Estonia might be the first country in the world to abolish tax declarations

Marek Helm, the head of the Estonian Tax and Customs Board, was asked about the tax authority’s future vision at the press conference. The idea is that no-one needs to visit tax authorities anymore. All you need in the future is a smartphone for checking whether all taxes are duly paid.

The main idea of the new vision is to abolish statutory filing of tax reports by replacing it with a fully automatic system. In addition, VAT information could be also collected automatically. This reorganization demands adjustments as the current accrual-based VAT system needs to be recalculated once a quarter.

The new approach means that the tax authority would receive automatic information about wage transfers, etc.

The change involves not only amending laws, development and introduction of standard information exchange systems but also all accounting software will be fully compatible with the tax authority system. This extensive change is very expensive and will be covered by customers. The introduction of the new system is a new approach to people as the automatic system must enable full access to the taxpayer’s records.

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By Richard J. Witismann on 16 February, 2016