Tax Administrations' Rules: It is better to do before than after

Human beings are very prone to making mistakes and forgetting things, especially in repetitive tasks. Therefore, it is much more efficient to use automated means - whenever possible - and try to have good quality information from the beginning.

In many cases, this requires very intense work at first, but ensures relaxation later. In some administrations, a very strong inertia has been observed, which discourages the use of proven technologies and methodologies that can greatly help to control information, since they view these efforts as "unnecessary" or too costly, for example processing information from third parties. The reality is that the more it materializes before, the less effort will be necessary later, since the information will have fewer errors and inconsistencies, which normally results in a substantial improvement in collection at a significantly lower cost.

A special case, which is especially seen in smaller administrations and is more likely to fail, is that of the completeness of the taxpayer registry. In these cases, only taxpayers who are already liable for a tax are registered, so these administrations are blind to those potential taxpayers who are not registered, with the consequent loss of resources derived from those actors who operate only in the informal economy.

This and other principles are available in the book Principios de Administración Tributaria published by Thomson Reuters - La Ley.