recommendations, and defined follow-up actions. Among the most important topics discussed, the following stood out:

• Technology alone is not sufficient: Policy objectives must be aligned with the use and implementation of new technology. Technology goes hand in hand with improving taxpayer service and organizational reform (including a broader tax policy reform).
• Unitary invoicing is a powerful tool: To eliminate invoice fraud and improve VAT compliance, the buyer, the seller, and the tax authority must be simultaneously linked at the point of transaction.
• Local adaptation is the key to success: A successful implementation depends on local adaptation; systems need to be and remain relevant and accessible to both taxpayers and frontline staff equally.
• Flexible regulations over rigid ones: Experience proves that adaptive regulations, open to the idea of leaving room for local innovation and vendor participation, are more beneficial than prescribing specific devices or technical standards.
• International collaboration, strongly advised: Using learning platforms to exchange implementation experiences positively contributes to increasing regional leverage.
• Future topics to explore together: Leaders agreed that conducting maturity assessments, launching regional digital transformation clinics, improving collaboration with tech industry leaders, or enhancing digital tax policy frameworks are important milestones to achieve by the end of this year and the beginning of the next.

Final Word

We consider the 45th CATA Conference to be a great success, having brought together representatives from over 30 member countries. In addition to this strong participation, the event also welcomed delegates from key international and regional organizations, including the OECD, IBFD, IMF, World Bank, CIAT, PITAA, and WATAF.

This level of engagement reflects the deep commitment and collaboration among CATA’s leadership and partners. It also highlights the significant efforts made in the planning, organization, and coordination of the conference — efforts for which we are sincerely grateful.

From our perspective, this year’s CATA Conference could not have been more timely. The Pacific region is currently experiencing a significant wave of new fiscalization implementations, making the conference especially relevant. Notably, in Vanuatu and Papua New Guinea, DTI is preparing to deploy its TaxCore solution, aimed at making tax collection and compliance more streamlined, efficient, and technologically advanced than ever before.

DTI is proud to have contributed to the Commonwealth’s ongoing discussions by sharing its expertise in the field. We remain committed to strengthening our relationships with new and existing stakeholders while continuing to consolidate our presence in the region, a region that has always been, and continues to be, of strategic importance to us.

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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.

The post eFiscalization in Serbia: A Success Story in Combating the Grey Economy appeared first on Dti.

As digitalization continues to drive change in economies worldwide, PITAA’s initiatives offer a clear path for Pacific tax administrations to stay relevant, innovative, and effective. By focusing on revenue mobilization, capacity development, and technological advancements, the organization provides a forward-looking approach to cooperation across the region. These key priorities are essential for equipping Pacific tax administrations to move with ease through today’s economic realities.

Once more, Data Tech International has had the honor to assist at this yearly event, this year held in Vanuatu. This yearly heads meeting is crucial for all the countries in the Pacific region willing to transform and enhance their economic systems. In this regard, DTI’s CEO, Mr. Goran Todorov, personally joined this yearly event and exchanged ideas and stories of success in the two countries in the region where DTI’s flagship product, TaxCore®, has a firm presence: Fiji and Samoa.  

TaxCore’s know-how offers countries in the region a clear path towards revenue increase by using the latest tendencies in digitalization, and data analytics with powerfully tailored reporting tools capable of handling compliance, modernizing tax systems, adapting to the local conditions, and, at the same time, by adding value to the tax administrations.

Fiscal Innovations: Modernizing Revenue Collection

As economies become increasingly interconnected, the need for innovative approaches to revenue collection has never been more critical. The growing complexity of tax compliance requires tax administrations not only to manage existing systems but also anticipate emerging risks and challenges.

PITAA’s emphasis on modernizing revenue collection highlights the importance of using data analytics, automation, and strategic risk management to address these challenges. By utilizing advanced technologies, tax authorities can more effectively identify tax evasion, predict areas of non-compliance, and develop tailored strategies to improve revenue generation. This is particularly vital for Pacific nations, where resources may be limited, and optimizing tax collection is essential to supporting public services and infrastructure development and maximizing tax collection is crucial for.

But modernization isn’t just about upgrading technology; it also involves taking care of transparency and accountability in an ethical manner. Effective risk management goes beyond identifying potential issues—it requires building trust with the public and engaging taxpayers to encourage voluntary compliance. As countries in the Pacific region like Fiji and Samoa, explore these fiscal frontiers, combining innovation with integrity will be key to achieving sustainable progress across the region.

Data Tech International fully understands these priorities. With a long history of supporting tax authorities across the Pacific, its success stories in Fiji and Samoa showcase how leveraging the latest technology can lead to tangible modernization in tax administration. By tracking non-compliance and utilizing advanced tools, these efforts are helping generate sustainable revenue streams, setting an example for the entire region.

Enhancing Digital Transformation: The Role of Technology in Taxation

Digital technology is playing an increasingly central role in transforming tax systems, and PITAA’s focus on digitalization—described as riding the “Digital Waves”—marks a significant shift in how countries manage taxation across the Pacific. From automation to artificial intelligence, these tools are leading to faster, more accurate, and more accessible tax systems that benefit both tax administrations and citizens.From automation to artificial intelligence, these tools are leading to faster, more accurate, and more accessible tax systems that benefit both tax administrations and citizens.

One of the most striking benefits of this digital transformation is the efficiency it brings. Automated processes reduce the administrative burden for both governments and taxpayers, automation now allows completing tasks in a manner of minutes when those tasks once took weeks. This frees up valuable resources for tax administrations to focus on more pressing matters, such as detecting fraud and ensuring compliance. Moreover, digital systems promote transparency by making data more accessible and traceable, reducing the opportunities for corruption or mismanagement.

The challenge: cybersecurity and the ethical use of AI

However, the rapid adoption of digital tools brings its own set of challenges, particularly in terms of cybersecurity and the ethical use of AI. As tax administrations become increasingly reliant on these technologies, it becomes crucial to protect digital tax systems from cyber threats. PITAA’s recognition of these risks highlights its dedication to building secure, resilient infrastructures that preserve the integrity of Pacific economies. Digital transformation must be paired with measures that address these risks and ensure that no country is left behind as the region advances.The digital transformation must go hand in hand with measures that address these risks and ensure that no country is left behind as the region moves forward. 

TaxCore®, with its broad range of capabilities, adds value to tax administration by offering a wide array of automation techniques that dramatically reduce the time tax authorities’ staff spend analyzing data. It also equips tax inspectors and other essential personnel with the data that truly matters when carrying out their daily tasks. Additionally, TaxCore® always protects sensitive data, keeping it safe from cyber threats, and having it remain securely on the tax authorities’ premises, well-guarded against any major incidents. Data Tech International (DTI) takes cybersecurity very seriously, addressing potential cyber-attacks that could threaten critical infrastructure.

Developing Expertise: strengthening the Pacific Workforce

A highly skilled workforce is the backbone of any successful tax system. Understanding this, PITAA has made capacity building a key pillar of its modernization efforts. As the complexity of taxation grows, a workforce equipped with the right skills and knowledge is essential to keeping pace with global trends and technological advancements.

To do so, tax authorities should not only focus on technical training but also foster a culture of innovation, leadership, and continuous improvement. This holistic model ensures that staff are well-prepared to not only operate modern technologies but also to engage in strategic thinking and problem-solving. As automation takes over routine tasks, the value of human expertise in decision-making, ethics, and long-term planning will only increase.

Collaboration and knowledge-sharing across the Pacific are equally important. While the region’s countries are diverse, they face many similar challenges in modernizing their tax systems. By sharing best practices and working together, tax administrators can enhance the effectiveness and efficiency of their systems. PITAA’s annual meetings provide a critical platform for this cooperation, enabling tax authorities to learn from one another and collectively strengthen tax administration across the Pacific.

Data Tech International (DTI) also contributes significantly to this vital aspect. Its proven expertise in capacity-building, demonstrated through successful implementations in Fiji and Samoa, showcases its strong commitment to adapting to local conditions. DTI focuses on maximizing the effectiveness of training for tax administration staff, modernizing existing processes, enabling new ones, and increasing overall efficiency in order to allocate limited resources effectively in a fast-changing environment.

Actions to Achieve the Vision

To turn PITAA’s vision of a modernized, efficient tax system into reality, several steps must be taken. The path to achieving these goals requires a balanced approach that integrates innovation, collaboration, and a long-term focus on sustainability.

First, investing in technology that truly delivers robust infrastructure remains a top priority. Without the right tools, even the most skilled workforce will be unable to fully implement modern tax systems. Building and maintaining digital platforms, secure databases, and automation tools is essential to laying the foundation for long-term success.

In parallel, maintain the current position that continuous learning and development are essential. While technology plays a key role in modern tax administration, the people who manage these systems are the true drivers of progress. Regular training, opportunities for professional growth, and engagement with new methodologies are crucial to ensuring that digital transformation efforts are both effective and sustainable.Regular training, opportunities for professional growth, and engagement with new methodologies are crucial for ensuring that digital transformation efforts are both effective and sustainable. 

Data Tech International cooperation commitment

In this respect, cooperation between Pacific nations is indispensable. While each country faces unique circumstances, the overarching themes of digitalization, risk management, and capacity development are shared challenges. By pooling resources, expertise, and insights, Pacific nations can create a collective force for regional progress and drive meaningful change in tax administration.

At Data Tech International, we believe that strong, ongoing cooperation is key to ensuring long-term regional progress. This is essential to achieving digital transformation. That’s why TaxCore® represents the most reliable solution for tax authorities—facilitating capacity development, securing revenue collection, and protecting sensitive data from cyber threats, while ensuring that the latest trends and technologies are continuously adopted, updated, and modernized.By pooling resources, expertise, and insights, Pacific nations can create a collective force for regional progress and drive meaningful change in tax administration.

The post PITAA Annual Heads Meeting 2024: TaxCore Response appeared first on Dti.

As the first group of taxpayers transitions to our innovative solution, the benefits are already becoming clear, marking a significant milestone in fiscal modernization.

Why Republika Srpska Needed a Change

Republika Srpska has long been an advocate for fiscalization, having introduced its first system in 2009. While this initial setup served the entity for over a decade, the technology had reached its limits. The old model, based on fiscal memory embedded in cash registers and printers, had become outdated and inefficient in managing the growing complexities of the modern economy.

When the decision was made to upgrade, the Republika Srpska tax administration conducted a thorough search for the most suitable solution. After evaluating global options, they chose our TaxCore® platform— a system already proven to be highly effective in neighbouring Serbia. This decision was a testament to our solution’s ability to handle large-scale fiscalization processes and its potential to address the specific needs of Republika Srpska.

In this case, our team at DTI worked closely with the Republika Srpska Tax Authority to ensure that this transition was not only smooth but also provided tangible benefits to businesses and government alike. The rollout of the new fiscalization system is proceeding on schedule, with more taxpayers set to join in the coming months.

The Advantages of TaxCore®

TaxCore® offers a suite of features that fundamentally improve the fiscalization process. From the outset, one of the key improvements is the automation of taxpayer enrollment. By integrating with SAP’s Treasury and Risk Management (TRM), our system seamlessly feeds from the source of the taxpayer registry, ensuring master data remains intact. Positive side-effect of this process is data cleansing, which is intensified because all taxpayers must update/register every sales point they use to conduct their business. This is all done electronically and makes compliance straightforward for businesses, reducing the administrative burden and allowing them to focus on their core operations.

Another crucial feature of TaxCore® is its ability to maintain a secure electronic journal for everyone. TaxCore® stores all transactions in the tax authority’s database and made verifiable to anyone, including public, for up to ten years, providing a reliable and easily accessible record. This contributes significantly to reducing fraud and increasing compliance, as all transactions are unique and can be verified at any time.

Additionally, TaxCore’s powerful validation system ensures the validation of every transaction in real-time, giving businesses confidence in the recording of their fiscal data, even in case some sales point end up offline. The system also offers comprehensive built-in reporting tools and data export for external BI/AI tools to use, enabling tax inspectors to perform field inspections more efficiently. These reports are equally beneficial for businesses, providing them with clear insights into their fiscal obligations.

Fiscal lottery, a feature not to be missed

One of the most innovative features we’ve integrated into the system is a public participation element—a fiscal lottery. By allowing the public to win prizes for participating, we have effectively created an incentive for citizens to demand fiscal receipts, thereby supporting greater accountability and transparency. This initiative not only benefits the government by promoting compliance but also engages the public in a meaningful way, making them active participants in the fiscalization process.

Vendor Independence and Flexibility: A Key to Success

At DTI, we believe in providing flexible, vendor-independent solutions. This philosophy is reflected in the way we’ve structured TaxCore®, allowing local POS and E-SDC developers to accredit their solutions in our Sandbox environment. In Republika Srpska, 13 developers have already successfully completed the accreditation process, with more expected to follow. This open approach gives businesses the freedom to choose the most suitable fiscal solutions, while still complying with the jurisdiction’s regulations.

One of the standout benefits of our system is its ease of implementation. The Republika Srpska Revenue Authority did not need to hire any additional employees to manage the system. Instead, existing staff were able to seamlessly transition to using TaxCore®, taking on new roles and responsibilities with minimal disruption. This not only reduces administrative costs but also boosts the overall efficiency of the tax authority.

The cost-saving potential for businesses is another important advantage. The new system eliminates several expenses associated with the previous model, such as the need to print control receipts and conduct costly annual maintenance of fiscal devices. By reducing these operational costs, TaxCore® enables businesses to operate more efficiently and with fewer financial burdens.

Our Commitment to Republika Srpska’s Growth

From the beginning, our goal at DTI has been to provide Republika Srpska with a system that meets both current and future needs. We are proud to see that the Revenue Authority has embraced the potential of TaxCore® and is taking proactive steps to support businesses during this transition. By offering subsidies for the initial costs of fiscalization and providing clear, consistent communication to taxpayers, the Tax Authority has demonstrated its commitment to ensuring the success of this initiative.

We’ve also been impressed by the Tax Authority’s dedication to educating taxpayers about the new system. Their public awareness campaigns, which include detailed media announcements and instructional content, have helped businesses and citizens alike understand the benefits of fiscalization and the steps required for compliance. This has contributed to the smooth rollout of TaxCore®, minimizing resistance and enabling broad participation.

_{TaxCore® is a product name of Data Tech International. It provides the back-end functionality for numerous government monitoring systems. For example, in Fiji the VAT Monitoring System (VMS) is powered by TaxCore®, as is the Tax Invoice Monitoring System (TIMS) in Samoa, la facture normalisée (FNE) in Ivory Coast (pilot), and the System for Fiscalization Management (SUF) in Serbia and Republika Srpska.}

The post Fiscalization in Republika Srpska: Successful Rollout! appeared first on Dti.

The difference maker is the amount of data that can be “packed” in a QR code and what happens to that data after the verification. In TaxCore®, QR codes contain plenty of important data, all of which is shared with the TA upon scanning:

• Seller Identity
• Buyer Identity (usually just for B2B)
• Document Type and Total Counters
• Date and Time
• Invoice and Transaction Type (and their total counters)
• Encrypted Accumulated Totals (internal data)
• PKI-based digital signature

To understand just how useful this can be for the TA, let’s look at a short case study.

A short study on its usefulness

A taxpayer has been creating fiscal invoices but has not been reporting all the transactions regularly (which can happen unintentionally, due to equipment malfunction). In normal circumstances, there would be no way for a TA to know of this without a targeted field visit.

However, thanks to the comprehensive data shared with the TA and the blockchain approach in TaxCore®, it is enough for just one customer to scan the invoice QR code and all accumulated information about the previous invoices will also be transferred to the TA.

When information about a scanned invoice arrives at the TaxCore®, this invoice is stored in the system, which then checks whether it has received all previous invoices according to their unique invoice number. If some invoices are missing, a gap will be recorded in the system until all the invoices are properly reported. TA officers can use a portal interface for a quick and simple view of all the gaps.

The numbers in Range Start and Range End columns mark the unique numbers of invoices that have been stored in the system. In this case, all those invoices have been transferred to the TA via a QR code scan.

For this reason, there are no items in the stored invoice details. Nevertheless, because of the digital signature, there is non-repudiable information about the taxpayer and the unique invoice number.

TA officers can access the invoice’s internal data and see the accumulated total for previously issued invoices including the total number of issued invoices and total tax liability.

TaxCore® and taxpayer’s tax liability

As you can see, the proper application of a QR code on an invoice can be extremely helpful in identifying taxpayers who have not been reporting their transactions regularly. Even in those situations, TaxCore® users do not need to worry about losing information about the taxpayer’s tax liability.

The post Scanning QR code on invoices – how can it benefit all parties? appeared first on Dti.

Since January 1st, 2020, all companies dealing with the public sector, regardless of their size, must send their invoices in electronic format. Likewise, all public entities in the European Union are required to accept electronic invoices addressed to them. The main objective of introducing e-invoicing is to simplify sending and receiving invoices, as well as prevent tax evasion. The process of introducing e-invoicing obligations for B2G, which started in 2017, has been completed. In France, they do this via the Chorus Pro platform (also supported by PEPPOL); single portal to address all public entities.

In addition, the 2020 finance law generalizes this requirement to the private sector, since all companies must be able to receive invoices in electronic format from July 1, 2024. Governments will impose on companies an obligation to issue electronic invoices for B2B sales, as well as to submit invoice data to the tax authorities, gradually between 2024 and 2026.

These measures are necessary to establish:

– mandatory e-invoicing for domestic transactions between companies;
– an e-reporting obligation (transmission of billing and payment data for transactions carried out with natural persons or foreign operators).

This would translate to:

– an obligation to receive electronic invoices, by all companies from 2023, and
– e-invoicing and e-reporting obligations for sales operations, applicable from 2023 for large companies, from 2024 for medium-sized companies and from 2025 for SMEs (companies with fewer than 500 employees) and VSE (company with less than 20 employees).

The notable difference will be the “physical” receiver of the invoice issued. While before the seller transmitted it directly to the buyer, the implementation of mandatory e-invoicing will result in the appearance of an intermediary in the invoice transmission chain. in fact, the seller will have to always send their invoice electronically to an individual certified as a centralizing public platform or directly to the centralizing public platform. The platform (or certified individual) would then be responsible both for transmitting the invoice to the customer and for transmitting the billing data (via the centralizing public authority in the event of the intervention of a private operator) to the tax administration.

The administration has changed its initial position by supplementing the obligation to transmit invoices in electronic format to the tax authorities for transactions carried out in France by professionals (“e-invoicing”), with an obligation to transmit billing data (“e-reporting”), applicable to sales transactions carried out with natural persons (“B2C”) and foreign operators (B2B sales, intra-Community sales and exports). The e-invoicing model chosen is a tax clearance model already administrations use around the world, with the difference that this model does not directly transfer the data to the tax administration but via certified agents or the centralizing public platform. This intermediary collects taxpayer data and then shares it with the tax administration via the e-invoicing portal. The issuer and the recipient of the invoice can also communicate without the intermediary of the agent.

The e-invoicing portal

The e-invoicing portal supports three modes of account transfer that can be used by taxpayers: EDI, API or Web service. Also, the e-invoicing portal uses three data transmission formats: UBL 2.1, CII and Factur-X.

Finally, the counterparty of the seller (professional buyer) would have to transmit the data relating to the payment of these invoices (status, date of payment) to the tax authorities. This data does not appear on the invoices but constitutes information necessary to determine the due date for VAT when this occurs on collection (provision of services).

Many countries have undertaken the initiative of having the e-invoicing control system with the aim of reducing the gray economy and tax evasion. The certified system is an important and new component of this initiative, put in place so that taxpayers can electronically secure each transaction at the time of sale.

The TaxCore® solution

One such system is TaxCore® – a scalable software solution that enables tax compliance through usage of commercially available technologies and public APIs to issue fiscal invoices in online/offline environment and collect audit data. It suppresses tax evasion, decreases the activity of gray economy and fights frauds.

There are commercial solutions that address all of the above-mentioned requirements. These solutions enable the businesses to exchange and issue invoices protected by digital certificates, as well as the Tax Authorities to have clear, secure and reliant insight into the content of such transactions.

TaxCore® solution works within any type of clearance mechanism model where single service provider connects both the supplier and the buyer to its platform to offer e-invoicing and other supply chain services.

TaxCore® system can receive and transmit e-invoices issued by supplier in online or offline regime in the same manner.

The system receives all e-invoices in a centralized database.

The system authenticates all e-invoices through a secure authentication method.

The TaxCore® system verifies that all e-invoice data are correct through the automated verification of the validity of the Taxpayer Identification Numbers (TIN) or corporate number or national ID number, as well as the tax calculation.

TaxCore® has the option for buyers to verify that the tax administration receives the e-invoice and that it goes through automated verification.

TaxCore® makes it easier to develop and generate reports and statistics.

E-invoices in TaxCore® centralized database are available to both sellers and buyers.

The post The implications of e-invoicing in France appeared first on Dti.

Everything is ready for the official kick off as Data Tech International, along with consortium partners, deployed TaxCore into production on a brand new equipment that will host eFiscalization expecting to receive, validate and store about 15.000.000 transactions on a daily basis.

The list of accredited POS and ESDC solutions has been growing continuously to satisfy demands of all taxpayers who have to transition to the new system by April 30th 2022, thus beginning the fiscalization journey in Serbia.

In a record-breaking implementation period of just five months since the contract signing, we managed to accomplish all expected deliverables and we will continue to support Serbian Tax Administration for continuous operations until the end of 2022.

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For the most part, the fight against non-compliant taxpayers has been quite successful, and each country tried to force them to comply in its own way. However, did this fight cause casualties? Did complying taxpayers suffer without a reason too? It appears that this is exactly what happened, unfortunately.

How did these changes affect most businesses though? For most of them, these changes meant additional operating costs. To make things worse, these businesses have not seen many results for their effort either – a lot of countries failed in their effort to fight against the grey economy. Therefore, each new rule supposed to fight against tax and VAT fraud comes as no surprise to honest business owners, who feel very pessimistic. Authorities seem to ignore most of the remarks and firmly claim that the new systems implemented are doing their job, but the reality seems a bit different.

What Did Surveys Find Out?

There were many surveys performed in the past to find out how VAT fraud can be fixed. They absolutely brought a lot of insight into how business owners feel about VAT fraud in general, companies that flourish because of it, and new systems imposed by the governments.

When asked how VAT fraud affects their businesses, business owners replied as follows:

• 55% believe that the new tax laws will not affect fraudsters but bona fide companies instead;
• 50% say that fraud leads to the unfair competition which directly damages their business and smooth functioning of the business market.
• 49% believe it is the lack of fiscal predictability damaging their business; and
• 39% believe it is unpredictable VAT costs

Believers assert that authorities have been so focused on legislative and procedural provisions lately that they failed to notice digitization, and the reform of the tax system has completely slowed down. We can argue  that combating VAT and tax fraud solely through legislative measures burdens business owners with excessive regulations, costs, and paperwork. On the other hand, reforming and modernizing tax collection and fiscal systems creates perfect ground that’s fertile enough to help compliant businesses and punish those who are not at the same time.

The survey also found out that a business can often get into trouble for working with fraudulent partners without even knowing it. When asked if they should impose penalties for this, this is how companies responded:

• 92% indicated a refusal to deduct expenses;
• 70% said tax investigation was in order;
• 60% said there was a rejection of the right to apply to VAT exemption;
• 37% were targeted as third-party garnishment;

What have the respondents to say?

Overall, 75% of the respondents said that they had to go through unannounced tax fraud check-ups only for doing business with a specific non-compliant partner. The situation seems unfair as these respondents had no idea their partner wasn’t compliant.

Most authorities believe that to avoid risks, companies should perform their own research and undertake checks of the partners with whom they work. Respondents said these are the first red flags they notice if a partner isn’t compliant:

• 78% said they first notice unusual payment conditions;
• 70% said they first notice that the price is significantly lower than it should be;
• 70% first notice negative public information;
• 53% said they get worried when important logistic details are missing;
• 23% get worried when an unusually large quantity of goods is involved.

However, only 8% of the respondents said that they actually notified authorities when they had serious suspicions. 62% confirmed they immediately cease relationships when they become suspicious, and 58% impose preventive contractual safeguards.

How TaxCore Deals With this issue

Data Tech International and TaxCore successfully managed to scan the market and find out where the real problem hides. It is the absolute transparency and proper connection that can eliminate the grey economy. With TaxCore, each business connects to a Tax Authority’s server where the system transfers each sale in real-time. That’s how Tax Authority can immediately be aware if a certain business is trying to hide some sales just to avoid paying for taxes. Moreover, each customer indirectly helps tax authorities catch fraudsters by having the option to report a receipt, something TaxCore successfully implemented. Most importantly, the whole system comes at a minimum cost for taxpayers, with countries often covering the costs completely.

VAT and tax fraud should present one of the most serious concerns for authorities because they are the main factors of revenue loss to national budgets. Countries are losing billions annually due to this, and a good tax and fiscal system are crucial to putting a stop to this.

The post The Fight Against VAT Fraud – Is It Hurting Complying Businesses? appeared first on Dti.

This is why Fiji decided to implement the revolutionary solution against tax fraud that TaxCore represents. But, more than just a tax-collecting platform, TaxCore serves as a perfect ally against the grey economy, which was Fiji’s main objective to choose it in the first place. To truly fight the grey economy which costs many countries in billions, one must also organize the way fiscal atmosphere looks.

What Is the Overall Result in Fiji?

Two years later, and the overall situation in Fiji has significantly improved. One of the largest issues this nation was facing was the fact people didn’t ask for receipts. Naturally, this gives more than enough space for taxpayers to commit tax fraud at the cost of consumers’ rights. The culture in Fiji is such that asking for a receipt represents disbelief, and, as such, people frown upon this. The state of Fiji and Data Tech International had to come up with a way to motivate customers to ask for a receipt; and the best solution was to reward them.

TaxCore’s receipts are revolutionary for the way they look and present the information to a buyer. All the items are listed so clearly that a consumer is never confused, but more importantly, they come with a QR code at the bottom that a consumer can scan. By scanning this code, a customer can see a digital version of the invoice on their smartphone.

Moreover, they can report the receipt immediately if something doesn’t seem right. By doing this, they are taking part in the Customer Compliance Award program – which is a form of a lottery where a consumer can receive an award. The awards can span from a simple dinner for two, to a new car.

This plan motivated Fiji buyers to ask for receipts, which for the most part, helped shut down the grey economy.

Recently, Fiji announced that they’ve hit the mark of 200 million issued receipts. Although one might believe this number isn’t fascinating given how it has been two years – it is actually more than satisfactory for a couple of reasons.

The Rollout Process

Since implementing TaxCore presents a big change, the tax authority in Fiji must do this process in a precise and thorough manner. Therefore, Fiji’s Tax Authority decided to split taxpayers into groups – starting with realtors and pharmacies.

The first group consisted of these two industries only, and the new groups are expected to be rolled out soon. Issuing 200 million receipts is captivating because the number is based exclusively on supermarkets and pharmacies.

This is a clear sign that:

1. Consumers asked for receipts regularly, and
2. Taxpayers abide by the law

Hitting this mark is a clear signal that Fiji and TaxCore are successfully changing the fiscal and tax climate in the country.

Now that FRCS has collected more than 200 million fiscal invoices from onboarded supermarkets and pharmacies with over 100 different POS vendors and few ESDC vendors, it is time for new groups.

FRCS is now ready to take other industries into scope, especially hospitality, put on hold due to the COVID-19 crisis. Tourism and hospitality are two branches that have started to bring in a lot of revenue to the country, therefore Fiji deems it important to bring these industries into the system starting from January 2022, as delayed due to COVID-19.

The situation will only get better once all the industries have been properly enrolled in the system.

The post Fiji tax fraud – The State of Fiji Registers Its 200 Millionth Receipt – And Here’s Why That’s Important appeared first on Dti.

The reasons why a country may be suffering from low tax collection can be many, and they vary from nation to nation. Taking into consideration all the countries and all the different problems they’re facing, TaxCore brings a revolutionary change that can greatly help.

Auditing

With TaxCore, governments and tax authorities receive a platform that is 100% transparent and safe. It is a platform that allows them to monitor taxpayers and their businesses in real-time. For the most part, this does help tax authorities oversee if a certain business isn’t registering sales or isn’t issuing receipts regularly.  TaxCore digitally signs every fiscal receipt so it’s very easy to track them and their validity. But every so often, transparency and proper monitoring aren’t enough – so TaxCore’s DTI solution came up with a new solution to the problem, the proof of audit feature.

Proof of Audit serves as a confirmation from the tax authority system has stored all the invoices issued with a particular digital certificate in its database. The proof of audit, designed by DTI, is very flexible, and it doesn’t limit business in any way. It is issued after each fiscal invoice (remote audit) or after a group of delayed invoices reach the database (local audit). Delayed invoices may occur due to an unexpected loss of internet connection. TaxCore allows to save these invoices and to audit them once the internet connection comes back. Proof of audit also confirms that exactly the same data that was entered in the taxpayer’s SDC was transferred to the tax authority database.

Use of the mini-blockchain technology with the proof of audit

By using blockchain technology to link all fiscal invoices issued with a particular digital certificate, TaxCore, will instantly notice if there is a gap in the invoice submission sequence (e.g. if one or more invoices from that specific certificate chain are missing). Should this happen, the taxpayer will not receive their proof of audit. Instead, TaxCore’s DTI will wait for all the invoices to arrive at its database. Additionally, TaxCore issues all these invoices with this particular digital certificate. Only then will the database send a proof of audit to the taxpayer.

The system can delay the proof-of-audit too if so needed. However, there is a preset limit to this, and if not obeyed, the system will block the taxpayer from issuing any new fiscal invoices. The purpose of this setup is to motivate taxpayers to report regularly. Even if a taxpayer suffers a lack of internet connection which prevents normal invoice submission, the system will still inform them that the preset limit is approaching. In this case, a taxpayer can perform a local audit so that they could obtain a proof-of-audit.

The proof of audit function works in a way that it takes the new data and moves backward through the mini-blockchain (link by link). This confirms that TaxCore has accurately recorded all of the data contained in the SDC and its associated Secure Element. Therefore, nothing is missing, no data can be manipulated, and the whole system works perfectly on all ends.

A seamless process

The whole process is seamless, fully automated, and works continually (although this does depend on the taxpayer’s internet connection to an extent). All a taxpayer really needs to do (to know that they are fully tax-record-compliant) is to make sure that the on-premises-Sales Data Controller has a stable connection to the internet. Even if the connection stops for a short period of time, it won’t impact a taxpayer at all.

Thanks to this new proof of audit technology, TaxCore’s DTI ensures that tax fraud is nearly impossible as it motivates taxpayers to report regularly. Moreover, it helps tax authorities easier be in touch with taxpayers and their business practices. This helps build a transparent environment and significantly increases tax revenue, which helps for a country’s prosperous economy.

The post Proof of Audit – Created by DTI for TaxCore, 2nd Year in Production appeared first on Dti.