Tax Return Online (VIV)

Published on: 10/06/2009
Document

Tax Return Online (VIV) combines the best practices in the Finnish way to tax citizens. Finnish Tax Administration (FTA) collects data electronically at the source: 95% of the data that employers and other payment makers file in, comes in an electronic form.

With these back office procedures, FTA is able to offer customers their tax return as complete as possible. The customer only needs to check the information entered by the FTA and fill in the missing items. If the information is already correct and complete, then that is all there is to it: the tax return has been filed.

If there are errors on the form, the taxpayer corrects them and files in the corrected form. Annually only 29 % of the customers (1,4 million out of 4,8 million)  make any corrections on their tax return.

The pre-filled tax proposal has already improved lives of millions. As the matter of fact, Prime Minister awarded the pre-filled tax return in 2006 as one of the major information society innovations. Customers thanked the FTA for saving them significant amount of time.

In spring 2008 it was possible for the first time to make some of the corrections over the Internet. 28 % of the target group then took their chance. Thank you notes poured in.

This year, FTA expanded VIV to the extent that already half of our annually filing customers (1,4 million) were able to do their whole filing over the Internet. Potentially 1 million customers had information that could be filed in the web.

VIV was open for customers 6/4/2009 - 14/5/2009. The basic elements of the eService can still be studied in demo in Finnish (or Swedish)

Policy Context

Tax return is the ultimate tool to carry the taxation of citizens. The Finnish taxation uses all the possible data at its source and thus causes as little bureaucratic burden on the citizen as possible.

But there are still a few items of information that only the citizen him/herself can file in: costs that entitle to personal deductions. These pinpoints are the scope of the FTA eService development. With eBank codes almost all the citizens have access to VIV, 24/7.

Description of target users and groups

All citizens (4,8 million) receive tax return. Self-employed persons, e.g. farmers, entrepreneurs etc. file first their professional income only few weeks earlier, which makes it impossible to entail their data either in the pre-filled tax return or VIV, either.

Thus the primary target group of VIV is those earning personal salary income, pension etc. Its size is about 4 million.

Description of the way to implement the initiative

VIV is the second FTA eService for citizens, platform remaining the same.

The core application is a complex system of original FTA in-house applications; data transactions from web services and data calculations in an entirely separate environment than the first eService (TCO). However, common features have been successfully found and used.

The project consisted of experts on all fields, thus uniting the best knowledge.

Special care was taken when preparing the supporting services on the phone and in the web. Service concepts were being drafted and personnel training was essential.

Technology solution

The electronic platform and the procedures taken in TCO (our first eService) were followed. New technology enabled more sophisticated and user-friendly features.

Technology choice: Standards-based technology

Main results, benefits and impacts

VIV won the confidence of over quarter of million citizens, 272 000 Finns filed electronically (of the 1,4 million sually doing and 1 million electronically able to). The final results are yet to come but it is reckoned that over 260 000 of them did not need to file anything on paper.

Annually only 29 % of the customers (1,4 million out of 4,8 million) need to make any corrections on their tax return.

In spring 2008 it was possible for the first time to make some of the corrections over the Internet. 28 % of the target group then took their chance. Thank you notes poured in. This year, we expanded VIV to the extent that already half of our annually filing customers (1,4 million) were able to do their whole filing over the Internet.

"It used to take me 20 hours to file my return. Now I had it done in 7" said the entrepreneur on first pre-filled tax returns on paper. This year the speed rate is even higher: "Never in 20 years have I completed my tax return in 10 minutes. Now I have - thanks to VIV!"

The preliminary data this year suggests even that the total amount of filers would have sunk from previous years perhaps even as much as with 100 000 – 200 000 citizens. They now had no need, whatsoever, to file: their tax return was completed, no-touch, once and for all.

Succesful  back office data gathering together with an easy-to-use eService entails huge savings. The pre-filled tax return already cut back the postal cost drastically. Instead of gathering “zero-information” FTA now only receives valid data and sends new tax decisions to those, whose tax outcome has been affected.

2009          Before pre-filled    Phase of taxation, postage 

5 million     -  5 million            Blank returns to the citizens
1,4 million  -  5 million            Fulfilled or signed as empty back to the FTA   
3 million     -  5 million            Taxation outcome to all them:   
9,4 million  - 15 million           altogether
        * 5,6 million                  saving postage, handling, filing etc.

These calculations alone would suggest an annual amount of 12 million euros, saved alone from postage fees, data handling salaries.

Return on investment

Return on investment: €5,000,000-10,000,000

Track record of sharing

Process charts are applicable to all taxation, whether processed with general applications or in-house applications. The processes need to be smoothed out. This is best done with careful data usage flow charts and cooperation between private and public sector parties in the society.

Lessons learnt

1) One can never over-emphasize the meaning of user-experience: customer is the king.

2) The earlier on you take the user-testing, the less cost and change management you cause in the project.

3) Think big, start small and act fast.

Scope: National