Sales tax is consumption tax which is imposed on the customers by the government for consuming certain goods and services. There are some people who thing the new technology is a hindrance for the sales tax strategies while there are also others who thinks it will help with sales tax. So, it depends on the factual evidence of the new technology which tells us if Trends helpful or is a hindrance for the sales tax strategies.
The digital economy has presented the tax workers and taxpayers with the governments and multination’ with the tax challenges along with some exciting tools as well. After the rise of the digital economy, it has rendered many of the established ways for collecting the sales or income taxes obsolete.
Historically speaking, the taxation systems were typically designed to the tax sales of goods and services at a point of sale and through it a corporate and personal income in the location where it is earned. Now due to the online sales, of the retail goods and even the services, all of the lines have been blurred. There are tax policies which changes really slowly which can often penalize the traditional companies and reward the upstarts without necessarily meaning to do that.
The sharing economy is also adding some vast numbers of the new transaction without any clear taxation model. For example, many city authorities have taxed the hotel users or those who stay at the hotel. Now some cities such as Paris they are trying to tax those who rent their spare rooms to some short-stay visitors.
The organizations and the governments together they should take advantage of the new technology which can close the digital tax gap. This digital tax gap exists between the existing tax policy of the country and the rapidly evolving digital economy. More and more of the new start-ups are inventing some digital tools which are designed to help the countries and companies to overcome the increasing complexity of the tax compliance issues.
Though there is one problem which needs to be addressed: that is the quality of data. Since every sales transaction in the digital economy has been recorded by the computers now, they are also tracking liabilities which should be easy and yet there is nothing that will be further from the truth.
EY Americas System Leader, Ryan Tweedie says that, the quality of the corporate data which was declined around 4 or 5 years ago when the companies turned their own software systems into some application which was easy for them to operate that mimics the consumer platforms. Because the software then became easy for them to use.
Another tool which should prove to be helpful is the computer systems which learn from experience, they are also known as the artificial intelligence (AI). Though some people are optimistic that the AI could be used to tackle the tax issues which are generated by the digital economy and they can help resulting the overhaul of the tax systems as well.
For the new tech trends to be helpful for sales tax strategies you need have an updated digital economy as well as the new technology for the sales tax as well. So, the new technological trends can be helpful for you if you have an up-to-date system and hindrance for you if the data quality is poor which you have.