When it comes to transforming the business of tax agencies, big data has a crucial role to play. After all, as a transaction business today’s tax agency is dealing with vast amounts of data on a daily basis. But how do you turn that data into actionable insight?
It’s a good question. And it is similar to one that Capgemini encountered last year in the private sector when we commissioned a survey from the Economist Intelligence Unit. This looked at how organisations are using big data. What became apparent was that the vast majority (85%) of executives surveyed believed the issue was more about being able to analyse and act on big data in real-time than it was about the volume of data itself.
Analysing data is thus a primary objective for private companies seeking competitive advantage. It’s also high on the agenda for tax agencies around the world. Why? Because they have identified the value they can derive by combining big data and business analytics in the constant war against tax evasion, avoidance and outright criminality.
From the US to the UK, and from India to Australia, the need for governments to find revenue and cut costs is being met with this focus on big data and business analytics.
We’ve talked about our implementation of the Connect system for UK tax agency HMRC many times. Nonetheless it’s worth re-iterating that by taking an analytics-based approach and cross matching a billion internal and third party data items, Connect has helped HMRC increase tax yield by £1.4bn to-date. The data sources analysed include social media, bank details and other lifestyle indicators.
In India too we’re working with the Maharashtra Sales Tax Department (MSTD) in Mumbai to help transform their analytics capability. We implemented a Business Intelligence (BI) and Data Warehousing (DW) solution incorporating analytics that ensure MSTD is equipped to tackle tax evasion and fraud.