Improving the effectiveness of tax collection: $30 in additional revenue for every $1 spent?
- Tera Allas, Jonathan Dimson
- Feb 2018
- McKinsey Global Institute
- International
An analysis of OECD countries’ expenditure on tax-collection effectiveness suggests high returns on investment. Improving tax-collection processes and cracking down on tax evasion are among the few ways governments can raise more revenue without prompting a vocal outcry from at least some parts of the electorate. Fortunately, it is becoming easier for governments to pursue these objectives. The trend toward cashless, digital transactions, coupled with the emergence of powerful data and analytics tools (new algorithms, visualization technologies, and data-management approaches, for instance) is helping tax authorities significantly reduce revenue leakages. At the same time, increasing automation of tax-collection tasks is helping governments reduce processing times, costs, errors, and fraud.
