COVID 19, now named a pandemic, came as an unwanted visitor, merged with as many people as possible unknowingly and then tens of millions of the whole world including the whole ecosystem just succumbed to its pressure. But how many of us know the extraordinary steps taken by the tax administrators of various nations without making any noise or prevention of their activities, quietly coordinating among themselves, and cooperating with their governments unpretentiously? Hence, they have emerged as unsung heroes for us. Here is an attempt to remember them and recognize their efforts.
This article of mine celebrates the sublime acts of these noble institutions and recalls the actual actions taken by them. One recalls the extraordinary efforts of OECD (Organization for Economic Co-operation and Development) from Europe in this regard and their article from their web site explains and admires the administrators of tax from all countries in the world.
The preamble sets the stage for a deeper understanding of the efforts of administrators:
“In response to the COVID-19 crisis, many tax administrations have taken on new roles to assist in the provision of wider government support. In many cases, these have entailed responsibilities not normally provided by tax administrations, such as making support payments to citizens or providing new forms of analytical assistance to other parts of government.”
Some of the new roles can be noted under financial assistance, providing services, and information assistance. These were intended to support citizens and businesses whether closely targeted or on a large basis, using tax administration staff or services to support governments in their COVID-19 responses and sharing of information in their government’s efforts by using the administration’s data analytics capabilities.
This article intends to give country-wise efforts of tax administrators role during the pandemic which still continues relentlessly. The actions themselves speak.
Financial support for citizens
Canada: Canada Revenue Agency joining hands with another government department has been providing financial support to Canadians who lost income or employment due to the pandemic. It has also started assisting affected post-secondary and high school graduates who could not get any employment opportunities.
Israel: Israel Tax authority has been providing grants to the self-employed to help compensate for lost business income.
Latvia: Latvian tax administration has been making benefits of payments to employees of companies affected during the recent time.
Lithuania: Applying a one-stop principle its tax administration and or State Social Insurance Fund Board is providing support to individuals and businesses affected by COVID-19.
Malaysia: Through the existing cost of living aid programs, the Malaysian Tax administration helped individuals and businesses and National Caring Aid was used to help eligible citizens by cash payments.
United States: the United States Internal Revenue Service has been making economic impact payments to its citizens. It has also been helping individuals and businesses in their tax issues by various ways. The largest number of taxpayers have been receiving checks from various sources to withstand the pandemic.
Employer subsidies:
Canada: CRA has been delivering the new Canada Emergency Wage Subsidy program which helps eligible employers to re-hire workers who were previously laid off and to help prevent job losses and enable businesses to resume operations.
Ireland: Revenue Ireland has implemented a temporary wage subsidy scheme with subsidy payments being made through the payroll tax system.
Company subsidies
Israel
ITA developed in house IT systems which helped to make grant payments to small and mid-sized businesses to cover fixed costs which could not be reduced. The systems automatically pay applicants after studying risk assessment procedures. This has turned out to be a remarkable achievement.
Finland
The Finnish Tax Administration provided loans up to three months amounts of value-added tax to tide over the recent economic crisis, at the request of its government.
Malaysia
A Special Caring Grant was implemented to provide financial aid to qualified micro-enterprises affected by the recent economic crisis.
Sweden
The Swedish Tax Agency has been making payment of sales support to all companies whose sales had dropped 30% recently. Additionally, it is also administering reduced employer contributions for all companies over a period of 4 months.
Providing services
Georgia
Massive efforts undertaken can be summarized as under:
The Georgia Revenue Service (GRS) has been extending maximum support to the Ministry of Health and Social Affairs of the government to process information received from self-employed people who suffered recently and these do include those who might not have registered as tax payers but eligible to receive the compensation from the government.
“The GRS is monitoring the implementation of the government’s COVID-19 response on a daily basis. In particular, mobile teams:
- Identify entrepreneurial entities that are obliged to suspend their economic activities during the state of emergency, and take measures in accordance with the legislation; and
- Monitor the entities which are not prohibited from conducting economic activities during the state of emergency, in terms of whether they comply with the requirements and recommendations set out by the government, such as using protective equipment and gloves by service personnel; monitoring and taking measures to maintain social distancing between customers; carrying out disinfection, etc.
The GRS is providing assistance to the government telephone hotline, which was specially developed during the pandemic to answer all questions related to the state of emergency, new regulations, etc.”
Ireland
Revenue Ireland has redeployed staff and is supporting other government agencies by:
- Reassigning staff to support the Health Service with contact tracing, data analysis, telephony and research;
- Assisting the Health Service in the establishment of Contact Tracing Centers; and
- Loaning staff with relevant experience to provide telephony advice to the agency responsible for social security payments.
This will also help the government to utilize the employees from tax administration for timely help for Health Service which plays a major role in fighting the pandemic.
Lithuania
The Lithuanian State Tax inspectorate is providing information based on the income tax paid in 2019 by small companies to the Ministry of Economy and innovation for paying subsidy to withstand the economic loss due to pandemic.
Russia
Russian Federal Tax Service has been assisting the government in educating the businesses the eligible support measures beyond tax-related issues.
Spain
The Spanish Tax Administration (AEAT) has been assisting the Ministry of Health with IT services and other public bodies on a voluntary basis. Along with the government, it is preparing the quantum of financial help to be given to those affected by the recent pandemic.
United States
As per expectations, the IRS has been helping Health authorities and also custom authorities in connection with medical material import.
Information Services
With the best information available with tax authorities it is not unusual to find them extending required information, analysis of information for calculation purposes or even operation of IT Services in other departments of the government. It goes without saying that the best talent is available with tax authorities and the noble role, multi-dimensional in nature is not unexpected.
Georgia
GRS collects and processes information about individual taxpayers who lost income due to COVID-19 and are eligible to receive monthly compensation from the government for six months (from May to October 2020). Each month, GRS passes the final list of beneficiaries to the State Agency of Employment Support, which is in charge of paying the compensation.
Hungary
I am not surprised to find that the Hungarian Tax Administration is supporting the Hungarian Statistical Office by providing new data sets and more frequent statistical data. These data would be used to help individuals/businesses for receiving financial help due to the recent massive economic crisis.
Ireland
Revenue Ireland provides data on taxpayers to other government agencies who are in the process of helping taxpayers/individuals/businesses for cash help or medical-related matters.
Malaysia
The Malaysian Tax Administration has been supporting the government by using taxpayers’ information to process and verify eligibility for special financial aid during the COVID-19 pandemic. This includes National Caring Aid (for households and single individuals) and the Special Caring Grant (for micro-entrepreneurs).
Portugal
The Portuguese Tax Administration has been providing taxpayer information (a fiscal situation, income, turnover, or other relevant information) to other government bodies to allow them to check whether taxpayers are eligible to benefit from subsidies that can be used to adapt and restructure activities and operations to meet new requirements related to COVID-19. In addition, the Tax Administration is assisting other government bodies concerning the validation of income shortfalls, so that taxpayers can benefit from a reduction in rents where appropriate.
Among the countries, this shows even consideration of reduction in rent in case of income shortfalls. This is an unusual kind of act of the government to look rent subsidization as a means of help. Many employers have shown high rent as an impediment to renewing the business cycle.
Russia
The FTS has provided information to relevant bodies about SMEs which have applied for employment retention bank credits that are guaranteed by the government as well as for applications for employment retention subsidies. This indicates that bank credits were guaranteed by the government. This also resonates with the action taken by the Indian government on a large-scale guaranteeing loans of small/medium borrowers.
Spain
The following information taken from the web site is interesting.
“AEAT supplies specific tax information to other public bodies (financial, employment or contractual services) in relation to the granting and control of aid, subsidies, guarantees, public contracts, etc. related to the measures taken to fight against or mitigate the effects of the pandemic.”
It is a holistic way of helping other departments in the discharge of their duties. It is a highly appreciable act.
Sweden
The Swedish Tax Administration has been providing support to another government authority in making aid payments to companies that have had to lay off staff due to the crisis.
United States
It is a pleasure to hear that The IRS has been using its database of contact details to support wider government communication.
We have been further informed that IRS has been using its vast experience in data analytics, modelling etc., to support health authorities in mapping relationships and disease spread patterns and helping other government departments both with its manpower as well as data.
It is not unusual to hear that the IRS has been extending outstanding service to other departments but it should be encouraged to engage more manpower to handle challenging tasks.
The web site also raised certain issues linked to various activities newly undertaken by various tax departments in almost all countries. Let us look at some issues raised to widen the discussion:
- Rapid development of IT solutions: Income tax administrators are well provided with enough data, enough equipment, and trained manpower which have been a boon for others like health department or others who have to compile basic data, analyze the eligibility of citizens to get employment subsidies in case of loss of jobs, enable a business to meet the challenges arising out of loss or suspension of business, etc.
- Effective steps need to be taken while sharing enormous data among other departments either from onsite or offsite by deputing the manpower to help other departments who may not be so technically advanced like tax departments who have almost computerized all over the world and among all countries. Frauds in disbursal of subsidies or handing over cash do require a detailed audit trail that would form the back-office data to be used in the future or conduct post disbursement audits of funds used during the pandemic.
- Most of the income tax departments would have faced logistic issues related to stay, health considerations of the employees deputed in spite of the increasing trend of the disease and coordination among various government departments which normally take place with adequate time in normal times.
- Even issues like new industrial units, loss of jobs among employees, provision of new training for the employees to get new jobs and in case of large countries coordination among various state governments at the state level would have given new opportunities along with attendant risk would have given enormous difficulties in the nation.
Conclusion
While quite a few articles were written by me on the pandemic in India, United Kingdom and U.S.A and enormous arrangements made by India and successfully too, many would not imagine the extraordinary pressure brought by the pandemic which created terror among all countries and citizens of all countries.
By covering the planning, execution and Herculean tasks undertaken in 27 instances by various countries under the heads
Financial support for citizens, employer subsidies, company subsidies, providing various services like health, calculation of economic support or provision of IT services and information services for all departments of various demands under extreme pressure and time constraints, income tax administrators have been doing a great humanitarian service to the whole earth. Normally one does not associate income tax with vast canvas of services being undertaken by them as explained above.
Let us applaud the giant strides made by Income tax administrators and also appreciate their human gesture in risking their lives to serve human mankind.
Disclaimer: My efforts in expressing my views about the action taken by various countries in meeting pandemic is purely mine and my way of looking at events. Neither taxguru.in or any of the governments nor OECD is responsible for my views. Please refer to web site concerned to learn more.
Author Bio
