manage government resources more effectively

Smarter Government –Tax and RevenueImproving the economic health, welfare and safety of society

© 2012 IBM Corporation

Presented byDate


Smarter Government – Tax and Revenue

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Providing leadership in the face of global challenges.

Changing demographics increase the cost of social protection

Citizens expect better and more responsive government services

Every major country affected by terrorism and regional conflicts

Government financessignificantly weakened by the global financial crisis

Rising energy costs, water supplies at risk



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Governments face challenges – and opportunities -- in every functional area.

Increase outcome effectiveness

26% to 58%Percent of government spending allocated to social protection

Savings from reduced fraud and error

£ 3.1 billionEstimates of fraud and error across all benefits during 2009/10 in Great Britain

Savings from improved tax compliance

$1.2 billionAmount New York State Department of Taxation and Finance has saved through tax compliance

Conserving energy, increasing productivity

4.8 billion hoursAdditional hours that traffic congestion forced Americans to spend on the roadways, a loss of 3.9 billion gallons of fuel worth $115 billion

Reducing crime’s true cost

$943 per personThe tangible social and economic cost of crime in Canada -- $31.4 billion, or $943 for each man, woman and child



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To ensure the economic health, welfare and security of their citizens, government leaders are prioritizing these imperatives.

Improve Citizen and Business Services Build Intelligent Transportation Systems Strengthen National Security

Manage Resources More Effectively

Improve Public Safety



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The challenge: increasing operational efficiency, reducing fraud and waste.

Tax avoidance and tax evasion threaten government revenues. The US Senate estimates revenue losses from tax evasion by U.S.-based firms and individuals at around 100 billion dollars a year. In many other countries, the sums run into billions of euros. This means fewer resources for infrastructure and services such as education and health, lowering standards of living in both developed and developing economies.



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How can improving taxpayer services and tax compliance help governments spend less money to collect money?

Your result• Improved identification of fraudulent activity• Compliance and auditability • Improved case management • Enhanced tax modernization and policy alignment• Increased decision making in shorter timeframes

Increase efficiency, fairness, reduce cost of compliance by:Increase efficiency, fairness, reduce cost of compliance by:

Lowering levels of fraud, waste and errorLowering levels of fraud, waste and error

Making it easier to interact with your AgencyMaking it easier to interact with your Agency

Improving operationalefficiency

Improving operationalefficiency

SmarterServicesSmarterServices



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Servicio de Administracion Tributaria (SAT) Mexico modernizes their legacy tax collection system to raise collections and cut costs.

grew 8.1%The total real tax collection for SAT

grew 12.9%The income tax collection

Business problem: Tax collection as a percentage of GDP has been historically low in this country because the tax law is very complex, and it was a time consuming process for citizens register for—let alone pay taxes

Solution: “Solucion Integral,” a collection of services supported by an heterogeneous technological platform, and developed on a SOA platform

The added value tax collection

grew 3.4%



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New York State Department of Taxation and Finance applies advanced analytics to strengthen tax compliance and increase gap.

the agency Since its inception,

$1.2 billion

has decreased improper payments by

Business problem: investigations revealing widespread tax evasion, and highly unreliable and more expensive “pay-and-chase” policies drove the agency to the realization that they needed to predict in order to prevent

Solution: Reposition the role of analytics (the Case Identification Selection System, or CISS) directly into the mainstream review process, making it predictive

“The fact that we’ve been able to evolve it to where it is now – when it’s so desperately needed – has made it an important fiscal tool for the state. … When I hear anecdotally that New York is getting to become a much more difficult place to cheat, I know we’re making the impact that we set out to make – which isn’t to increase our enforcement actions, but to change mindsets.”

—William Comiskey, Deputy Commissioner, Office of Tax Enforcement, NYS Department of Taxation and Finance



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Belgium Ministry of Finance automates and optimizes their processes to expedite case file management decisions.

Reduces

6 months

Case File Management Decisions from

Business problem: The physical nature of paper-based files did not allow for effective communication between regions, tax departments or citizens, caused delays in answering claims, resolving litigation or distributing work

Solution: Automate and optimize processes to improve visibility, balance and control, and build accountability

“We can follow up on each file, quickly respond to citizen calls, and even connect them directly with the agent handling the case at that particular time.”

—Anemie Clasen, Inspector at Antwerp, BMoF

to

days



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Efficient, effective and fair tax administration. How do you build a trusted experience? Where do you want to begin?

Business outcomes• Identification of fraudulent activity

• Compliance and auditability

• Improved case management

Transformational stages

Valu

eV

alue

Improve Access to Information And Resources


MaturityMaturity

ManagedataManagedata

AnalyzepatternsAnalyzepatterns

OptimizeoutcomesOptimizeoutcomes

Improve Revenue Collection, Compliance & Oversight


Enhance Public TrustsEnhance Public Trusts

• Enhanced tax modernization and policy alignment

• Increased decision making in shorter timeframes

Single View of ConstituentSingle View of Constituent

Improve Fiscal ManagementImprove Fiscal Management



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We can help you plan and execute critical aspects of your journey.

IBM solution area:Tax and Revenue Management

• Single View of Client

• Tax Modernization

• Fraud, Abuse and Waste Prevention

• Single View of Client

• Tax Modernization

• Fraud, Abuse and Waste Prevention

• Financial Performance Management

• Budgeting and Risk Management

• Financial Performance Management

• Budgeting and Risk Management

Transformational stages

Valu

eV

alue

MaturityMaturity

ManagedataManagedata



Enhance Public TrustsEnhance Public Trusts

Improve Fiscal ManagementImprove Fiscal Management

AnalyzepatternsAnalyzepatterns

OptimizeoutcomesOptimizeoutcomes



Single View of ConstituentSingle View of Constituent



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We apply systems thinking, tools and expertise to help you manage complexity and the innovation process.

InfrastructureArchitecture

InfrastructureArchitecture

ApplicationArchitectureApplication

Architecture

Business Architecture

Business Architecture

Componentized target operating model that enables mission definition and transformation

Componentized target operating model that enables mission definition and transformation

Process transformationProcess transformation

Tax administration processes, services and data, structured to enable the speed and flexibility required to be efficient and effective

Tax administration processes, services and data, structured to enable the speed and flexibility required to be efficient and effective

Application transformationApplication transformation

Systems that underpin process, application and technology blueprintsSystems that underpin process, application and technology blueprints

Operating environment transformationOperating environment transformation



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Single View of Tax Payer Provides single view of trusted information to downstream processes.

Enables you to…

• Improve rate of correctly identifying tax payers

• Improve targeting of audit and collection cases

• Improve and streamline processes to manage audit and collection cases

• Make information-driven, fact-based decisions instead of anecdotal or sample-based

Internal dataInternal data

External dataExternal data

CaseMgmtCaseMgmt

CitizenAccessCitizenAccess

Trusted IDTrusted ID

Fraud MgmtFraud Mgmt

CustomerServiceCustomerService

• Understand

• Assemble

• Cleanse

• Normalize

• Understand

• Assemble

• Cleanse

• Normalize

• CondensedUp-to-date citizen/client hub

• CondensedUp-to-date citizen/client hub

• Identify multicultural names

• Relationship awareness

• Identify multicultural names

• Relationship awareness

• Harmonize

• Citizen

• Service

• Location

• Provider

• Provision

• Harmonize

• Citizen

• Service

• Location

• Provider

• Provision



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Detecting and Preventing Fraud, Waste and Abuse.Applies advanced analytics to improve tax compliance, fairness and revenue collection

Enables you to…

• Increase overall tax revenue

• Enforce fairness of the tax code

• Predict fraud based on historical behavior

Stop fraudulent income tax returns

Stop fraudulent income tax returns

Prioritizedelinquent tax debts

Prioritizedelinquent tax debts

PredictiveCompliancePredictiveCompliance



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Tax Modernization Creates a taxpayer-centered Information Hub

Enables you to…

• Maximize flexibility and adaptability to change with SOA Architecture

• Enable tax agencies to focus on core functions of taxpayer service and compliance with SOA

• Improve customer service and lower costs with Multi-Channel Access

• Improve compliance while lowering cost of audit and control with tax audit and compliance solution

Property dataProperty data

CitizenCitizen

External informationExternal

information

Employers andfinancial institutions

Employers andfinancial institutions

TaxTax

EmploymentEmployment

• SOA architecture• Multi channel access• Tax audit and compliance

• SOA architecture• Multi channel access• Tax audit and compliance



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Financial Performance ManagementImproves the transparency and accountability of government entities

Enables you to…

• Enhance public trust

• Improve capital efficiency

• Analyze compliance and outcomes

• Manage audit and collections cases

BreakawayPrescriptive, real-time, pattern-based

strategies with situational context

BreakawayPrescriptive, real-time, pattern-based

strategies with situational context

DifferentiatingDifferentiating

CompetitiveCompetitive

FoundationalFoundational

Ad hocAd hoc

Business processintegrationBusiness processintegration

Process automationand workflowProcess automationand workflow

Task integrationTask integration

Command andcontrolCommand andcontrol

Predictions,contextual business

rules and patterns

Predictions,contextual business

rules and patterns

Master data management,

dashboards and scoreboards

Master data management,

dashboards and scoreboards

Data warehousesgovernance and

production reporting

Data warehousesgovernance and

production reporting

Spreadsheets andextracts

Spreadsheets andextracts



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What is your preferred starting point?

BAO Jumpstart for Information Management Foundation Connect people with trusted information, enabling them to make real-time decisions and act with confidence to deliver better outcomes.

BAO Jumpstart for Risk, Finance and Fraud Assess performance and fraud management capabilities, gain greater value from current enterprise analytics investments.

Business Process Management (BPM) Visioning and Roadmap Optimize the performance, visibility, and agility of business processes.



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Which implementation approach best supports your business objectives?

Business outcomes

Considerations

Options

• Identification of fraudulent activity

• Compliance and auditability

• Improved case management

Get the parts, build it yourself Work with a vendor to design and build it for you

Count on a strategic partner to implement and run the solution

Business Design Service Levels Deployment Models Funding Options

Access to skills, best practices, technology and financing must be evaluated from the beginning to deliver desired results. Access to skills, best practices, technology and financing must be evaluated from the beginning to deliver desired results.

• Enhanced tax modernization and policy alignment

• Increased decision making in shorter timeframes

manage government resources more effectively

Documents

improved tax

tax departments

income tax

tax avoidance

tax canada

tax law

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