The Maltese Inland Revenue Department, together with Mepa were finalists with their electronic government services in the 2009 edition of the European eGovernment Awards. The award ceremony was held on the occasion of the 5th Ministerial eGovernment Conference held in Malmö, Sweden, between November 18 and 20.
Though not winners, both were rewarded with the prestigious Good Practice label, to the satisfaction of both entities and the Malta Information Technology Agency which supported the implementation of their e-services.
The Inland Revenue Services Online is a suite of interactive online electronic services. It is driven by the IRD's vision to improve its customer services and reduce internal operational costs. These services can be accessed through the Inland Revenue website at www.ird.gov.mt
"Faster, better, simpler" is the dictum behind these electronic services. "Business process re-engineering and the provision of services through multi channels are crucial to the success of these services," according to Pierre Vella, project manager at MITA. "In these projects the information systems specialists of MITA collaborated closely with the IRD officials to re-design business processes such that the e-services introduced, add value to the taxpayers (or their representatives) otherwise the benefits cannot be accrued. The multi-channel concept ensures that taxpayers can choose whatever method they feel comfortable with (web page or office applications) to do their compliance work."
Beneficiaries of these electronic services include persons submitting tax returns and effecting tax payments, employers withholding tax and social security contributions, and tax practitioners and notaries acting on behalf of their clients.
Work on these e-services started in 2001 and the first area to be tackled was the corporate tax return. At the time the major hurdle was the layout of financial statement information accompanying the tax return that was presented in a variety of formats that did not support electronic filing.
Following discussions with the Malta Institute of Accountants on technical and operational issues, the Tax Index of Financial Data was introduced. This tax index was developed to enable the department to collect and process financial information in a structured format.
"We work very closely with accountants where taxation matters are concerned and the high quality of the online services we offer is in part attributable to the regular two way communication we hold," Mario Raymond Borg, Director Operations at IRD, told iTech.
"It is very important to keep in touch with practitioners and update them with changes in the law and technology. We feel that our e-services also serve as an educational tool since through the continuous updates, such as the yearly provision of the corporate tax return, practitioners are kept abreast of legislative developments.
Practitioners also act as useful media to spread IRD messages relating to changes in tax laws and administrative policies and procedures that affect taxpayers, thereby increasing the level of voluntary compliance and improving the general perception of the department. Above all, practitioners provide invaluable feedback regarding our own performance and the problems faced by their clients," added Mr Borg.
Encouraged by this breakthrough in e-communications the IRD introduced other online services starting with employers. They have the facility to submit electronically annual information about emoluments paid to their employees together with the tax and social security contributions deducted (FS7 and FS3 Forms).
They can also meet their monthly obligation to effect monthly payments of tax and social security deductions, online (FS5 forms).
Subsequently, other online services were provided to different sectors including notaries and third party data providers. These include third parties who provide information related to sources of income and deduction entitlement to individual taxpayers.
With the provision of this information, about 170,000 individual taxpayers are served with a tax statement without being required to file any tax form. The individual tax return is also provided on line.
Payments can be effected either through internet banking or through the e-government payment gateway. All online applications offered by the IRD have integrated features to ensure the accuracy and completeness of the data inputted and automation of complex calculations.
This approach prevents errors that may be costly in terms of penalties to the taxpayer. Security is ensured through digital certificates and the encryption of data.
The benefits of these services can be gauged by the usage where more than 83 per cent of corporate tax returns filed and 73 per cent of employee data provided by employers is transmitted online.
The IRD and ultimately the taxpayer registered significant cost savings on printing, mailing, processing and physical storage of paper documents. Furthermore, online filing of forms is saving the environment some 1.83 million sheets of paper each year.
The next step for the IRD is to examine how the announced merger of this department, the VAT Department and the Customs Department will impact online services, especially the sharing of data.
"There is always room for improvement and we are never satisfied with the results achieved despite the encouraging take-up. Events are happening so fast that the search for enhanced ways of doing business with our customers is endless. In some areas we are hindered by cultural barriers.
For example many customers still prefer to sign and send a cheque rather than submit a payment online.
And that's just for the sake of keeping a paper record of the transaction! Ultimately, the use of the electronic services is for the benefit of both taxpayers and the IRD," concluded the director operations at the Inland Revenue Department.
This is another article in a series reporting on the 5th Ministerial eGovernment Conference and e-government in Malta made possible with the support of MITA.