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Reforms and Investments

Advanced data-driven approaches and tools for tax compliance risk assessment and tax audits in Greece

Supporting reforms to reinforce efficient and high quality public administrations

Funding Programme
Year
  • 2023

Advanced data-driven approaches and tools for tax compliance risk assessment and tax audits in Greece

The European Commission supported Greece in building the capacity of the Independent Authority for Public Revenue (IAPR) on utilising advanced data-driven approaches and tools for tax compliance risk assessment and tax audits. The technical support was delivered by experts from the Swedish Tax Agency in a hands-on manner by sharing their knowledge, skills and advanced IT tools.

Context

The Independent Authority for Public Revenue (IAPR) of Greece is responsible for collecting the revenues while dealing with a variety of evolving challenges like the rapid development of information technologies and newly emerged business models that create an environment for new tax evasion and avoidance schemes and subsequently lead to undeclared and uncollected taxes and a significant tax gap. 

It is of critical importance that the IAPR builds a strong capacity to successfully deal with the new challenges especially in the area of tax audits using new tools and technologies, building a more systematic Data Warehouse for audit purposes, building the know-how for tax auditors to audit e-commerce business activities and new emerging business models. Tax evasion and tax fraud is one of the most challenging areas of intervention for the IAPR. Without proper tools, skills and knowledge - especially in the area of tax audits, tax administrations will always lag behind the fraudulent taxpayers, new business models such as e-commerce, the shared and gig economy, crypto IAPR currencies etc. 

In order to address efficiently and effectively the challenges related to tax avoidance and tax fraud, as well as the VAT gap, the IAPR needs a hands-on support to the IAPR employees on data-driven tools, techniques and approaches, which will increase their capacity to detect and fight successfully fraudulent activities. 

In this view, a project was implemented with the technical support of the Swedish Tax Agency (STA) and it was funded by the European Union via the Technical Support Instrument, managed by the European Commission’s Reform and Investment Task Force (SG REFORM).

Support delivered

The support was delivered through in-person workshops and online exchanges and meetings for a period of 24 months. The activities covered the following three Components: 

  1. Data Warehouse

Within this Component, a pilot machine learning/AI model was developed during the project, among other activities, to support the more effective selection of cases for audit.

  1. Risk Analysis and Selection

Under this Component, operational knowledge was provided for the development of the pilot machine learning/AI model, and methodologies were developed to enable in-depth “risk analysis” in order to identify and select the highest-risk cases for audit.

  1. E-Commerce

Within the scope of this Component, internet search techniques using OSINT tools were developed, along with methods involving e-commerce platforms and cryptocurrencies. In addition, with technical assistance from the Swedish Tax Agency, guidance was provided for the drafting of an e-commerce manual aimed at IAPR tax auditors.

Results achieved

The objective of this project was to build the knowledge and practical skills of IAPR employees in applying and using new technologies and data sources in both the selection of taxpayers for audit and during the tax audits themselves. In the medium and long term, this technical support will lead to more effective selection of tax audits, improved tax compliance, and a reduction in the shadow economy and the tax gap.

Regarding Data Warehouse, the main outcome is a better understanding and skills of the IAPR on possible AI use-cases, including generative AI, for tax administrations. 

In the area of risk analysis and selection of taxpayers for audit the main outcome is a broader perspective on risk analysis using both traditional and alternative approaches, improved risk and selection analysis through more in-depth analysis on qualitative level, strengthening the cooperation between different departments and competences within the organisation and exchange of best practice between tax administrations. 

Regarding e-commerce, the project builds strong capacity of the auditors on web shops investigations and OSINT (Open Source INTelligence). Furthermore, the IAPR has created its own manual for e-commerce case handling.

More about the project

You can read the documents related to the project here: