## Box 1. Good Practices and Practices to avoid in Data Collection ## Source details **Canonical URL:** [Box 1. Good Practices and Practices to avoid in Data Collection](https://www.imf.org/-/media/files/publications/howtonotes/2023/english/htnea2023003.pdf) ## Other formats - [Markdown version](/-/media/files/publications/howtonotes/2023/english/htnea2023003.pdf.md) - [Structured JSON version](/-/media/files/publications/howtonotes/2023/english/htnea2023003.pdf.json) --- ### Overview - Data collection underpins the effectiveness of fiscalization. Data collection commences with the creation of the documents that taxpayers typically use to manage their business, such as sales invoices or fiscal cash register receipts, that are used for calculating and reporting tax obligations (OECD 2019b). Complete and accurate reporting of data to the tax administration relies on the timely capture of this documentation and data (OECD 2013). - Traditional tax reporting models rely on the periodic collection of aggregated business activity data without detail of individual transactions. Fiscalization and digitalization provide tax administrations with real-time and more granular data on a taxpayer’s business transactions. - Appendix 1 sets out several models of data collection, which can be grouped into four categories (OECD 2022b; Casey and Castro 2015; Pagero 2022). The centralized model and the clearance models are commonly referred to as closed systems; the automated reporting after issue model and the real-time model are commonly referred to as open systems. - Tax administrations also collect a range of data from third-party sources (banking and credit card institutions, other government departments/regulators, local governments, business associations, informants, consumers, and international exchange of information). A data warehouse will be needed to hold the vast array of data collected through the fiscalization processes and third-party sources. ### Good Practices - Ensure a legal basis for implementing fiscalization. - Carefully consider the scope of fiscalization, such as size of taxpayers, sectors, and activities. - Limit the number of taxpayers that are exempted from fiscalization. - Ensure that data collection is based on processes currently used by businesses (cash registers and invoices), thus avoiding additional burdens on business. - Recognize and emphasize in communications that fiscalization can help businesses to comply and make it difficult to not comply. - Carefully consider the choice, availability, and procurement of fiscal equipment, software, and servicing. These should be free of cost for taxpayers, and taxpayers should have equipment/software options from which to select the most suitable for their business needs. - Carefully define the fields of the collected data and the design of the database. - Have extensive communication: - Emphasizing and advertising the ease and convenience that fiscalization offers to taxpayers. - Emphasizing the benefits of fiscalization, such as fair competition, prefilling, and avoiding noncompliance costs. - Encouraging correct tax declarations of turnover by informing and demonstrating to taxpayers and the community that the tax administration can identify noncompliers and will act. ### Practices to Avoid - High costs to taxpayers in terms of inefficient or costly software and hardware that are used to generate sales invoices and receipts. - Failing to act on nonissuance of invoices by identifying and sanctioning taxpayers who do not issue invoices. - Leaving taxpayers without answers to their questions and requests/complaints. - Neglecting the registration of unregistered taxpayers (a preliminary step to fiscalization). - Lacking fiscal devices on the market and having inadequate information technology support (infrastructure and staff). - Failing to create laws for misdemeanors and criminal liability for failure to register and comply with regulations. - Accepting the old ways of working with fiscal cash registers or invoices by noncompliant taxpayers. - Failing to take action where unlicensed software and/or equipment has been identified. *How to Implement Electronic Fiscal Reporting (Fiscalization) — Box 1. Good Practices and Practices to avoid in Data Collection* ### Box 3. Good practices and Practices to avoid in Integrating Fiscalization with CRM ### Good Practices - Publicly demonstrate to taxpayers and the community that the fiscalization data they provide is being used to manage taxpayer compliance. For example, publicly demonstrate that taxpayers who do not issue receipts are being identified and acted upon or taxpayers that do not declare fiscalized sales are being addressed. - Implement an autonomous CRM function within the tax administration that operates based on data analysis to do the following: - Prevent noncompliance and improve voluntary compliance. - Support taxpayers before filing returns. - Interact with taxpayers after risk detection promoting self-regulation. - Implement CRM procedures: - Identify all potential risks and define measures to mitigate the risks using CRM. - Identify possible restrictions in legal regulations and prepare an adequate legal framework. - Ensure transparency and engagement of all organizational units of the tax administration in the decision-making process, allocating tasks and responsibilities of all participants in the process. - Place special emphasis on representatives of business associations, representatives of accounting institutes, and the information technology community. - Automate work processes need to handle substantial amounts of fiscalization data. Processes include risk identification (risk criteria), risk assessment/prioritization, strategy development and mitigation actions, real-time interactions with taxpayers through tax administration website sharing results of data analysis, before- and after-returns submission, real-time email, telephone, letter, field visit, audit, investigation, monitoring returns and results from actions, making improvements. - Make sure data that is relevant to the specific needs of field staff, auditors, and investigators is available to them. Processes should be automated to provide the relevant data to auditors when an audit case is selected. ### Practices to Avoid - Underestimating the capacity and will of individual taxpayers to continue to evade taxes (for example, there are cases of dual programs within fiscal devices). Remain vigilant, act on tip-offs, sanction deliberate noncompliers. - Thinking that all noncompliance will be solved by fiscalization. Taxpayers will change their behavior to remain noncompliant. They may for example register correctly, file on time, report correctly, but fail to pay. Be prepared to monitor not just what taxpayers report and enforcement results but also to identify risks and monitor other pillars of compliance. - Lacking sufficient training for field staff to use fiscalization data. - Partially implementing fiscalization and not completing the operation may be less effective than no fiscalization. *Source: IMF | How to Note — Box 3.* ### Appendix 4. Monitoring and Measuring the Impact of Fiscalization ### Key measures to benchmark (Table 2: Examples of Measuring the Impact of Fiscalization) - Net VAT declared as percentage of GDP - Likely change: Increase is likely, due to increase in sales VAT declared and reduction in false purchase VAT. - Notes: Net VAT declared = VAT on sales plus import VAT minus VAT on purchases (including import VAT). - Net VAT collections as percentage of GDP - Likely change: Increase is likely, due to increase in sales VAT declared and reduction in purchase VAT. - Notes: Net VAT collections take into account the influence of changes in debt. - Registration - Likely change: Decrease in registrations is possible as taxpayers seek to opt out of the tax system or not enter it. - Notes: Measure the number registered, sector, market segment, average turnover. - Registration clusters - Likely change: Clusters just below registration threshold may increase as taxpayers seek to opt out of system because it is transparent. - Filing - Likely change: Filing may decline as taxpayers choose this as a method of noncompliance. - Notes: Prepopulation will likely prompt earlier filing. Measure numbers and percentage filed and timeliness across sectors and market segment. - Correct reporting - Likely change: Compliance is likely to improve: (1) Declared sales will likely increase, (2) claimed purchases will likely decrease, (3) ratio of sales to purchases will likely improve. Profit likely increases: for VAT, value of zero/exempt purchases (misdescribed) will likely increase to artificially reduce net VAT. - Notes: Measure sectors, market segments. Measure sales, purchases (taxable and nontaxable). Compare trends. Compare to GDP changes. - Debt - Likely change: Compliance pillar is most likely to increase in noncompliance. Taxpayers who can’t be noncompliant in reporting will choose to not pay on time or not pay at all. - Notes: Likely time lag is 6 to 12 months before debt risk becomes apparent. Closely monitor all debt: Sector/Segment/All tax types (VAT return payment and wages withholding will be first to decline). - Deregistration - Likely change: Increase in false deregistration is likely as some businesses seek to leave the system. - Bankruptcy - Likely change: Increase in contrived bankruptcy is likely as taxpayers fail to pay tax debt and are forced into bankruptcy. - Phoenix behavior - Likely change: This is a likely means of noncompliance if fiscalization forces taxpayers to declare all sales and claim only correct purchases. Businesses may respond by failing to pay, closing the business, and setting up once more under a different company. - Fictitious registrations and “missing trader” - Likely change: This is likely to increase. Companies are likely to be created to produce fictitious sales for conspiring buyers. - Notes: The fictitious business will be seemingly genuine (registered, filing, reporting but not paying) and will go missing, bankrupt, or phoenix. - Bank payment versus cash - Likely change: Increase use of cash, especially among B2B. - Notes: Monitor cash in economy and flow of payments through banking system. - Shift to online trading - Likely change: Increase online trading paid with cash on delivery. - Internal use of resources—functional risk - Likely change: Staff allocated to verifying fiscalization data problems, mismatches, and apparent anomalies will likely increase. - Notes: Measure number, value, and impact of interventions by HQ/field staff; monitor the types of risks being verified by assessing likelihood and consequence of a risk occurring; focus on highest risks and do not chase every apparent error/risk. - Perceptions about taxpayer behavior - Notes: Ask taxpayers directly what the impact has been on their costs, efficiency, compliance. Ask taxpayers what they think the impact is on other taxpayers (most likely get a more truthful answer). Ask citizens what they are observing. - Perceptions within tax administration and regional offices - Notes: Staff will observe changes from their perspectives as administrators and will have observations from their private life. Ask questions similar to those asked of taxpayers. ### Monitoring priorities and timing - Emphasize early indicators available from VAT because VAT is the earliest reported (monthly, quarterly) tax and reported at the transaction level. - Monitor shifts in filing behavior, registration patterns, and debt dynamics closely, with attention to the likely 6 to 12 months lag before debt risk becomes apparent. - Track payment flows (bank versus cash) and emergence of phoenix, fictitious registrations, and missing-trader behavior as likely adverse responses to greater transaction transparency. ### Appendix 5. Systems building blocks to implement fiscalization ### Implementation phase 1: Data collection - 1.1 Definition of data and format to be reported by taxpayers - Goal: Collect all data in a structured way - Functionalities: Design of databases; Information validation modes; Interfaces with other databases and systems - 1.2 Definition of communication channels - Goal: Use of appropriate channels for the types of taxpayers - Functionalities: Online data communication; Data communication by file; Data communication by web service - 1.3 Implementation of the data submission system - Goal: Definition of information input interfaces through the different channels - Functionalities: Insertion of information; Validations; Database recording; Proof of delivery; Consultation of information by issuers and acquirers - 1.4 Collected information processing system - Goal: Verification of the consistency of the information collected - Functionalities: Central validation of information; Notification of errors or omissions to contributors; Treatment of declarative defaulters - 1.5 App for consumers - Goal: Sending and querying information by consumers - Functionalities: Consultation of documents in which the taxpayer appears as acquirer; Sending documents not sent by the issuers - 1.6 Data model design - Goal: Definition of the data model, logical and physical - Functionalities: Definition of tables; Attributes (type and domain); Indexes ### Implementation phase 2: Data analysis to detect nonconformities - 2.1 Design and validation of data analysis rules - Goal: Allow universal and automated control of taxpayer obligations - Functionalities: Definition of rules for detecting nonconformities and noncompliance situations; Implementation of analysis and control algorithms; Detection of declarative payment and registration nonconformities - 2.2 Definition of outputs and documents to be issued - Goal: Definition of detection algorithm outputs - Functionalities: Definition of documents; Online availability of issued documents ### Implementation phase 3: Electronic document signature and generation system - 3.1 Electronic document generation and management system - Goal: Dematerialize and automate processes and ensure authenticity of documents - Functionalities: Generation of all internal procedures’ documents; Generation of all communications with taxpayers; Electronic signature functionality - 3.2 Communication system and electronic notifications - Goal: Dematerialize and automate communications with taxpayers - Functionalities: Issue of documents; Interface with taxpayers and provision of an electronic mailbox; Interface with all systems ### Implementation phase 4: Voluntary compliance support system - 4.1 Alert system before the end of deadlines for compliance with legal obligations - Goal: Support taxpayers and prevent default and noncompliance - Functionalities: Information to taxpayers of detected nonconformities; Design of documents; Shipping through available channels; Sending automation - 4.2 Communication interface and receipt of information from taxpayers - Goal: Using information and interaction to promote voluntary compliance - Functionalities: Consultation of documents and information provided by the tax administration; Possibility for taxpayers to justify the divergence or send additional returns for regularization - 4.3 Nonconformity analysis and treatment procedure management system - Goal: Internal automated nonconformity processing system - Functionalities: Analysis of taxpayer responses; Completion of noncompliance procedures; Processing of additional or corrective settlements ### Implementation phase 5: Automated audit system - 5.1 Automating the phases of the audit procedure - Goal: Correct all tax evasion situations detected by the system - Functionalities: Opening of audits; Generation of all documents; Interaction with taxpayers and internal services - 5.2 Additional settlement system - Goal/Functionalities: Missing tax assessment; Treatment of additional returns; Treatment of official declarations; Issuance of additional settlements ### Implementation phase 6: Sanctioning and coercive systems - 6.1 Administrative sanctioning procedures management systems - Goal: Automation of processes for applying sanctions - Functionalities: Opening of processes; Issue of documents; Automated process management - 6.2 Criminal investigation system - Goal: Partial automation of criminal investigation - Functionalities: Opening of processes; Automated management of processes (such as in case of nonpayment of VAT) - 6.3 Enforcement collection system - Goal: Partial automation of enforced collection - Functionalities: Opening and management of processes; Communications with taxpayers; Automating credit pledges ### Implementation phase 7: Other - 7.1 Prefilling VAT returns - Goal: Filling automation - Functionalities: Generation of statements; Validation by taxpayers; Automating official settlements - 7.2 Other data collection and analysis - Goal: Expand automated control - Functionalities: Transport documents; Inventory data; Accounts data; Financial data *IMF | How to Note — Appendix 4 and Appendix 5 (from htnea2023003)* ### Box 1. Good Practices and Practices to avoid in Data Collection ____________________________ 5 ### Box 1. Good Practices and Practices to avoid in Data Collection ### Overview - Data collection underpins the effectiveness of fiscalization. Data collection commences with the creation of the documents that taxpayers typically use to manage their business, such as sales invoices or fiscal cash register receipts, that are used for calculating and reporting tax obligations (OECD 2019b). Complete and accurate reporting of data to the tax administration relies on the timely capture of this documentation and data (OECD 2013). - Traditional tax reporting models rely on the periodic collection of aggregated business activity data without detail of individual transactions. Fiscalization and digitalization provide tax administrations with real-time and more granular data on a taxpayer’s business transactions. - Appendix 1 sets out several models of data collection, which can be grouped into four categories (OECD 2022b; Casey and Castro 2015; Pagero 2022). The centralized model and the clearance models are commonly referred to as closed systems; the automated reporting after issue model and the real-time model are commonly referred to as open systems. - Tax administrations also collect a range of data from third-party sources (banking and credit card institutions, other government departments/regulators, local governments, business associations, informants, consumers, and international exchange of information). A data warehouse will be needed to hold the vast array of data collected through the fiscalization processes and third-party sources. ### Good Practices - Ensure a legal basis for implementing fiscalization. - Carefully consider the scope of fiscalization, such as size of taxpayers, sectors, and activities. - Limit the number of taxpayers that are exempted from fiscalization. - Ensure that data collection is based on processes currently used by businesses (cash registers and invoices), thus avoiding additional burdens on business. - Recognize and emphasize in communications that fiscalization can help businesses to comply and make it difficult to not comply. - Carefully consider the choice, availability, and procurement of fiscal equipment, software, and servicing. These should be free of cost for taxpayers, and taxpayers should have equipment/software options from which to select the most suitable for their business needs. - Carefully define the fields of the collected data and the design of the database. - Have extensive communication: - Emphasizing and advertising the ease and convenience that fiscalization offers to taxpayers. - Emphasizing the benefits of fiscalization, such as fair competition, prefilling, and avoiding noncompliance costs. - Encouraging correct tax declarations of turnover by informing and demonstrating to taxpayers and the community that the tax administration can identify noncompliers and will act. ### Practices to Avoid - High costs to taxpayers in terms of inefficient or costly software and hardware that are used to generate sales invoices and receipts. - Failing to act on nonissuance of invoices by identifying and sanctioning taxpayers who do not issue invoices. - Leaving taxpayers without answers to their questions and requests/complaints. - Neglecting the registration of unregistered taxpayers (a preliminary step to fiscalization). - Lacking fiscal devices on the market and having inadequate information technology support (infrastructure and staff). - Failing to create laws for misdemeanors and criminal liability for failure to register and comply with regulations. - Accepting the old ways of working with fiscal cash registers or invoices by noncompliant taxpayers. - Failing to take action where unlicensed software and/or equipment has been identified. *How to Implement Electronic Fiscal Reporting (Fiscalization) — Box 1. Good Practices and Practices to avoid in Data Collection* ### Box 3 sets out good practices and practices to avoid in CRM. ### Box 3. Good practices and Practices to avoid in Integrating Fiscalization with CRM ### Good Practices - Publicly demonstrate to taxpayers and the community that the fiscalization data they provide is being used to manage taxpayer compliance. For example, publicly demonstrate that taxpayers who do not issue receipts are being identified and acted upon or taxpayers that do not declare fiscalized sales are being addressed. - Implement an autonomous CRM function within the tax administration that operates based on data analysis to do the following: - Prevent noncompliance and improve voluntary compliance. - Support taxpayers before filing returns. - Interact with taxpayers after risk detection promoting self-regulation. - Implement CRM procedures: - Identify all potential risks and define measures to mitigate the risks using CRM. - Identify possible restrictions in legal regulations and prepare an adequate legal framework. - Ensure transparency and engagement of all organizational units of the tax administration in the decision-making process, allocating tasks and responsibilities of all participants in the process. - Place special emphasis on representatives of business associations, representatives of accounting institutes, and the information technology community. - Automate work processes need to handle substantial amounts of fiscalization data. Processes include risk identification (risk criteria), risk assessment/prioritization, strategy development and mitigation actions, real-time interactions with taxpayers through tax administration website sharing results of data analysis, before- and after-returns submission, real-time email, telephone, letter, field visit, audit, investigation, monitoring returns and results from actions, making improvements. - Make sure data that is relevant to the specific needs of field staff, auditors, and investigators is available to them. Processes should be automated to provide the relevant data to auditors when an audit case is selected. ### Practices to Avoid - Underestimating the capacity and will of individual taxpayers to continue to evade taxes (for example, there are cases of dual programs within fiscal devices). Remain vigilant, act on tip-offs, sanction deliberate noncompliers. - Thinking that all noncompliance will be solved by fiscalization. Taxpayers will change their behavior to remain noncompliant. They may for example register correctly, file on time, report correctly, but fail to pay. Be prepared to monitor not just what taxpayers report and enforcement results but also to identify risks and monitor other pillars of compliance. - Lacking sufficient training for field staff to use fiscalization data. - Partially implementing fiscalization and not completing the operation may be less effective than no fiscalization. *Source: IMF | How to Note — Box 3.* ### Appendix 4. Monitoring and Measuring the Impact of ### Appendix 4. Monitoring and Measuring the Impact of Fiscalization ### Key measures to benchmark (Table 2: Examples of Measuring the Impact of Fiscalization) - Net VAT declared as percentage of GDP - Likely change: Increase is likely, due to increase in sales VAT declared and reduction in false purchase VAT. - Notes: Net VAT declared = VAT on sales plus import VAT minus VAT on purchases (including import VAT). - Net VAT collections as percentage of GDP - Likely change: Increase is likely, due to increase in sales VAT declared and reduction in purchase VAT. - Notes: Net VAT collections take into account the influence of changes in debt. - Registration - Likely change: Decrease in registrations is possible as taxpayers seek to opt out of the tax system or not enter it. - Notes: Measure the number registered, sector, market segment, average turnover. - Registration clusters - Likely change: Clusters just below registration threshold may increase as taxpayers seek to opt out of system because it is transparent. - Filing - Likely change: Filing may decline as taxpayers choose this as a method of noncompliance. - Notes: Prepopulation will likely prompt earlier filing. Measure numbers and percentage filed and timeliness across sectors and market segment. - Correct reporting - Likely change: Compliance is likely to improve: (1) Declared sales will likely increase, (2) claimed purchases will likely decrease, (3) ratio of sales to purchases will likely improve. Profit likely increases: for VAT, value of zero/exempt purchases (misdescribed) will likely increase to artificially reduce net VAT. - Notes: Measure sectors, market segments. Measure sales, purchases (taxable and nontaxable). Compare trends. Compare to GDP changes. - Debt - Likely change: Compliance pillar is most likely to increase in noncompliance. Taxpayers who can’t be noncompliant in reporting will choose to not pay on time or not pay at all. - Notes: Likely time lag is 6 to 12 months before debt risk becomes apparent. Closely monitor all debt: Sector/Segment/All tax types (VAT return payment and wages withholding will be first to decline). - Deregistration - Likely change: Increase in false deregistration is likely as some businesses seek to leave the system. - Bankruptcy - Likely change: Increase in contrived bankruptcy is likely as taxpayers fail to pay tax debt and are forced into bankruptcy. - Phoenix behavior - Likely change: This is a likely means of noncompliance if fiscalization forces taxpayers to declare all sales and claim only correct purchases. Businesses may respond by failing to pay, closing the business, and setting up once more under a different company. - Fictitious registrations and “missing trader” - Likely change: This is likely to increase. Companies are likely to be created to produce fictitious sales for conspiring buyers. - Notes: The fictitious business will be seemingly genuine (registered, filing, reporting but not paying) and will go missing, bankrupt, or phoenix. - Bank payment versus cash - Likely change: Increase use of cash, especially among B2B. - Notes: Monitor cash in economy and flow of payments through banking system. - Shift to online trading - Likely change: Increase online trading paid with cash on delivery. - Internal use of resources—functional risk - Likely change: Staff allocated to verifying fiscalization data problems, mismatches, and apparent anomalies will likely increase. - Notes: Measure number, value, and impact of interventions by HQ/field staff; monitor the types of risks being verified by assessing likelihood and consequence of a risk occurring; focus on highest risks and do not chase every apparent error/risk. - Perceptions about taxpayer behavior - Notes: Ask taxpayers directly what the impact has been on their costs, efficiency, compliance. Ask taxpayers what they think the impact is on other taxpayers (most likely get a more truthful answer). Ask citizens what they are observing. - Perceptions within tax administration and regional offices - Notes: Staff will observe changes from their perspectives as administrators and will have observations from their private life. Ask questions similar to those asked of taxpayers. ### Monitoring priorities and timing - Emphasize early indicators available from VAT because VAT is the earliest reported (monthly, quarterly) tax and reported at the transaction level. - Monitor shifts in filing behavior, registration patterns, and debt dynamics closely, with attention to the likely 6 to 12 months lag before debt risk becomes apparent. - Track payment flows (bank versus cash) and emergence of phoenix, fictitious registrations, and missing-trader behavior as likely adverse responses to greater transaction transparency. ### Appendix 5. Systems building blocks to implement fiscalization - Implementation phase 1: Data collection - 1.1 Definition of data and format to be reported by taxpayers - Goal: Collect all data in a structured way - Functionalities: Design of databases; Information validation modes; Interfaces with other databases and systems - 1.2 Definition of communication channels - Goal: Use of appropriate channels for the types of taxpayers - Functionalities: Online data communication; Data communication by file; Data communication by web service - 1.3 Implementation of the data submission system - Goal: Definition of information input interfaces through the different channels - Functionalities: Insertion of information; Validations; Database recording; Proof of delivery; Consultation of information by issuers and acquirers - 1.4 Collected information processing system - Goal: Verification of the consistency of the information collected - Functionalities: Central validation of information; Notification of errors or omissions to contributors; Treatment of declarative defaulters - 1.5 App for consumers - Goal: Sending and querying information by consumers - Functionalities: Consultation of documents in which the taxpayer appears as acquirer; Sending documents not sent by the issuers - 1.6 Data model design - Goal: Definition of the data model, logical and physical - Functionalities: Definition of tables; Attributes (type and domain); Indexes - Implementation phase 2: Data analysis to detect nonconformities - 2.1 Design and validation of data analysis rules - Goal: Allow universal and automated control of taxpayer obligations - Functionalities: Definition of rules for detecting nonconformities and noncompliance situations; Implementation of analysis and control algorithms; Detection of declarative payment and registration nonconformities - 2.2 Definition of outputs and documents to be issued - Goal: Definition of detection algorithm outputs - Functionalities: Definition of documents; Online availability of issued documents - Implementation phase 3: Electronic document signature and generation system - 3.1 Electronic document generation and management system - Goal: Dematerialize and automate processes and ensure authenticity of documents - Functionalities: Generation of all internal procedures’ documents; Generation of all communications with taxpayers; Electronic signature functionality - 3.2 Communication system and electronic notifications - Goal: Dematerialize and automate communications with taxpayers - Functionalities: Issue of documents; Interface with taxpayers and provision of an electronic mailbox; Interface with all systems - Implementation phase 4: Voluntary compliance support system - 4.1 Alert system before the end of deadlines for compliance with legal obligations - Goal: Support taxpayers and prevent default and noncompliance - Functionalities: Information to taxpayers of detected nonconformities; Design of documents; Shipping through available channels; Sending automation - 4.2 Communication interface and receipt of information from taxpayers - Goal: Using information and interaction to promote voluntary compliance - Functionalities: Consultation of documents and information provided by the tax administration; Possibility for taxpayers to justify the divergence or send additional returns for regularization - 4.3 Nonconformity analysis and treatment procedure management system - Goal: Internal automated nonconformity processing system - Functionalities: Analysis of taxpayer responses; Completion of noncompliance procedures; Processing of additional or corrective settlements - Implementation phase 5: Automated audit system - 5.1 Automating the phases of the audit procedure - Goal: Correct all tax evasion situations detected by the system - Functionalities: Opening of audits; Generation of all documents; Interaction with taxpayers and internal services - 5.2 Additional settlement system - Goal/Functionalities: Missing tax assessment; Treatment of additional returns; Treatment of official declarations; Issuance of additional settlements - Implementation phase 6: Sanctioning and coercive systems - 6.1 Administrative sanctioning procedures management systems - Goal: Automation of processes for applying sanctions - Functionalities: Opening of processes; Issue of documents; Automated process management - 6.2 Criminal investigation system - Goal: Partial automation of criminal investigation - Functionalities: Opening of processes; Automated management of processes (such as in case of nonpayment of VAT) - 6.3 Enforcement collection system - Goal: Partial automation of enforced collection - Functionalities: Opening and management of processes; Communications with taxpayers; Automating credit pledges - Implementation phase 7: Other - 7.1 Prefilling VAT returns - Goal: Filling automation - Functionalities: Generation of statements; Validation by taxpayers; Automating official settlements - 7.2 Other data collection and analysis - Goal: Expand automated control - Functionalities: Transport documents; Inventory data; Accounts data; Financial data *IMF | How to Note — Appendix 4 and Appendix 5 (from htnea2023003)* --- _Source: https://www.imf.org/-/media/files/publications/howtonotes/2023/english/htnea2023003.pdf_