Digital blue skies or a perfect storm for the taxman - our take on the impact of digital technologies on tax and welfare fraud - capgemini consulting - digital transformation
Digital blue skies or a perfect storm for the taxman - our take on the impact of digital technologies on tax and welfare fraud - capgemini consulting - digital transformation
Regulatory policy and taxpayer's moralityM S Siddiqui
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The moral or personal compliance or fear of punishment may succeed in reduction of tax evasion only when tax department gain confidence of tax payers of strict compliance of law and rule by themselves in determination and collection of tax on the basis of law and rules.
http://dailyasianage.com/âŠ/regulatory-policy-and-taxpayers-âŠ
Image may contain: 1 person, text
This Tax Guide edition covers various topics and articles such as urgency of Automatic Exchange of Information (AEol) implementation in 2018; divestment in business and policy; also analysis of government plan to impose progressive tax on idle land.
The rapid rise of online political campaigning has made most political financing regulations obsolete, putting transparency and accountability at risk. Seven in 10 countries worldwide do not have any specific limits on online spending on election campaigns, with six out of 10 not having any restrictions on online political advertising at all.
IRS Impersonators Scam Taxpayers and U.S. Government Joe Garza
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Scam artists have so far stolen $15.5 million by impersonating IRS agents using previous tax returns and social security numbers. Congress and the Obama administration are seeking a solution, which may lead to increased monitoring of tax refunds.
Regulatory policy and taxpayer's moralityM S Siddiqui
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The moral or personal compliance or fear of punishment may succeed in reduction of tax evasion only when tax department gain confidence of tax payers of strict compliance of law and rule by themselves in determination and collection of tax on the basis of law and rules.
http://dailyasianage.com/âŠ/regulatory-policy-and-taxpayers-âŠ
Image may contain: 1 person, text
This Tax Guide edition covers various topics and articles such as urgency of Automatic Exchange of Information (AEol) implementation in 2018; divestment in business and policy; also analysis of government plan to impose progressive tax on idle land.
The rapid rise of online political campaigning has made most political financing regulations obsolete, putting transparency and accountability at risk. Seven in 10 countries worldwide do not have any specific limits on online spending on election campaigns, with six out of 10 not having any restrictions on online political advertising at all.
IRS Impersonators Scam Taxpayers and U.S. Government Joe Garza
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Scam artists have so far stolen $15.5 million by impersonating IRS agents using previous tax returns and social security numbers. Congress and the Obama administration are seeking a solution, which may lead to increased monitoring of tax refunds.
This Assessment of the Consumer Impact Regarding the Marketplace Fairness Act provides a unique look at how the proposed legislation could impact households across the nation.
USA: President Obama Signs Legislation Making Internet Tax Freedom Act PermanentAlex Baulf
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On February 24, 2016, President Barack Obama signed the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) which makes permanent the moratorium on Internet
access taxes and multiple or discriminatory taxes on electronic commerce established by the Internet Tax Freedom Act. Additionally, under the TFTEA, the ability of grandfathered states to tax Internet access will be completely phased out by June 30, 2020.
Topics Include:
How income tax refund fraud works
How to prevent income tax fraud from happening to you
What governmental income tax agencies are doing to try to stop income tax refund fraud
Other income tax-related frauds to be aware of this time of year
The Netherlands_Bill_Betting and Gaming Act_Explanatory memorandum_English tr...Market Engel SAS
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See bill on http://www.internetconsultatie.nl/kansspelen_op_afstand
This bill amends the Betting and Gaming Act.It is the second phase in the modernisation process of the games of chance policy, which aims to prevent gambling addiction, protect the consumer and discourage illegality and crime.
Remote games of chance are games of chance in which the player takes part with electronic means of communication and without physical contact with (the personnel of the) the organiser of the games of chance or a third party which provides a room and resources for the participation in the games of chance.
Because of the lack of direct contact between the player and the games of chance provider, these games involve different and bigger risks of fraud and gambling addiction than the traditional physical (âland basedâ) games of chance.
Proper and strict regulation of remote games of chance involves among other things that additional measures are set to prevent gambling addiction, including a central register for the exclusion of games of chance3, as well as additional supervision and enforcement powers for the Games of Chance Authority and amendment of the games of chance legislation.
This Assessment of the Consumer Impact Regarding the Marketplace Fairness Act provides a unique look at how the proposed legislation could impact households across the nation.
USA: President Obama Signs Legislation Making Internet Tax Freedom Act PermanentAlex Baulf
Â
On February 24, 2016, President Barack Obama signed the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) which makes permanent the moratorium on Internet
access taxes and multiple or discriminatory taxes on electronic commerce established by the Internet Tax Freedom Act. Additionally, under the TFTEA, the ability of grandfathered states to tax Internet access will be completely phased out by June 30, 2020.
Topics Include:
How income tax refund fraud works
How to prevent income tax fraud from happening to you
What governmental income tax agencies are doing to try to stop income tax refund fraud
Other income tax-related frauds to be aware of this time of year
The Netherlands_Bill_Betting and Gaming Act_Explanatory memorandum_English tr...Market Engel SAS
Â
See bill on http://www.internetconsultatie.nl/kansspelen_op_afstand
This bill amends the Betting and Gaming Act.It is the second phase in the modernisation process of the games of chance policy, which aims to prevent gambling addiction, protect the consumer and discourage illegality and crime.
Remote games of chance are games of chance in which the player takes part with electronic means of communication and without physical contact with (the personnel of the) the organiser of the games of chance or a third party which provides a room and resources for the participation in the games of chance.
Because of the lack of direct contact between the player and the games of chance provider, these games involve different and bigger risks of fraud and gambling addiction than the traditional physical (âland basedâ) games of chance.
Proper and strict regulation of remote games of chance involves among other things that additional measures are set to prevent gambling addiction, including a central register for the exclusion of games of chance3, as well as additional supervision and enforcement powers for the Games of Chance Authority and amendment of the games of chance legislation.
Sogeti on big data creating clarity - Report 1-4 on Big Data - Sogeti ViNTRick Bouter
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Since 2005, when the term âBig Dataâ was launched, Big Data has become an increasingly topical theme. In terms of technological development and business adoption, the domain of Big Data has made powerful advances; and that is putting it mildly.
In this initial report on Big Data, the first of four, we give answers to questions concerning what exactly Big Data is, where it differs from existing data classification, how the transformative potential of Big Data can be estimated, and what the current situation (2012) is with regard to adoption and planning.
VINT attempts to create clarity in these developments by presenting experiences and visions in perspective: objectively and laced with examples. But not all answers, not by a long way, are readily available. Indeed, more questions will arise â about the roadmap, for example, that you wish to use for Big Data. Or about governance. Or about the way you may have to revamp your organization. About the privacy issues that Big Data raises, such as those involving social analytics. And about the structures that new algorithms and systems will probably bring us.
http://www.ict-books.com/books/inspiration-trends
Digital transformation a road-map for billion-dollar organizations - capgem...
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Similar to Digital blue skies or a perfect storm for the taxman - our take on the impact of digital technologies on tax and welfare fraud - capgemini consulting - digital transformation
Digital â Blue Skies or a Perfect Storm for the Taxman?Capgemini
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The Impact of Digital Technologies on Tax and Welfare
The numbers surrounding tax fraud have always been significant. For instance, in the US, tax evasion resulted in revenue loss of over $300 billion during 2010.
In the UK, the tax gap amounted to ÂŁ35 billion in between 2012 and 2013. The EU is estimated to have lost over âŹ193
billion in Value-Added Tax (VAT) revenues due to non-compliance or non-collection.
Such large numbers have traditionally kept Government tax and welfare authorities on their toes in the course of
time. Authorities have been engaged in a constant battle with fraudsters.
This research paper examines the advent of digital technologies and how it is helping tax authorities to have a slow, but steady, impact on traditional fraud.
While innovative new technologies have been very efficient in combating traditional fraud, our research has found that digital technologies are also giving rise to new types of digital tax fraud: the increase in the number of e-filings of tax returns across geographies is driving new types of fraud using identity theft as the basis.
Another type of fraud taking shape is Zapping â using software programs to automatically skim cash from electronic cash registers (ECR) or point of sale systems.
Similarly, the growing usage of third-party payroll processors is opening up a whole new avenue of fraud where unscrupulous processors siphon off taxes due to the state.
Our analysis of these new digital tax frauds shows that inaction is not an option for tax authorities. We have modelled the evolution of tax fraud, taking into account new incidents of fraud enabled by digital technologies. Our findings are sobering for tax authorities. In a scenario where tax authorities continue to fight new tax fraud with conventional tools, we estimate digital tax fraud in the US will rise from $32 billion to $49 billion by 2020.
To combat this staggering scale of fraud, conventional methods are too slow for the digital age. Tax authorities must move away from an incremental, piecemeal approach to a much more comprehensive transformative line of attack with a long-term vision, roadmap and multifaceted solutions involving people, processes and technology.
What is the impact of inaction of tax authorities to rein in new types of digital tax fraud? How can analytics be used as an effective weapon to fight against digital tax fraud.
As governments struggle to reduce their budget deficits, preventing tax fraud and evasion has the potential to put billions back into the public purse.
The pressure on budgets has set the agenda for
the 2013 G8 summit.
The first of Future Agendaâs âWorld in 2030â foresights addresses the emerging shift in how multinational digital companies may be taxed in the future so that they make a more balanced contribution to society. In a world increasingly aware of the asymmetric power and influence of organisations that donât comply to norms and regulations created in the 19th and 20th centuries, it explores three different avenues that could have global impact: the adoption of digital revenue taxes such as those being introduced in Europe; a more sophisticated âwealthâ tax on the value of the data an organisation owns, manages, stores or uses; and the idea of a data dividend where all citizens receive a payment for the use of their data as part of a companyâs social licence to operate.
Each are being proposed and gaining support with multiple governments globally - and so should be on the radar of any data-rich organisation.
Drawn from multiple expert discussions around the world, this foresight is one of 50 looking at the key issues for the next decade that are being shared throughout 2020.
For more details see https://www.futureagenda.org/the-world-in-2030/
A FRAMEWORK FOR DETECTING FRAUDULENT ACTIVITIES IN EDO STATE TAX COLLECTION S...ijaia
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Edo State Inland Revenue Services is overwhelmed with gigabyte of disk capacity containing data about tax
payersâ in the state. The data stored on the database increases in size at an alarming rate. This has resulted
in a data rich but information poor situation where there is a widening gap between the explosive growth
of data and its types, and the ability to analyze and interpret it effectively; hence the need for a new
generation of automated and intelligent tools and techniques known as investigative data mining, to look
for patterns in data. These patterns can lead to new insights, competitive advantages for business, and
tangible benefits for the State Revenue services. This research work focuses on designing effective fraud
detection and deterring architecture using investigative data mining technique. The proposed system
architecture is designed to reason using Artificial Neural Network and Machine learning algorithm in
order to detect and deter fraudulent activities. We recommend that the architectural framework be
developed using Object Oriented Programming and Agent Oriented Programming Languages.
Tax management within multinational enterprises (MNEs) has never been more challenging. 'Getting to grips with the BEPS Action Plan' is the latest Grant Thornton report exploring the OECDâs planned overhaul of the international tax system, what it means for businesses and how they can prepare.
Digitalisation of your interaction with HMRCMartin Jack
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Simon will discuss some ideas around digitisation and its increasing relevance in business.
Making Tax Digital (MTD) â is this HMRC turning into Big Brother?
Social Media â not just a potential HR issue at work
The future of reporting to HMRC and how they will monitor it
Access Cards and Identity Management - is it worthwhile?Robert Bromwich
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Presentation based on a paper Government Access Cards: A key to fraud and identity theft reduction? developed for the 25th International Convention of the Records Management Association of Australasia (RMAA) held at Sydney during September 2008.
Tax Gap Analysis and Digital Transformation Advisory for Tax AdministrationsDigitalTaxTechnologi
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Tax Gap Analysis and Digital Transformation Advisory for Tax Administrations
Tax gap reduction
Increased tax revenue collection Decreased costs of tax administration
info@taxtech.digital https://taxtech.digital
Digital Tax Technologies (DTT) is an international expert in tax gap minimization, a trusted digital transformation advisor & solution provider for national tax administrations.
We help tax administrations around the world to reduce the tax gap, improve tax revenue collection and reduce the share of the shadow economy.
Our mission is to increase global fiscal transparency, improve tax compliance and administration, and ensure fair competition and welfare.
Our team consists of experts with experience in digital tax administration advisory and implementation in various European, CIS, Middle East, and African countries.
Tax Gap Minimization Strategy
To realize when and where the state loses potential taxes government should:
Apply the concept of the tax gap
Evaluate tax gaps for the main taxes
Develop a tax gap minimization strategy
Digital Tax Administration Concept
To minimize the tax gap revenue, tax authorities should:
Develop a concept of digital tax administration using objective data about taxpayers and the tax base
Build the digital infrastructure for data collection and interaction with taxpayers
Digital Transformation Roadmap and Implementation Plan
The digital tax administration concept should include a roadmap and implementation plan
With key initiatives aimed at minimizing the tax gap and increasing the collection of tax and excise revenues
Experience and Contacts
We are a global team of tax and digital experts working with tax administrations, global tax consultants, and top technology providers on the most important aspects of the digital transformation of national tax systems.
Our key areas of expertise are:
Digital transformation of tax administrations and transition to the real-time economy for the tax gap reduction
Implementation of digital track & trace solutions Implementation of online cash registers
Effective taxation of platform sellers and self-employed taxpayers in sharing and gig economies with eVAT / eInvoicing solutions
Advanced analytics/Big Data/AI for value-added tax administration Tailor-made and off-the-shelf software product development
End-to-end IT solutions design, implementation & support in cooperation with top software & hardware vendors and tax consultants
Contact Us for More Details
info@taxtech.digital https://taxtech.digital
Tax Management: Navigating a Perfect Storm of Tax ComplexityBroadridge
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Similar to Digital blue skies or a perfect storm for the taxman - our take on the impact of digital technologies on tax and welfare fraud - capgemini consulting - digital transformation (20)
Erdinç Saçan schreef voor het Fontys collega een boek over Inclusieve Artificial Intelligence. Vragen waar in het boek over wordt nagedacht zijn onderandere: âKunnen we algoritmen inzetten voor het algemene belang, om zo discriminatie en ongelijkheid te bestrijden?â & âAlgoritmes nemen steeds meer beslissingen voor ons. Hoe zorgen we ervoor dat dit op een inclusieve manier gebeurt?â
Themabrochure robotisering gerformeerde bond - prof.dr. m.j. de vriesRick Bouter
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In de nieuwste themabrochure van de Gereformeerde Bond, getiteld Robotisering, gaat prof. dr. M.J. de Vries in op de voordelen maar ook de gevaren van het inzetten van robots. Voor welke morele keuzes komen we te staan? Moeten robots bijvoorbeeld ook in de zorg worden gebruikt, om zo de werkdruk van het zorgpersoneel te verlichten? In de Bijbel komen robots uiteraard niet voor, maar kunnen we in Gods Woord handvatten vinden om met deze technologie goed om te gaan?
Where in prior times technique was referring to: âa method of accomplishing a desired aimâ,
today we speak more of technology. Technology has long been presented as a set of
techniques; today it has become more than a method to accomplish a desired aim. From now
on, we live in âthe age of makersâ. In times when there are more people with mobile phone
access than toothbrushes, everyone has the ability to start up a million euro business from
behind the kitchen table.
Technology does not only affect business any longer; it also affects culture, politics, society
and every element we value in life. Maybe most important of all, it affects the human race as
we know it today. For the reason technology will impact the way we have lived for ages, it is
legitimate to ask whether there is an intersection where humans and objects will find a
mutually beneficial coexistence, or whether one of these entities will rule over the other, or
whether there will be an alliance between the human race and some sort of technology that
represents a global connected world brain.
Will technology be, like in prior times, a collection of methods to accomplishing a desired
aim, or will the human race be enslaved by technology and ruled by the artificial intelligence
embedded in it?
Trend 1: CITIZEN AI
Raising AI to Benefit Business and Society
Trend 2 EXTENDED REALITY
The End of Distance
Trend 3 DATA VERACITY
The Importance of Trust
Trend 4 FRICTIONLESS BUSINESS
Built to Partner at Scale
Trend 5 INTERNET OF THINKING
Creating Intelligent Distributed Systems
Ai - Artificial Intelligence predictions-2018-report - PWCRick Bouter
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Hereâs some actionable advice on artificial intelligence (AI), that you can
use today: If someone says they know exactly what AI will look like and
do in 10 years, smile politely, then change the subject or walk away.
Internet of things rapport sogeti - vi nt - rick bouterRick Bouter
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Internet of Things for business: from sick(care) to health(care) final thesis Rick Bouter Sogeti VInT (Vision inspiration new technology) verkenning instituut nieuwe technologie
Telegram open network ton will be a third generationRick Bouter
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Telegram Open Network (TON) will be a âthird generationâ blockchain with more efficient transaction and scaling capabilities than current solutions like Bitcoin and Ethereum.
Builder.ai Founder Sachin Dev Duggal's Strategic Approach to Create an Innova...Ramesh Iyer
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In today's fast-changing business world, Companies that adapt and embrace new ideas often need help to keep up with the competition. However, fostering a culture of innovation takes much work. It takes vision, leadership and willingness to take risks in the right proportion. Sachin Dev Duggal, co-founder of Builder.ai, has perfected the art of this balance, creating a company culture where creativity and growth are nurtured at each stage.
Accelerate your Kubernetes clusters with Varnish CachingThijs Feryn
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A presentation about the usage and availability of Varnish on Kubernetes. This talk explores the capabilities of Varnish caching and shows how to use the Varnish Helm chart to deploy it to Kubernetes.
This presentation was delivered at K8SUG Singapore. See https://feryn.eu/presentations/accelerate-your-kubernetes-clusters-with-varnish-caching-k8sug-singapore-28-2024 for more details.
Essentials of Automations: Optimizing FME Workflows with ParametersSafe Software
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Are you looking to streamline your workflows and boost your projectsâ efficiency? Do you find yourself searching for ways to add flexibility and control over your FME workflows? If so, youâre in the right place.
Join us for an insightful dive into the world of FME parameters, a critical element in optimizing workflow efficiency. This webinar marks the beginning of our three-part âEssentials of Automationâ series. This first webinar is designed to equip you with the knowledge and skills to utilize parameters effectively: enhancing the flexibility, maintainability, and user control of your FME projects.
Hereâs what youâll gain:
- Essentials of FME Parameters: Understand the pivotal role of parameters, including Reader/Writer, Transformer, User, and FME Flow categories. Discover how they are the key to unlocking automation and optimization within your workflows.
- Practical Applications in FME Form: Delve into key user parameter types including choice, connections, and file URLs. Allow users to control how a workflow runs, making your workflows more reusable. Learn to import values and deliver the best user experience for your workflows while enhancing accuracy.
- Optimization Strategies in FME Flow: Explore the creation and strategic deployment of parameters in FME Flow, including the use of deployment and geometry parameters, to maximize workflow efficiency.
- Pro Tips for Success: Gain insights on parameterizing connections and leveraging new features like Conditional Visibility for clarity and simplicity.
Weâll wrap up with a glimpse into future webinars, followed by a Q&A session to address your specific questions surrounding this topic.
Donât miss this opportunity to elevate your FME expertise and drive your projects to new heights of efficiency.
Smart TV Buyer Insights Survey 2024 by 91mobiles.pdf91mobiles
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91mobiles recently conducted a Smart TV Buyer Insights Survey in which we asked over 3,000 respondents about the TV they own, aspects they look at on a new TV, and their TV buying preferences.
Epistemic Interaction - tuning interfaces to provide information for AI supportAlan Dix
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Paper presented at SYNERGY workshop at AVI 2024, Genoa, Italy. 3rd June 2024
https://alandix.com/academic/papers/synergy2024-epistemic/
As machine learning integrates deeper into human-computer interactions, the concept of epistemic interaction emerges, aiming to refine these interactions to enhance system adaptability. This approach encourages minor, intentional adjustments in user behaviour to enrich the data available for system learning. This paper introduces epistemic interaction within the context of human-system communication, illustrating how deliberate interaction design can improve system understanding and adaptation. Through concrete examples, we demonstrate the potential of epistemic interaction to significantly advance human-computer interaction by leveraging intuitive human communication strategies to inform system design and functionality, offering a novel pathway for enriching user-system engagements.
Securing your Kubernetes cluster_ a step-by-step guide to success !KatiaHIMEUR1
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Today, after several years of existence, an extremely active community and an ultra-dynamic ecosystem, Kubernetes has established itself as the de facto standard in container orchestration. Thanks to a wide range of managed services, it has never been so easy to set up a ready-to-use Kubernetes cluster.
However, this ease of use means that the subject of security in Kubernetes is often left for later, or even neglected. This exposes companies to significant risks.
In this talk, I'll show you step-by-step how to secure your Kubernetes cluster for greater peace of mind and reliability.
JMeter webinar - integration with InfluxDB and GrafanaRTTS
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Watch this recorded webinar about real-time monitoring of application performance. See how to integrate Apache JMeter, the open-source leader in performance testing, with InfluxDB, the open-source time-series database, and Grafana, the open-source analytics and visualization application.
In this webinar, we will review the benefits of leveraging InfluxDB and Grafana when executing load tests and demonstrate how these tools are used to visualize performance metrics.
Length: 30 minutes
Session Overviewâ
-------------------------------------------
During this webinar, we will cover the following topics while demonstrating the integrations of JMeter, InfluxDB and Grafana:
- What out-of-the-box solutions are available for real-time monitoring JMeter tests?
- What are the benefits of integrating InfluxDB and Grafana into the load testing stack?
- Which features are provided by Grafana?
- Demonstration of InfluxDB and Grafana using a practice web application
To view the webinar recording, go to:
https://www.rttsweb.com/jmeter-integration-webinar
UiPath Test Automation using UiPath Test Suite series, part 3DianaGray10
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Welcome to UiPath Test Automation using UiPath Test Suite series part 3. In this session, we will cover desktop automation along with UI automation.
Topics covered:
UI automation Introduction,
UI automation Sample
Desktop automation flow
Pradeep Chinnala, Senior Consultant Automation Developer @WonderBotz and UiPath MVP
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
State of ICS and IoT Cyber Threat Landscape Report 2024 previewPrayukth K V
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The IoT and OT threat landscape report has been prepared by the Threat Research Team at Sectrio using data from Sectrio, cyber threat intelligence farming facilities spread across over 85 cities around the world. In addition, Sectrio also runs AI-based advanced threat and payload engagement facilities that serve as sinks to attract and engage sophisticated threat actors, and newer malware including new variants and latent threats that are at an earlier stage of development.
The latest edition of the OT/ICS and IoT security Threat Landscape Report 2024 also covers:
State of global ICS asset and network exposure
Sectoral targets and attacks as well as the cost of ransom
Global APT activity, AI usage, actor and tactic profiles, and implications
Rise in volumes of AI-powered cyberattacks
Major cyber events in 2024
Malware and malicious payload trends
Cyberattack types and targets
Vulnerability exploit attempts on CVEs
Attacks on counties â USA
Expansion of bot farms â how, where, and why
In-depth analysis of the cyber threat landscape across North America, South America, Europe, APAC, and the Middle East
Why are attacks on smart factories rising?
Cyber risk predictions
Axis of attacks â Europe
Systemic attacks in the Middle East
Download the full report from here:
https://sectrio.com/resources/ot-threat-landscape-reports/sectrio-releases-ot-ics-and-iot-security-threat-landscape-report-2024/
UiPath Test Automation using UiPath Test Suite series, part 4DianaGray10
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Welcome to UiPath Test Automation using UiPath Test Suite series part 4. In this session, we will cover Test Manager overview along with SAP heatmap.
The UiPath Test Manager overview with SAP heatmap webinar offers a concise yet comprehensive exploration of the role of a Test Manager within SAP environments, coupled with the utilization of heatmaps for effective testing strategies.
Participants will gain insights into the responsibilities, challenges, and best practices associated with test management in SAP projects. Additionally, the webinar delves into the significance of heatmaps as a visual aid for identifying testing priorities, areas of risk, and resource allocation within SAP landscapes. Through this session, attendees can expect to enhance their understanding of test management principles while learning practical approaches to optimize testing processes in SAP environments using heatmap visualization techniques
What will you get from this session?
1. Insights into SAP testing best practices
2. Heatmap utilization for testing
3. Optimization of testing processes
4. Demo
Topics covered:
Execution from the test manager
Orchestrator execution result
Defect reporting
SAP heatmap example with demo
Speaker:
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
LF Energy Webinar: Electrical Grid Modelling and Simulation Through PowSyBl -...DanBrown980551
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Do you want to learn how to model and simulate an electrical network from scratch in under an hour?
Then welcome to this PowSyBl workshop, hosted by Rte, the French Transmission System Operator (TSO)!
During the webinar, you will discover the PowSyBl ecosystem as well as handle and study an electrical network through an interactive Python notebook.
PowSyBl is an open source project hosted by LF Energy, which offers a comprehensive set of features for electrical grid modelling and simulation. Among other advanced features, PowSyBl provides:
- A fully editable and extendable library for grid component modelling;
- Visualization tools to display your network;
- Grid simulation tools, such as power flows, security analyses (with or without remedial actions) and sensitivity analyses;
The framework is mostly written in Java, with a Python binding so that Python developers can access PowSyBl functionalities as well.
What you will learn during the webinar:
- For beginners: discover PowSyBl's functionalities through a quick general presentation and the notebook, without needing any expert coding skills;
- For advanced developers: master the skills to efficiently apply PowSyBl functionalities to your real-world scenarios.
Leading Change strategies and insights for effective change management pdf 1.pdf
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Digital blue skies or a perfect storm for the taxman - our take on the impact of digital technologies on tax and welfare fraud - capgemini consulting - digital transformation
1. Digital â Blue Skies or a Perfect Storm
for the Taxman?
Our Take on the Impact of Digital
Technologies on Tax and Welfare Fraud
2. Digital Technologies are Chipping Away at
Traditional Tax and Welfare Fraud...
Fraud is Big Business
The numbers surrounding tax fraud have
always been significant. For instance, in
the US, tax evasion resulted in revenue
loss of over $300 billion during 20101.
In the UK, the tax gap amounted to ÂŁ35
billion in between 2012 and 20132. The
EU is estimated to have lost over âŹ193
billion in Value-Added Tax (VAT) revenues
due to non-compliance or non-collection3.
Such large numbers have traditionally
kept Government tax and welfare
authorities on their toes in the course of
time. Authorities have been engaged in a
constant battle with fraudsters.
In the US, tax evasion
resulted in revenue loss of
over $300 billion during
2010.
2
Closing in on Tax Evasion through Data Analytics in the
UK â HMRCâs Approach
In the UK, the tax gap amounted to ÂŁ35 billion in 2012. The UK government
has invested close to ÂŁ1 billion so far to tackle tax avoidance, evasion and
fraud. In order to achieve this, HMRC used a multipronged approach of taking
advantage of technology and analytical techniques. It launched new advertising
campaigns, increased the size of its teams dedicated to the fraud and error
group, and partnered with private sector experts to overcome tax fraud. HMRC
is also incorporating and sharing new data from other countries, from the private
sector and from across various government bodies, which allows for more
transparency and helps spot the connections between tax evadersâ income,
wealth and assets.
On the technology front, HMRC has introduced a data warehousing and
analytics system called âConnectâ, at a cost of ÂŁ45 million. Connect allows
HMRC to collate, sift and apply analytics on various data points such as
property purchases, tax returns, loans, bank accounts and employment data to
identify assets, spot and track suspicious financial transactions and highlight the
connections that identify those trying to hide their income and wealth in order
to evade tax. HMRCâs technology-driven initiative to close-in on tax evasion and
fraud delivered almost ÂŁ2 billion in additional revenues during 2011-12 and is
estimated to deliver ÂŁ22 billion a year in extra tax revenues by 2014-15. It also
resulted in over 400 criminal convictions during 2011-12.
Source: Financial Times, âTen ways HMRC checks if you are cheatingâ, November 2012; HMRC,
âClosing in on Tax Evasion-HMRCâs Approachâ, December 2012
Digital Technologies are
Helping Tax Authorities
Gain New Insights
The advent of digital technologies is
helping tax authorities have a slow,
but steady, impact on traditional fraud.
Data analytics techniques help classify
patterns and identify outliers that could
indicate fraud (see insert on Her Majestyâs
Revenue and Customs in the UK).
Analytics techniques are used to analyze
extensive data such as income, tax paid
and asset ownership to spot fraudsters.
For instance, in Italy, tax authorities are
using a tool called âRedditometroâ or
income meter to identify people living
above their stated means. The tool
looks at over 100 items of spending
across several categories, including
luxury goods, gymnasium memberships
Tax authorities are
analyzing extensive
data to spot fraudsters.
and pay-TV subscriptions to identify
if the expenditures are proportionate
to the individualâs income. If there are
discrepancies, the authorities start
investigating the identified case4.
Further, âsocial network analysisâ or
âlink analysisâ helps build mathematical
models to relate different entities and
score their statistical significance for
fraud. It is clubbed with other analytics
techniques such as predictive modeling
and anomaly detection to detect collusive
behavior for fraud. For instance, the
Los Angeles County implemented
an analytics solution, including social
network analysis, to combat fraud related
to childcare services (see insert).
3. 3
13.2% 12.9%
9.2%
8.0%
10.7%
6.7%
9.0%
5.8%
4.8%
5.1%
5.8%
4.9% 5.4%
4.4%
3.9%
4.6%
1997-98 1999-00 2001-02 2003-04 2005-06 2007-08 2009-10 2011-12
% of 'Income Support' overpaid from fraud and error (working age)
% of 'Jobseeker's Allowance' overpaid from fraud and error
Data Mining and Social Network Analytics for Fraud
Detection â Los Angeles Countyâs Best Practice
Approach
Los Angeles (LA) Countyâs welfare program, providing temporary financial
assistance to families with minor children and income below state limits, was
facing increasing fraud from participants and child care providers.
In order to detect and prevent fraud, LA County used a data mining service,
the first fraud detection system implemented by a local government in the US.
This was integrated with predictive models, social network analysis software
and business intelligence tools to detect and prevent fraud in public assistance
programs. Fraud risk scores were developed to decrease the number of false
positive cases assigned to investigators.
Ten months since its launch, the system has produced 197 additional referrals
for child care fraud investigations and also detected two conspiring groups
consisting of 16 cases. Benefits from the project were calculated across three
areas, totalling $6.8 million: new fraud referrals of $2.2 million; early fraud
detection of $1.6 million; and increasing program integrity and efficiency of $3
million. The accuracy rate of fraud rings identified by the social network analysis
solution was calculated with a reliability of 85 percent.
Source: Los Angeles County, âData Mining Solution for Child Care Welfare Fraud â Quality and
Productivity Commissionâ, 2012
Digital Technologies are
Contributing to a Decline in
Traditional Fraud
The increasing usage of digital
technologies is helping authorities have
a direct impact on losses from fraud and
error. There is also growing collaboration
and tax information sharing through digital
platforms between public authorities
globally in order to hone in on cross-border
tax evaders.
As a result of these initiatives, overall
tax and welfare fraud has reduced in
many countries. For instance, VAT gap,
a difference between the theoretical total
VAT liability (estimated using National
Accounts data) and actual cash receipts,
in the UK fell from 15.7% in 2002 to
9.5% in 20125. Moreover, the percentage
of fraudulent income support over-payments
decreased from 9.2% during
1997-98 to 4.4% during 2011-12, while
fraudulent jobseeker allowance payments
reduced from 13.2% to 4.6% during the
same period (see Figure 1).
Figure 1: Percentage of Income Support and Jobseekerâs Allowance
Overpaid in the UK Due to Fraud and Error
Source: DWP, âFraud and Error in Income Support and Jobseekerâs Allowanceâ, March 2002, May 2013
The UK tax authoritiesâ
Big Data solution to
combat fraud delivered
ÂŁ2bn in additional
revenues during
2011-2012.
4. Similarly, HMRC in the UK realized
significant achievements in combating tax
fraud. Through its compliance operations,
during 2003-04 HMRC intervened in
over 1,800 incorrect claims where a
false or fraudulent tax credits claim was
suspected. In the following years, this
Figure 2: Federal Revenue Lost to Tax Evasion in the US ($ billion, 1985-2010)
Launch of comprehensive
strategy by IRS to combat tax gap
Source: US GAO, âAnalyzing the Nature of the Income Tax Gapâ, January 1997; Demos.org, âTax evasionâ, 2011
4
number increased to 17,000 (2004-05)
and 100,000 (2005-06)6. This active
approach led to a reduction in overall
fraud and error in tax credit entitlement
from 9.7% in 2004 to 7.8% in 2007 and
this further decreased to 7.3% in 20127.
In the same context, during 2006 the
US Treasury Department came out with
a comprehensive strategy for addressing
the tax gap. This included measures
such as implementing the âModernized
electronic Filingâ (MeF) platform for
real-time processing of tax returns
and an automated system to identify
discrepancies in returns8. Consequently,
tax evasion is estimated to have declined
by nearly 20% during 2007-2010 (see
Figure 2).
Digital technologies have brought in good
news to tax and welfare authorities. At
the same time they have also enabled
the rise of a new set of fraud types.
Tax evasion in the US
is estimated to have
declined by nearly 20%
during 2007-2010.
Digital technologies have
brought about good news.
At the same time they
have also enabled the rise
of a new set of frauds.
85.9
128.4
290
350
376
357
304 305
1985 1992 2001 2006 2007 2008 2009 2010
Federal revenue lost to tax evasion ($ billion)
CAGR
6.9%
CAGR
-6.7%
5. 5
Increasing focus on
electronic tax filing
creates an opportunity
for tax fraud.
âŠHowever, Digital is also
Sowing the Seeds for New Frauds
Digital Creates New
Opportunities to Defraud
Authorities
Digital technologies are also enabling
new types of fraud. The growing
prevalence of digital data, sophisticated
spyware, phishing software and online
scams allow criminals to industrialize
fraud, making it harder to detect.
For instance, the growth in digital
transactions such as e-banking,
e-commerce and online public service
payments presents an opportunity for
cybercriminals to exploit data trails
and digitally stored user information.
Similarly, increasing focus on electronic
tax filing and associated refund claims
also creates an opportunity for tax fraud.
The proportion of personal income tax
returns filed online (out of total personal
income tax returns) in the US increased
from 41% to 81% during 2006-12,
while it grew from 23% to 83% for the
same period in the UK (see Figure 3).
Moreover, public sector online databases
are also susceptible to intrusion by
cybercriminals.
The advent of the Internet also allows for
easy creation of shell companies â firms
which exist on paper only, with no real
employees or offices, possibly in tax
havens. These then become the favored
vehicle for tax evaders and money
launderers as they are easy to set up.
These companies can be set up online,
sometimes in less than 10 minutes with
just an Internet connection and credit
card.
These are just two new opportunity
areas for digital fraud. However, for
tax authorities, the bigger challenge
is that consequently, there are several
new types of frauds that, have come
up, aided by a proliferation of public
data and the ease of transmitting and
intercepting digital information.
Figure 3: Growth in E-Filing of Tax Returns in the US and the UK
41%
Source: IRS Data Book, 2006-2012; HMRCâs online filing figures for self assessment, 2006-12.
58%
69.6%
81%
23%
43%
74%
83%
2006
2008
2010
2012
% of total tax returns filed online in the US % of total tax returns filed online in the UK (self assessment)
6. Digitization Fuels Growth of
New Types of Frauds
New tax and benefit fraud types include
fraud related to identity theft, zapping,
online payroll processing, VAT carousel
and digital currencies.
6
Identity Theft is on the Rise with US Internal Revenue
Servicesâ (IRS) Move to E-Filing Tax Returns
0.31%
1.52%
5x
2007 2012
% of identity theft incidents in total personal income tax returns e-filed
Identity theft is the number one tax scam for 2013, and has been increasing in
relation to the IRSâ growing dependence on electronic tax-filing and the direct-depositing
of refunds. E-filing of personal income tax returns in the US grew at a
CAGR of 8.5% over 2007 and 2012 period.
The US Tax Administration reported that the IRS failed to identify 1.5 million
fraudulent returns related to tax year 2010.
Source: US Senate Committee on Finance, âTax Fraud and Tax ID Theft: Moving Forward with Solutionsâ,
April 2013; The Wall Street Journal, âE-Filing and the Explosion in Tax-Return Fraudâ, January 2013
In 2012, tax loss due
to identity theft was
estimated at $11 billion in
the US.
Zapping helps fraudsters
under-report earnings
and evade tax by
automatically skimming
cash from electronic cash
registers.
A third of Canadaâs
restaurants may be
evading taxes by using
zapper programs.
Growing Incidence of Identity Theft
is Driving Tax Refund Fraud
Access to extensive personal data
through electronic means has led to a
rapid rise in tax fraud through identity
theft. Fraudsters, masquerading as
authorities, send out emails that request
social security numbers or other
personal information in order to process
tax refunds. Once the user provides this
information, it is used to file and claim
fraudulent tax returns or even modify
bank routing details for tax refunds.
Personal information stored with
government agencies and banks can
also be targeted by hackers to commit
identity theft tax fraud (see insert). In
2012, tax loss due to identity theft was
estimated at $11 billion in the US and
$1.8 billion in the EU (see Figure 4).
Under-Reporting Income through
Zapping Helps Evade Sales and
Income Tax
Zappers are programs that automatically
and remotely skim cash from electronic
cash registers (ECRs) or point of sales
(POS) systems, which are then used by
businesses to under-report earnings,
evade taxes or even launder money.
Businesses such as restaurants,
convenience stores and gas stations
that record significant cash sales with
ECRs are most susceptible to zappers.
Once installed, a zapper allows accurate
receipts to be issued, but soon after
this it eliminates a select number of
transactions. The cash associated with
these suppressed sales can be skimmed
without detection.
Numerous tax fraud zapper cases have
been reported in the US. For instance,
a dairy in Connecticut skimmed $17
million in receipts and hid the cash in a
tax-haven. A restaurant chain in Detroit,
Michigan zapped $20 million in cash
sales. According to estimates, a third of
Canadaâs restaurants may be evading
taxes by using zapper programs and
other software to hide their sales. The
Canada Revenue Agency has found an
estimated $141 million in phantom sales
that were deliberately erased in electronic
cash registers to avoid taxes9. In the US
and the EU zapping in restaurants is
estimated to have resulted in tax losses
of around $2.1 billion and $2.2 billion
respectively in 2012 (see Figure 4).
7. business. Moreover, the Department
of Homeland Security restricted the
transfer of funds in and out of Mt. Gox,
the worldâs largest Bitcoin exchange,
which is based in Japan16.
Government authorities have so far
achieved limited success in preventing
the misuse of digital currency due to lack
of regulations governing its usage. The
overall public revenue loss due to digital
currency remains unknown on account
of ambiguity in tax treatment and built in
privacy of digital currency.
In the next section, we take a look at the
actual impact the growth of such digital
fraud techniques can have on the US
and EU markets in the coming years.
7
In 2012, tax loss related to
online payroll fraud in the
EU was estimated to be
$10.7 billion.
Digital currencies offer
higher scope for money
laundering and resultant
tax evasion.
Online Payroll Processing by Third
Parties Leads to Payroll Tax Fraud
Many businesses outsource their payroll
services to third-party providers who
manage online payroll processing for
employees and payroll tax filing. However,
some of these providers commit payroll
tax fraud by withholding or diverting the
clientâs payroll tax funds. For instance, a
payroll services firm in the US paid $19
million in restitution for siphoning off a
part of their clientsâ tax payments and
under reporting it to the IRS10. Similarly,
senior-executives of another payroll
services company embezzled nearly
$1.3 million from clients and failed to pay
$400,000 in taxes. These executives
then transferred money from their
clientsâ bank accounts to the companyâs
tax accounts and subsequently onto
their own debit cards instead of sending
it to the IRS11. In 2012, tax loss due to
payroll fraud in the US and the EU was
estimated to be $5.4 billion and $10.7
billion respectively (see Figure 4).
VAT Carousel Fraud Goes Digital
VAT carousel fraud involves defrauding
the government of VAT on the trade of
goods and services. It arises when a
business makes an intra-community
(within EU) purchase without paying VAT,
collects VAT on an onward sale, and then
âdisappearsâ without remitting the tax.
While VAT carousel fraud traditionally
occurred over physical goods such
as computer chips, it has now
expanded to digital services such as
CO2 permits and VOIP services12.
Online exchanges enable clearing
spot transactions for CO2 permits as
quickly as fifteen minutes, which acts
as a key driver for fraudulent activities13.
According to the European Police Office,
up to 90 percent of the trade in CO2
permits in some countries is fraudulent.
A recent study also warns of an emerging
threat of this fraud exploiting electricity
and gas markets14. Tax loss in the EU
due to VAT carousel fraud was estimated
to be $3.5 billion in 2012 (see Figure 4).
Digital Currencies Facilitate Tax
Evasion
Digital currencies are electronically traded
currencies that are not guaranteed by
a sovereign state and do not have a
âlegal tenderâ. They act as an alternative
to nation-backed currencies and can
be exchanged for âlegalâ currencies
through exchanges. Bitcoin, the largest
operational digital currency, had a market
capitalization of more than $1 billion in
June 201315.
Digital currencies offer higher scope
for money laundering and resultant tax
evasion. In March 2013, US prosecutors
filed a case against Liberty Reserve,
alleging that it was running a $6 billion
money laundering scheme and operating
an unlicensed money transmitting
Figure 4: Digital Frauds in the US and the EU ($ billion, 2012)
US
$18.6 bn
59%
29%
12%
EU
10%
19%
$18.2 bn
12%
59%
Tax loss due to identity theft (e-filing)
Sales and income tax evasion through
zapping
Tax fraud by 3rd party online payroll
processing
VAT carousel fraud (emission allowances)
Source: IRS, US Census; National Restaurant Association (US); National Association of Convenience Stores
(US); National Small Business Association; Eurostat/OECD Statistics; Capgemini Consulting Analysis
8. Inaction on Digital Fraud Could Cost
the US and the EU Nearly $35 Billion Each
If Left Unchecked, Digital
Fraud Will Double in Value
by 2020 in the US and
the EU
To understand the impact that digital
fraud can have on tax authorities in
the future, we built a comprehensive
forecasting model. We evaluated a wide
range of parameters in order to identify
the quantum of digital fraud that can
hit the US and the EU by 2020 (see
insert on our approach on page 10).
Specifically, we looked at identity theft,
zapping, third-party payroll processing
and VAT carousel. The results from our
forecast show that if tax authorities
continue to rely on existing ways and
means of fighting digital fraud, i.e. if they
adopt an âas isâ approach, they are in for
an uphill battle. In such a scenario, we
estimate digital fraud to almost double to
over $34 billion in the US and $35 billion
in the EU by 2020 from $18.6 billion and
$18.2 billion in 2012 respectively.
8
Digital fraud in the US and the EU is
driven by different factors (see Figure
5). In the case of US, the main driver
is tax loss due to identity theft, a
consequence of growing numbers of
e-filings. ID theft fraud has been a matter
of concern for authorities in the US for
a while. Indeed, the IRS has described
identity theft as the number one tax
scam of 201317. Fraudsters typically
rely on using a combination of people
staying on temporary visas, fake names,
prepaid cellphones, disguised computer
addresses and fraudulent bank
accounts. In a recent case, authorities
in the US indicted over 55 people in a
bogus scheme that netted $7 million and
involved the theft of more than 2,000
identities18.
In the case of the EU, tax fraud by third-party
online payroll processing firms is
the biggest source of digital fraud. This
is due to a combination of factors. For
instance, the larger employment base in
the SME (Small and Medium Enterprise)
sector, higher payroll deductions and
more propensity to outsource payroll
processing in the EU (55%) as compared
to the US (40%) make payroll processing
an attractive target for fraudsters19. These
factors together make tax fraud in online
If left unchecked, digital
fraud will double in value
by 2020 in the US and the
EU.
payroll processing a key contributor to
overall digital fraud in the EU.
Among the other types of fraud, zapping
is estimated to grow extremely rapidly,
albeit from a smaller base. We forecast
tax loss due to zapping to grow by
167% in the US and 235% in the EU.
Such growth is driven by an increase
in restaurant sales and rising taxes.
Restaurant sales in the US and the EU
registered 13.3% and 11.2% growth
during 2010-12 respectively and is
further anticipated to grow steadily over
the 2013-20 period20.
Tax loss due to zapping
is estimated to grow by
167% in the US and 235%
in the EU.
VAT carousel fraud in emissions
allowances is a fraud category that
is exclusive to the EU region. We
estimate it will more than double during
2012-2020. This is on the back of an
increase in the trade volume as well as
an anticipated rise in the price of CO2
emission allowances.
Figure 5: Breakdown of Forecasted Digital Fraud under âas isâ Scenario (US and EU, 2012-2020)
59%
Source: Capgemini Consulting forecasts
US EU
58%
12%
17%
29%
25%
2012 2020
Sales and income tax evasion through zapping
19%
59% 21%
12% 17%
10%
22%
2012 2020
Tax fraud by 3rd party online payroll processing
VAT carousel fraud (emission allowances)
18.6
34.5
35.2
18.2
40%
CAGR
Tax loss due to identity theft (e-filing)
6.1%
13.1%
7.8%
CAGR
10.7%
3.5%
16.3%
15.9%
9. 9
Such Strong Growth Will
Drive a Shift in Fraud Mix
Despite a steady increase in digital
fraud, the good news for tax and
welfare authorities is that traditional
fraud continues to reduce. We expect
technological solutions such as using
analytics to identify potential fraudsters,
to help authorities fight traditional fraud
with increased success. However, at the
same time, the newer types of fraud will
grow much more rapidly than the rate
at which traditional fraud is declining.
This will result in digital fraud accounting
for a greater proportion of overall fraud
in the coming years. Our estimates
indicate that in an âas isâ scenario,
where additional interventions are not
made to tackle digital fraud, the overall
fraud mix will see significant change. In
the US, by 2020, nearly one-sixth of all
fraud will be digital in nature. Similarly, in
the EU, digital fraud will grow from 5%
to nearly 18% of the overall fraud mix
(see Figure 6).
For tax and welfare authorities, all is not
lost. Digital technologies can also help
where they hurt the most.
A Strong Vision Coupled
with Digital Interventions
Can Sharply Curtail the
Growth of Emerging Frauds
Tax and welfare authorities can
combat digital fraud by implementing
technological solutions. There are two
broad approaches that tax authorities
can take â an incremental approach and
a holistic approach.
In an âincremental approachâ tax
authorities can deploy multiple discrete
solutions to prevent new types of fraud.
This will involve launching multiple
measures to control specific fraudulent
activities in the short to medium
term. However, this approach has its
challenges. It is reactive by nature and
Figure 6: Projected Trend of Traditional and New Types of Tax Frauds
(US and EU)
US
$287 bn $224 bn $386 bn $192 bn
6% 7% 8% 8% 9% 11% 12% 14% 15%
Source: Capgemini Consulting forecasts
EU
5% 5% 6% 7% 8% 10% 12% 14%18%
95% 95% 94% 93% 92% 90% 88% 86%82%
2012 2013 2014 2015 2016 2017 2018 2019 2020
94% 93% 92% 92% 91% 89% 88% 86%85%
2012 2013 2014 2015 2016 2017 2018 2019 2020
âTraditional taxâ fraud New types of frauds (âas isâ scenario)
Adopting a holistic
approach can help
authorities decrease
digital fraud by nearly
50% in the US and 41%
in the EU.
typically lacks a structured governance
model around it. These measures, while
effective individually, lack the synergies
that a coordinated response can achieve.
For instance, the US IRS has as many
as 21 departments looking at identity
theft21. We estimate that if tax and
welfare authorities in the US and the EU
intervene through discrete, incremental
solutions during 2012-2020, the growth
of digital fraud can be curtailed from
85% to 32% in the US and from 93% to
26% in the EU.
Tax authorities who understand and
appreciate the impact that digital fraud
can have will adopt a more âholistic
approachâ. In this scenario, we believe
authorities will undertake comprehensive
technological and governance measures
in order to detect and prevent digital
fraud. Such an approach involves long-term
vision, adoption of a clear roadmap
and multipronged solutions involving
people, processes and technology
to combat digital fraud (as explained
in greater detail in the next section).
Adopting such an approach can help
authorities decrease digital fraud by
nearly 50% in the US and 41% in the EU
during 2012-2020 (see Figure 7).
10. Figure 7: Impact of Digital Solutions in Curtailing Digital Fraud (US and EU, $ billion)
Source: Capgemini Consulting forecasts
10
18.6
34.5
24.6
9.6
2012 2013 2014 2015 2016 2017 2018 2019 2020
'As is' scenario
'Incremental approach' scenario
'Holistic approach' scenario
US
18.2
35.2
22.8
10.7
EU
2012 2013 2014 2015 2016 2017 2018 2019 2020
Our Approach to Forecasting Revenue Loss due to Digital Fraud in the US and the EU
We built a forecasting model to estimate the impact of digital fraud in the US and the EU until 2020 by analyzing four fast
growing frauds â identity theft, zapping, third-party online payroll processing and VAT carousel related to emission allowances.
Revenue loss to government authorities due to tax related identity theft was estimated using identity theft incidents, tax return
e-filing statistics and employment data. Restaurant sales, percentage cash transactions, average income and applicable taxes
were considered to forecast sales tax and income tax losses due to zapping. While annual payroll data, standard deductions,
percentage of firms outsourcing payroll services and employment data were used to project third-party online payroll processing
fraud. VAT carousel fraud was determined using EU specific emissions allowances trade volumes, prices of carbon credits and
average VAT rates applicable on carbon trading.
11. 11
Tax and Welfare Authorities Need to Act Now To
Curb Growth in Digital Fraud
The strong increase in digital tax and
welfare fraud calls for multipronged
solutions from tax and welfare authorities.
As new digital technologies and
platforms continue to emerge, so will the
types of tax and welfare fraud. This calls
for innovative and comprehensive ways
to tackle emerging fraud. In this section,
we present a roadmap for implementing
solutions to counter new types of digital
tax and welfare fraud (see Figure 8).
As new digital
technologies and
platforms continue to
emerge, so will the types
of tax and welfare fraud.
Figure 8: Roadmap to Combat Digital Tax and Welfare Fraud
Define vision and
target operating
model
Tax and welfare
authorities need to assess
the efficacy of existing
anti-fraud solutions in
preventing digital fraud.
Assess the extent
of digital fraud
Determine the
robustness of existing
anti-fraud systems
Develop an integrated
solution comprising
policy, processes
and people
Adopt an Agile
Approach
Source: Capgemini Consulting
Once missing capabilities are
determined, they should be prioritized
and included in existing or new anti-fraud
systems. One way to prioritize
these capabilities is to create a heat-map
that reflects the potential amount of
tax fraud averted as a result of adding
different capabilities. The capability mix
that leads to maximum savings can then
be prioritized over others, subject to
factors such as cost and compatibility
with existing systems.
Assess the Extent of
Digital Fraud
The first step in combating new types
of digital tax and welfare fraud is to
identify them and assess their spread
and financial impact. One of the ways in
which this can be done is by running one
or several pilot projects to analyze the
incidence of fraud in a sample population.
For instance, the Canada Revenue
Agency ran a three-year pilot project
that analyzed electronic sales data at
424 establishments to understand the
extent of zapping. It discovered at least
143 cases of suspected fraud, each with
an average of $1-million in phantom
sales22. This led to a crack down on
zappers, including installation of special
recorders to document every sale
punched into cash registers.
a Identity Protection Personal Identification Numbers (IPPINs) are issued to victims of identity theft tax fraud by the IRS for additional protection
while e-filing tax returns
Determine the Robustness
of Existing Anti-Fraud
Systems
Tax and welfare authorities need to
assess the efficacy of existing anti-fraud
systems in identifying and preventing
digital tax and welfare frauds. This
can be done through regular audits,
which will help reveal loopholes and
missing capabilities. For instance, the
IRS uses a series of filters to flag and
stop potentially fraudulent returns (see
insert). However, an audit revealed that
a majority of the tax returns that were
flagged as âunpostableâ (illegitimate) by
the IRS, due to inability to clear identity
theft screening filters or missing online
identification numbers (IPPINsa), were
eventually deemed legitimate. The audit
identified accuracy of the screening
filters as the key missing capability in this
case23.
12. Define Vision and Target
Operating Model
Tax and welfare authorities need to
clearly define their vision and target
operating model for combating digital
fraud. For instance, in the US, the IRS
defined a vision of implementing a âReal
Time Tax Systemâ that would allow
matching of data on tax returns with
data in IRSâs records at the time the tax
12
return is submitted for filing24. Similarly,
tax authorities should have clarity about
the short-term and long-term benefits
expected from the solution that they
wish to deploy to counter fraud. At the
same time, tax authorities should bear
in mind that addressing growing digital
fraud is not a technological battle alone.
Technology solutions should be closely
driven in tandem with business efforts.
A successful solution for
countering digital fraud
requires an integrated
approach covering
policies, processes, people
and technology.
Key Measures taken by IRS to Combat Tax-Related Identity Theft
The IRS has taken multiple measures to combat ID theft. It uses identity theft screening filters that spot fraudulent tax returns
before refunds are issued and adjusts these filters periodically. The use of these filters enabled IRS to stop issuance of nearly
$2.2 billion in fraudulent tax refunds in 2012. The IRS also has an âexternal leadsâ program, wherein private businesses alert it of
suspicious transactions. IRS then investigates the taxpayers involved in these transactions and recoups the funds from financial
institutions. The âexternal leadsâ program has helped recover more than $293 million from 122,000 accounts in 2013.
Another initiative by IRS to combat ID theft tax fraud is the use of online tools to facilitate research in ID theft cases. It has
adopted Integrated Automated Technologies (IAT), a software suite that allows employees to conduct research, adjust accounts
and send letters to affected taxpayers. The IRS has also set up a dedicated âIdentity Theft Clearinghouseâ to accept tax fraud-related
identity theft leads from its Criminal Investigation field offices. The Clearinghouse develops each lead and supports
ongoing criminal investigations involving identity theft.
It also provides additional protection to victims of identity theft tax fraud. These taxpayers are issued âIdentity Protection Personal
Identification Numbers (IPPIN) which adds an additional layer of security in e-filing taxes. For the 2013 filing season, IRS issued
more than 700,000 IPPINs.
The IRS has reorganized to establish an âIdentity Theft Program Specialized Groupâ in all business units where employees are
assigned specifically to work the identity theft portion of the case. It has also implemented new tools such as the Identity Theft
Case Building Guide and the Identity Theft Tracking Indicator Assistant tool to help telephone assistors in resolving identity theft
cases.
These efforts helped the IRS protect $20 billion of fraudulent refunds in 2012, including those related to identity theft, compared
with $14 billion in 2011.
Source: IRS Identity Theft Advisory Council, Identity Theft Status Update, June 2013; TIGTA US Senate, âTax Related Identity Theft: An Epidemic Facing Seniors
and Taxpayersâ, April 2013
13. 13
Develop an Integrated
Solution Comprising Policy,
Processes, People and
Technology
A successful solution for countering
emerging types of tax and welfare
frauds requires an integrated approach
covering policies, processes, people and
technology. Policies including legislation
and guidelines need to be drafted to
discourage fraudulent behavior. For
instance, the State of Washington
recently enacted laws to thwart
zapping25. Implementation of policy also
needs robust processes that are difficult
to bypass. For instance, Swedish law
now mandates that POS systems must
meet strict technical requirements and
be connected to a control unit that
produces a digital signature based on
the content of the receipt26.
While polices and processes play key
roles in the fight against tax and welfare
fraud, people play the most significant
role in this battle. Employees need
to be sensitized about new ways of
tackling fraud. Identifying internal fraud
and collusion with external fraudsters
is another area where people play a
critical role. Similarly, taxpayers and
beneficiaries of welfare schemes need to
be educated on the risks of fraud such
can be effectively contained through
the implementation of robust digital
capabilities that can identify and thwart
emerging fraud. The efficacy of such
systems has already been established,
with ROI as high as 50x in some
instances27. In the US, the Centers
for Medicare and Medicaid Services
implemented new anti-fraud tools using
predictive analytics that prevented or
identified an estimated $115.4 million
in payments. The program achieved
positive ROI in its first year of operation,
saving an estimated $3 for every $1
spent28. Government authorities should
leverage the potential of innovative digital
solutions to increase tax compliance,
reduce welfare fraud and ensure better
services for citizens.
While it is true that traditional fraud is
on the decrease, however, as we have
shown, that isnât exactly enough reason
for tax and welfare authorities to relax.
As digital technologies keep growing
in complexity and capability, fraudsters
will continue to get bolder. They will try
newer ways of circumventing established
protocols. Unless government authorities
stay one step ahead of fraudsters in the
usage and understanding of emerging
digital technologies, the blue skies that
digital brings can very quickly vanish and
turn into a perfect storm.
as identity thefts and how they can take
steps to secure their personal data. Tax
authorities should also ensure they stay
ahead of latest technologies. They need
to do this by constantly refreshing their
understanding of new technological
platforms that can be used to enhance
citizen experience, while keeping off
fraudsters.
Adopt an Agile Approach
Countering fraud and evasion calls for
an agile implementation approach. It
involves running pilot projects to test
aspects of the potential solution. This
will help prioritize the rollout of new
capabilities and control costs. Pilot
projects also offer valuable lessons that
can be used to improve the final solution
implemented across the organization.
An effective feedback mechanism needs
to be established in order to keep pace
with evolving patterns of fraud, including
dynamic models that evolve in real time,
and prediction and identification of new
techniques of committing fraud.
Revenue loss through digital tax and
welfare fraud is a significant concern for
countries that are currently struggling
to rein in their fiscal deficit. While it is
difficult to combat digital fraud with
traditional measures, nevertheless, it
14. References
1 Demos.org, âTax evasionâ, 2011
2 HMRC, âMeasuring Tax Gaps 2013 Editionâ, October 2013
3 European Commission Report, âStudy to quantify and analyse the VAT Gap in the EU-27 Member Statesâ, July 2013
4 Enterprise Efficiency, âItalian Tax Authorities Automating Fraud Detectionâ, May 2013
5 HMRC, âSecond Estimate of the VAT Gap for 2011-12â, March 2013; HMRCâs Estimates of the UK VAT Gap, 2005
6 Centre For Tax Policy And Administration OECD, âReport On Identity Fraud: Tax Evasion And Money Launderingâ, 2006
7 HMRC, âChild and Working Tax Credits â Error and Fraud Statistics 2011-12â, 2013
8 US Department of the Treasury, âUpdate on Reducing the Federal Tax Gap â, July 2009
9 The Globe and Mail, âTaxman finds rampant restaurant fraudâ, September 2012
10 The Baltimore Sun, âMikulski to propose bill in wake of alleged Harford payroll firm tax fraudâ, April 2013
11 The United States Attorneyâs Office, District of New Jersey, âTwo former executives of first priority pay plead guilty to
conspiracy to commit wire fraud and tax fraudâ, October 2011
12 International VAT Monitor, âTechnology Can Solve MTIC Fraud- VLN, RTvat, D-VAT certificationâ, June 2011
13 BU School of Law, âCO2 MTIC Fraud- Technologically Exploiting EU VATâ, 2010
14 Europol, âEU Serious and Organized Crime Threat Assessmentâ, 2013
15 Coinmarketcap.com, âCrypto-Currency Market Capitalizationsâ, June 2013
16 PC World, âMt. Gox accused of violating US money transfer regulationsâ, May 2013
17 IRS, âIRS Releases the Dirty Dozen Tax Scams for 2013â, March 2013
18 Federal Bureau of Investigation, âMore Than 50 People Indicted in Massive Fraud Ringâ, September 2013
19 National Small Business Association, â2013 Small Business Taxation Surveyâ, 2013; ADP, âPayroll Outsourcing in Europeâ,
July 2008
20 National Restaurant Association, US; Eurostat
21 IRS, âAnnual Report to Congressâ, December 2012
22 The Globe and Mail, âTaxman Finds Rampant Restaurant Fraudâ, August 2011
23 US House of Representatives, Statement of National Taxpayer Advocate on Identity Theft Related Tax Fraud before the
Committee on Oversight and Government Reform, August 2013
24 American Bankers Association, âIRS Real Time Tax System Initiativeâ, January 2012
25 Newsroom Department of Revenue, Washington State, âGovernment Signs Bill to Zap Zappersâ, 2013
26 OECD, âElectronic Sales Suppression: A Threat to Tax Revenuesâ, 2013
27 Mynewsdesk.com, âRecord ÂŁ220m Haul From Wealthy Taxpayersâ, April 2012
28 Centers for Medicare & Medicaid Services, âReport to Congress Fraud Prevention System First Implementation Year,â 2012
14