Shallon Asiimire: Technology’s Impact on Tax Compliance

2023 witnessed African nations generate approximately €1.69 billion in additional revenues through voluntary disclosures and improved information exchange mechanisms.

More recent estimates also suggest that Africa loses approximately $88.6 billion each year through various forms of illicit financial flows, representing about 3.7% of the continent’s GDP.

Thus, as African governments grapple with the challenge of ensuring fair and efficient tax collection, it has now become imperative that Africa take significant measures in leveraging technology to address tax avoidance schemes.

With an expertise honed through reviewing taxpayer filings to prevent abuse of double tax agreements, Shallon Asiimire, former tax accountant with the Uganda Revenue Authority, speaks on how technological advancements can transform tax administration. She believes it will enable revenue authorities to better monitor compliance and close loopholes exploited by tax avoiders.

“These tools allowed us to analyze large volumes of data in real time,” Shallon explains. “They helped identify irregularities in taxpayer filings and flag high-risk areas that require further investigation.” Data analytics skills empowered Shallon and her team of auditors to detect patterns that may indicate tax avoidance, such as unusual financial transactions or discrepancies between reported income and expenditures.

Advanced systems also cross-referenced taxpayer information with third-party data sources, ensuring greater transparency and accountability. “By automating routine audit tasks, we were able to focus on more complex cases, improving both efficiency and accuracy,” Shallon adds.

Shallon notes that tax avoidance does not just undermine revenue collection; it has far-reaching consequences for the continent’s economic development. When businesses and individuals exploit legal loopholes to minimize their tax liabilities, the government loses vital resources needed to fund public services such as healthcare, education, and infrastructure.

“Every shilling lost to tax avoidance is a missed opportunity to improve the life of every African,” She explains. “The ripple effects extend beyond reduced revenue into tax avoidance erodes public trust tax systems, making it harder to foster a culture of voluntary compliance.”

As an advocate for innovation, Shallon emphasizes the need to further harness technology in its fight against tax avoidance. “One area where we can improve is integrating artificial intelligence into our auditing processes,” she suggests. “AI-driven tools can provide predictive insights, helping us anticipate and address tax avoidance schemes before they occur.”

Shallon also advocates for enhanced collaboration between revenue authorities in different countries. By sharing information and best practices, tax authorities can more effectively tackle cross-border tax avoidance schemes.

Finally, she states the importance of investing in taxpayer engagement platforms by saying, “Simplifying tax filing processes through user-friendly digital systems can encourage more individuals and businesses to comply voluntarily. A transparent, accessible tax system fosters trust and cooperation.”