Taxes: Two cheers and a few suggestions

I read a long rant about the online submission of taxes posted on X, formerly Twitter, on the last day for submitting income-tax returns. This was by Nisansa de Silva, a friend who teaches computer science. It was a long thread and included words such as “rage” and many other words in capitals. But the most important sentences were: “Now I understand that this is the first time they are doing this online and it is bound to be bumpy. Woe be it if they go back to paper.”

I too had spent many hours, standing in line to get my PIN, staring at the screen waiting for the system to respond, etc. I had gone through the same torturous process but strangely I experienced no rage. Was it simply because I was double my friend’s age? 

It was because I took part of the blame. This was not the first year they offered online filing. It was the year they made it mandatory. I had been asked to pick up my PIN six years ago when I had responsibility for matters digital in government; they had sent me a temporary PIN three years ago so that I could save a visit. And I had not taken a PIN. 

I teach about the peak-load problem, and I knew the system would be slow at best (and may even crash) on the deadline date. And yet, there I was standing in line for a PIN at the Inland Revenue head office two days before the deadline; and there I was staring at the screen hours from the deadline.

One cheer

Making everything to with taxes online is worth a cheer. And as shown by my (mis)behaviour, sometimes you have to crack the whip. If filing online was not made mandatory, I would not be writing this article. I would have done the calculations on my computer, entered the results in handwriting, and handed over the paperwork by the deadline. Having suffered the consequences of an inattentive employee wrongly entering my TIN, I know full well the need to eliminate handwriting and the reentering of data from the process.

So, one cheer for throwing us into the deep end even with a bad product. But as my enraged friend said, do not go back to paper however many complaints there are.

Second cheer 

At the Inland Revenue head office last week, it was obvious they had not made adequate plans. Having beaten the bushes to increase the ranks of the tax filers and mandating online filing, they should have expected large numbers of taxpayers to come asking for PINs, especially because the online guidance was to come to the head office (on the hotline, it appears the correct instructions were given). The other option of waiting for the PIN to be mailed was no longer feasible by the last week. 

But why did the website give only one location, when there are multiple tax offices? I was told that a PIN could have been obtained at those locations, but that was after I had been standing in line for some time.

But they improvised. Temporary counters had been opened and you could see officials working diligently under sub-optimal conditions. The responsible senior official was on the ground, trouble shooting and explaining. Even the Commissioner General came down to see what could be done to move the lines faster. So, the second cheer for hands-on improvisation.

Suggestion one

As anyone who went through the process can testify, the user interface is atrocious. If I were to describe all the flaws, this will turn into a long and boring article. But one problem is illustrative. If a mistake had been made in schedule 7 or 8 and was discovered after the pages had been saved, it was necessary to go from the start, saving each page. This just adds to the load on the backend and degrades service quality for all. If the system allowed direct access to a page, much pain could have been avoided.

But that is not the suggestion. It is that the Department convene user groups to run through the process demonstrating the pain points they experience. The user interface team can use the findings to improve the interface. One cannot understand the difficulties normal people have with technology without looking over their shoulders as they navigate the system.

Suggestion two

In the US, every government form had to indicate how much time would be needed to complete it, on average. This was a floor indicator, because it could not include the time required to gather the necessary documents. It would be a good practice to adopt in all government agencies, but Inland Revenue can be the pioneer. 

In the case of online forms, which is the only option regarding individual income tax returns, what would have to be calculated would be the average time to completion. This would most likely lead to adding to the four options (paths) offered at present. For example, the process could be made much easier for many senior citizens if an additional path could be carved out for those reporting investment and interest income, in addition to the interest-income only option.

Suggestion three

Minimise the requirements to upload scanned documents. Unlike in the old days, entities that collect taxes on behalf of the state (PAYE, Advance Income Tax, Withholding) do so electronically. The RAMIS interface requires the filer to fill in all the details of the entity that withheld the money, including the TIN, certificate number, date, etc. It should be easy to match these details to the details accompanying the remittances from the employers, banks, etc. It’s difficult to see what value is added by the requirement to scan the certificates and upload them.

Minimising the uploading of supporting documents will save the taxpayer time and reduce the load on the system. As the system is improved, it may even be possible to have the withheld-and-remitted amounts automatically filled in by the system. It is only in the few cases where the amounts claimed by the taxpayer do not match what’s in the system that there would be a need to upload documents.

Suggestion four

The performance of any system under peak-load conditions is what matters. As the number of taxpayers increases (as we all hope it would) there will be more people trying to submit their payments and returns on the last possible day. Some congestion at peak is unavoidable.

Many organisations try to flatten the peak, using incentives or disincentives to push users to the valleys. Inland Revenue may consider distributing taxpayer interactions across the entire month of November by giving different deadlines to different groups of taxpayers. This is the crudest form of flattening the peak.

Another method is to set discounts and surcharges. Submit 30 days early and get a 5% discount (but it would be necessary to prevent a peak developing there!); submit five days late and pay a 5% surcharge, for example.

In conclusion

The efforts made by Inland Revenue to digitalise the system must be appreciated. The Department has the potential to become a leader in Government digitalisation if the momentum is maintained. No longer will it be the poster child of Government digitalisation failure.

The actions of Deputy Commissioner General and other senior officials who waded into the crowds to trouble shoot in physical space should be replicated by the design teams in virtual space. Learning from the users and their experiences in navigating the system will be key to earning three cheers next year.