Government

Anti-fraud technology for sales tax audit

A common policy measure to prevent manipulation of sales data recordings suppressing sales, is legislating the use and handling of sales recording systems in different compliance areas with different applications:

Sales recording systems: cash registers of all kinds, taximeters, vending machines, ticket kiosks, parking meters, fuel pumps etc.
Compliance sectors: retail, hospitality, service, taxi, transport ticketing, parking


The purpose is to secure recorded sales data - the fiscal information - in a tamper proof way so that data can be easily traced, retrieved and analysed in a tax inspection and audit. Our solutions make sales suppression detectable and easier to prove if an offence has been committed. They deter and prevent manipulation of data inside a sales recording system.

Fiscal technology does not only control compliance, it can also benefit tax payers by facilitating tax compliance, making it easy to make it right.

We empower tax authorities to fight sales tax fraud with technology

Depending on the specific choice of a jurisdiction, techniques may be defined in regulations as fiscal control units, fiscal data modules or sales recording control devices. With the advancement of sales recording systems from traditional simple devices to more modern multi-functional ones, there is a continuous need for advanced data security.

Our concept

Our technology concept is a combination of software and hardware where recorded sales data (receipt information, fiscal data) is stored and secured with cryptographic software keys, encrypted signatures or certificate signatures [e-signatures]. A unique control code - a traceable ID for each transaction – is generated from receipt data.

Security is the core principle of our solutions

Tailored to fulfil any specific regulation, our products are integrated with a sales recording system regardless of their type, either i) fully integrated as a module inside a sales recording system (or receipt printer), ii) placed externally as an external box or iii) placed in the cloud, storing encrypted real-time digital records.

In tax inspection and audit, data can be retrieved offline on site or be online transmitted to a tax authority; a cloud-based solution.
There are a number of different options to choose from when mandating taxpayers in a sector to use a sales recording system with security feature.

We build our tamper proof fiscal data modules on a generic technology platform with a range of functionalities that flexibly can fulfil every specific jurisdiction’s technical requirements of efficient and affordable fiscal compliance devices.

Our focus is on data security, storage and transmission security – with minimal invasiveness to sales recording systems. Our technology is easy to install and ensures full regulatory compliance as it takes care of securing, storing and transmission of fiscal data so that sales recording system providers only need to make an absolute minimum of software updates to their products.

Our scalable technology increase tax revenue opportunity without a tax increase

Online data transmission: connected fiscal systems

Our end-to-end fiscal compliance solutions meet the needs of jurisdictions that require sales recording systems to be connected online to their tax authorities’ back-end data management systems for remote audit and data analytics. It facilitates picking up signals of compliance risks such as anomalies, deviances, trends and gaps in sales recordings.

Our generic technology platform is based on leading Internet of Things components for online encrypted data transmission and storage at highest security level. It provides secure access to authenticated sales data and user-ID. It supports tax authorities that would like to digitize their tax administration and achieve efficient data collection, monitoring and analysis in any tax compliance sector.

We help modernize tax administration systems, accelerating digitalization with cost-efficient end-to-end solutions

Retail Innovation DeviceCloud - a technology platform

For tax administrations using digitalisation to enhance their audit processes cost-efficiently, we offer a technology platform for a data and device management service tailored to large scale fiscal systems where data is securely stored and transmitted to a tax authority back-end system via the Retail Innovation DeviceCloud.

Through the DeviceCloud, sales recording systems and fiscal solutions can be securely upgraded online over their lifecycle and even decommissioned if required. It can also support for example instant online introduction of new VAT rates or updated fiscal software.

Our DeviceCloud can be placed on Tax Authority premise or hosted by 3rd party service provider.

We promote connected solutions for online tax collection and maximized tax audit efficiency, driven by modern agile legislations and technical requirements

Our clients

We are an independent neutral partner to the industry of sales recording systems when governments notify new requirements for market players and tax payers, end-users. We also provide technology directly in public call for tenders.

Advisory

Based on our extensive experience across multiple fiscal markets and jurisdictions, we provide key expert advice for legislators and decision-makers at ministries and authorities.

Decision-makers will benefit from a vital understanding of the dynamics between policy, technology and market to find the optimal path to modernize tax administration and tackle underreporting of sales taxes.
That is why we give input to the efforts to digitize tax administration; investigating, planning and designing policies and regulations to collect sales tax data, achieve increased tax compliance and facilitate tax filing in different market sectors.

We offer technology demonstrations; proof of concept projects, validation studies and tech field tests as well as input to calculations and cost/benefit assessments.

We help governments find added-value and a public-private win-win: curbing fraud AND facilitating compliance, creating smart synergies between efficient tax collection and tax payer service

We have shared our knowledge with decision makers in more than 20 jurisdictions and contributed to international discussions and knowledge exchange in the area of tax fraud and technology at different international fora, for example at the 4th OECD Forum on Tax and Crime, IOTA the Intra-European Organisation of Tax Administrations and the US FTA Federation of Tax Administrators.

If you would like our White Paper with general recommendations for governments, please contact Marie Ivarsson, Vice President Government Affairs marie.ivarsson@retailinnovation.se

Insights

The area of policy measures to curb underreporting and sales tax fraud through fiscal laws is constantly evolving with technology’s progress and market development. It goes hand in hand with the global trend of governments needing to modernize and digitize tax collection systems that will make them more efficient for businesses and more cost-efficiently for public administration.

Here are a few examples of organizations, fora and reports that deal with these issues:

OECD Electronic Sales Suppression: A threat to tax revenues (2013)
OECD Technologies for Better Tax Administration A Practical Guide for Revenue Bodies (2016)

Capgemini Consulting Digital – Blue Skies or a Perfect Storm for the Taxman? (2013)

Swedish Tax Authority
Impact study - the Swedish Cash Register Act (2013) länk!

IOTA The Intra-European Organisation of Tax Administrations (IOTA)
Workshop Effective Use of Certified Cash Registers as Preventive Measures Against the Cash Economy

American Federation of Tax Administrators (FTA)
2015 Annual Meeting: general session Multiple Approaches to Sales Tax Suppression