## Leveraging Digital Technologies in Boosting Tax Collection

_IMF Working Papers, May 9, 2025_

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**Canonical URL:** [Leveraging Digital Technologies in Boosting Tax Collection](https://www.imf.org/en/publications/wp/issues/2025/05/09/leveraging-digital-technologies-in-boosting-tax-collection-566807)

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## Bibliographic details
- Authors: Manabu Nose, Nicola Pierri, Jiro Honda
- Published: May 9, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229008402.001

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### Summary findings
- Stronger firm digitalization is associated with higher tax revenues across countries and higher tax paid across firms.
- Firm digitalization significantly improves tax compliance among high-risk taxpayers, such as small and informal enterprises, particularly in the service sector.
- Digitalization not only broadens the corporate tax base but also plays a crucial role in improving tax compliance.
- Both country and firm-level analyses reveal a significant synergy between firm digitalization and the digitalization of tax administration (GovTech), underscoring the importance of promoting both to enhance tax collection.
- In developing countries, it is essential to create enabling environments for firm digitalization and GovTech and address constraints to achieve their synergy effects.

### Cross-country estimates
- A one-standard-deviation increase in firm digitalization is associated with an increase in tax revenues-to-GDP by up to 3 percentage points, conditional upon the level of digitalization of tax administration (GovTech).

### Firm-level analysis
- Firm-level analysis reveals that firm digitalization significantly improves tax compliance among high-risk taxpayers.
- The effect is particularly pronounced for small and informal enterprises and in the service sector.
- Results indicate both an expansion of the corporate tax base and improvements in compliance behavior at the firm level.

### Synergy between firm digitalization and GovTech
- Both country- and firm-level analyses show a significant synergy between firm digitalization and GovTech.
- Policy emphasis should therefore target both private-sector firm digitalization and public-sector digitalization of tax administration to realize joint gains in tax collection.
- In developing countries, addressing enabling-environment constraints is necessary to unlock the synergy effects.

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_Source: https://www.imf.org/en/publications/wp/issues/2025/05/09/leveraging-digital-technologies-in-boosting-tax-collection-566807_