Directorate of Taxes
Successful strategies for striking the
balance between service and enforcement
activities
 Second meeting of the Forum on Tax Administration
 1-2 June 2005
 Dublin, Ireland
Sven Rune Greni
Head of Business Taxation Department
Directorate of Taxes
Norway
Directorate of Taxes
Service and enforcement - Competing
strategies?
 The ”political”/external perspective
 User-oriented tax administration
 The internal perspective
 Improved service = improved compliance
 The resource perspective
 Conclusion:
Both strategies have to be adressed the challenge is to find a good balance between
them
Directorate of Taxes
Compliance
 We will improve compliance, by
 Making it easy for the loyal taxpayers to comply
 Avoiding to make the loyal taxpayers disloyal
 Making it difficult to remain disloyal
 Having emphasis on defeating tax crime
Directorate of Taxes
Our strategic approach to improve
compliance
 Main strategies of the Norwegian Tax Administration 2005–
2008
 We shall make it easy to do things right
 We shall defeat black economy and tax
crime
 We shall cooperate actively with others
Directorate of Taxes
Our challenge - and our strategy
. .
Enforcement
Service
??
Directorate of Taxes
Our business model - general
features
 The assessment is based on information from the taxpayer
and third party information
 Legal requirement to inform Tax Authority
 Most taxpayers comply voluntarily
 Segmentation and selection based on risk analysis
 Sample control
 Three main categories of taxpayers
1) employees (wage earners)
2) self-employed and companies
3) tax criminals (underground economy)
Directorate of Taxes
Production - ”The green and red course”
Taxpayer information
3rd party information
Control
Production
Assessment
Revenue
Directorate of Taxes
Our business model for employees
 Pre-populated tax return
 Based on third party information
 Covering the most important tax relevant information
 Tailor-made tax return from 1999
 Internet reporting from 1999 - improved in 2005
 Examined and accepted/corrected by the taxpayer
 Planned new regime: ”Silent acceptance”
 Automatic controls (filters) in the production system
 Conclusion:
Most of the tax returns follow the ”green course”
Directorate of Taxes
Our business model - business area
segmentation
 Segmentation based on compliance risk assessment
 Influenced by whether tax professionals have assisted the
taxpayer (accountants, auditors, advisors)
 A targeted part of tax returns follow the ”red course”
 Transfer of resources from the employees area
 No strategic segmentation between self-employed and
companies
 Specific segments
 Large enterprises
 Petroleum companies
 Foreign taxpayers
Directorate of Taxes
Electronic services
 Electronic tax information on internet
 Rules, forms, etc.
 Electronic reporting - extensive use of internet
 Our strategy is to use the Altinn-portal
 Altinn is the common government internet portal of
Norway, developed by the Tax Administration,
Statistics Norway and the national Register Center
Directorate of Taxes
Electronic reporting - tax returns
80
70
60
50
2004
40
2005
30
20
10
0
Employees
Business
VAT
Directorate of Taxes
Enforcement - tax crime
 Make disloyal taxpayers loyal
 Avoid to make loyal taxpayers disloyal
 To maintain/increase the legitimacy
of the tax system and the tax administration
Directorate of Taxes
Enforcement - tax crime
 Establishment of 5 tax crime units
 Cooperation with Police & Prosecution authorities
 Forum on economic crime
 Cooperation since 1993 between
 Confederation of Norwegian Business and Industry,
 Norwegian Labour Union,
 Norwegian Association of Rural Municipalities
 Tax Administration
 Cooperation with building & construction industry
 The Serious Business-project
 Established a separate information unit
 Tax information about subcontractors
Directorate of Taxes
Conclusion: Better balance reached!
Enforcement
Service