Maximize tax compliance through local government digitization
by Azavar Executive Leadership, on May 18, 2021 at 10:15 AM
Find out how to rise above common obstacles
Between budget concerns, fewer staff, and more needs, local governments are working harder than ever. But you still need to carve out time to make critical updates that offer taxpayers more flexibility.
One example? Business taxpayers are desperate for local governments to update tax remittance or licensing processes. Here are some common complaints:
- Far too many local governments still require paper forms and checks.
- Some municipalities use difficult online systems that aren’t mobile-friendly.
- Customers need help during off-hours when government offices are closed.
Adding digital registration and payment tools offer clear benefits—both for business taxpayers as well as municipal employees. Take a look at the top advantages:
- Added convenience and flexibility for busy taxpayers who want to pay when they have time—not when government offices are open.
- Fewer errors caused by poor handwriting on paper forms, lost paperwork and checks, etc.
- Increased social distancing via remote remittance—important even after the pandemic lets up.
- Satisfied business community that feel local government understands their needs.
However, when local governments are saddled with out-of-date, paper-based equipment and processes, civic employees simply can’t provide the kind of experience that today’s savvy taxpayers expect. But making the leap into local government digitization doesn’t have to be so intimidating. All you need is a smart partner who understands the challenges of local governments, what you’re up against, and how to answer common concerns.
Let’s take a look at three of the top obstacles faced when local governments consider making the jump to an all-digital tax administration and compliance platform.
“We’re just stretched so thin. We can’t take the time to evaluate, select, and onboard new tax administration software.”
This is legitimate. Everyone is stretched thin—but adding a tax compliance software solution doesn’t have to be hard. Here’s what you should look for when choosing a technology partner.
- Make sure your prospective partner really understands local government, with a proven track record of case studies and customer references.
- Smart implementation teams take the load off your shoulders immediately with a documented schedule, process, and deliverables.
- Reports should seamlessly integrate with your revenue-management software—or your partner should figure it out for you.
- Staff training should be conducted by your technology partner, bringing in users from different departments.
- Ideal tech solutions should also come with tech support, especially outside of typical business hours.
The online portal [our previous provider] gave us rarely worked. When it did, it wasn’t giving us the information that we needed. When considering new providers, we didn’t want to get burned again.”
— Matt Parker, Hudson, New York | Read the case study
“We have put a freeze on spending.”It’s important to rein in costs—but not at the expense of critical investment in basic functioning services. Dollars spent on modernizing your tax-compliance software will absolutely come back through more predictable revenue. Let’s take a look:
- When your municipality makes it easier for taxpayers to remit taxes and fees, they are more likely to pay, pay more regularly, and pay in full.
- Taxpayers that stay current don’t end up in collections, which requires significant expense and time.
- Moving tax expenses online saves office expenses, but also employee time that can be reallocated to more high-impact activities, like economic-development programs.
- Uncover revenue leaks by adding a revenue discovery system that conducts compliance audits. Paired with a digital solution for tax and fee registration, filing, payment, and reporting... you’ll boost compliance going forth.
“We prefer our manual, paper-based methods of tax collection and are not interested in automation or digitization.”
There’s value in the familiar—even when the processes you’ve been using no longer serve your objectives. Acknowledge the concern, but don’t let it trip you up.
Make the case that digitization offers more long-term benefits than short-term challenges. Ask your technology partner for help, such as:
- Success stories featuring real metrics from recent customers similar to your community.
- References from key decision-makers in other communities that share your challenges.
- Industry-wide statistics on how local governments spend 20%+ of IT budgets on cloud-computing solutions, similar to corporate America’s investment.