The Revenue Department is looking to add 1 million taxpayers to the tax base, a rise of 10 per cent. It specifically expects that a large proportion of that rise will be due to the additions of increasing numbers of those who do business online. Special data analytics algorithms have been put in place to assess tax avoidance on the part of online sellers.
Whilst e-commerce is a growth industry and is supported by the government, it is important that online vendors co-operate in terms of tax collection.
The director-general of the Revenue Department, Ekniti Nitithanprapas, was quoted as saying, “I want to call on taxpayers who do business online to submit tax refund filings correctly as we have information from IT systems that let us know how many people are trading online. We don’t want to go into an in-depth probe or summon them.”
Previous guidelines have been released that detail the threshold for online turnover and also the number of onlinetransactions in a given year that will then require vendors to file a tax return. These were provided late last year and it was also noted that the Revenue Department was using automated data services and web scraping methods to identify online vendors.
Many online vendors feel that their business does not fall under tax codes, as it is not a bricks-and-mortar style establishment. However online businesses are in fact more public than any business operating from an office or shop environment. With this in mind the Revenue Department will likely have an easier time establishing the requirements for online businesses, as they are relatively easy to track with the right technology.
Currently around 10 million people file tax returns and out of that only 3 to 4 million have a liability to pay tax. As of the end of February 2019, 90 per cent of taxpayers had filed tax returns online. Some people who file a tax return are entitled to a tax refund and more than two-thirds of those who are eligible for refunds have already received them.
At the same time, the Revenue Department has put forward a proposal to amend the Revenue Code to waive fines for small and medium-sized businesses that submit a tax return until the end of June. The tax return must be correctly compiled to fit with the single financial account scheme. 400,000 businesseshave already registered for the single financial account program.
Other moves that have been made by the Revenue Department include technology upgrades such as chat bots to help people to file correctly and on time. The main aim is to facilitate timely and correct tax filings so that the Revenue Department doesn’t have to resort to investigations into individual taxpayers.