IMF RESEARCH SUPPORTS ELECTRONIC FISCAL DEVICES

MBABANE – It seems the decision by Eswatini Revenue Authority (SRA) to procure electronic fiscal devices (EFDs) is spot on.

This follows an empirical study of their impact on taxpayer compliance and administrative efficiency done by the International Monetary Fund (IMF). SRA has since made a call for an expression of interest for the provision of the EFDs and system. According to SRA, the implementation is expected to improve service delivery by enabling taxpayers maintain proper records as required by tax laws and regulations. SRA requires an affordable, simplified and secure mechanism through which taxpayers can capture, store and relay information to her systems and vice versa.

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According to IMF research, several administrations have adopted (EFDs) in their quest to combat noncompliance, particularly regarding sales and the value added tax (VAT). 

“Despite their widespread use, and their considerable cost, EFDs can only be effective if they are a part of a comprehensive compliance improvement strategy that clearly identifies risks for the different segments of taxpayers and envisages measures to mitigate these risks,” highlighted the report.

Although much remains to be explored to fully understand the impact of EFDs on compliance,  according to the research; the implementation of EFDs can only be effective if it is a part of a comprehensive compliance improvement strategy that clearly identifies risks for the different segments of taxpayers and envisages implementing a set of measures to mitigate these risks. 

“EFDs should not be construed as the ‘silver bullet’ of tax administration; as with any other technological improvement-and this applies as well to new technologies, such as e-invoicing-the deployment of fiscal devices alone cannot by itself achieve meaningful results, whether in terms of revenue gains or permanent compliance improvements.

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“The introduction of fiscal devices presents opportunities for the tax administration to rethink its approach to business processes, not only by automating the collection of information, but also by leveraging the new arrangements to improve compliance approaches and strategies,” stressed the report.

 Another area affecting the use and deployment of EFDs, according to the research is the constant evolution of the technology involved both in terms of cost reduction and improved performance of the devices. 

“The emergence of new technologies is a constant challenge to established views on fiscal devices. Several countries approached for the survey indicated that after studying the effectiveness, costs and administrative requirements of EFDs, they had decided that other technologies, in particular e-invoicing, would be more cost-effective,” shared the  report.

Another key conclusion from the study was that the introduction of EFDs was requiring considerable effort and was accompanied by associated costs both to the administration-in identifying the technology, selecting the devices, overseeing their deployment and monitoring their usage-and to the affected taxpayers in addressing the requirements of the new rules. 

Once the devices are chosen and available, it is essential that appropriate arrangements be put in place for their installation, support and maintenance. 

Meanwhile, completed documents must be placed in the tender box situated at the SRA Building, Portion 419 of Farm 50 Ezulwini, Along MR103 (Mvutshini-Gables Road) before noon on Friday, March 26, 2020.

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