CIAT drives innovation and productivity for national tax agencies

National tax agencies need productive and innovative data solutions

Systems of taxation vary among governments. Many countries have national tax agencies that oversee the administration or the collection of taxes for businesses and individuals. As such, national tax agencies collect and manage vast volumes of intricate data, and often spend precious time and resources to accurately, organize, analyze, and extract meaningful insights from that data—and illuminate potential non-compliance situations. The Inter-American Center of Tax Administrations, CIAT for its acronym in Spanish, supports these agencies with technology and guidance to build processes and systems that can scale as tax regulations and requirements change and agency needs evolve. “Unlocking insight and empowering tax agencies to become more efficient is a top priority for CIAT,” says Raul Zambrano, Director of Technical Assistance & ICT at CIAT. “One of CIAT’s core missions is to make tax agencies modern and more productive.”

One way to do that is by facilitating cooperation among national administrations by creating tools or systems that support the collecting and sharing of knowledge and best practices. Recognizing the productivity issues that make this mission a challenge, CIAT collaborated with Microsoft to develop a groundbreaking accelerator. Powered by Microsoft Azure, the accelerator is custom-designed by Microsoft to meet specific needs and compliance requirements for CIAT’s member countries, and it incorporates cutting-edge, cloud-based AI technologies as well as advanced analytics. 

The accelerator helps CIAT meet its goals by speeding time-to-value and helping to transform current tax administrations into future-ready systems, supported by data and insights that drive meaningful change. "We’re excited to continue to work with Microsoft to usher in this new era of innovation,” says Márcio F. Verdi, Executive Secretary at CIAT. “Together, we’re working to really impact tax agency efficiency, as well as curb fraud, and just make things more streamlined, overall, for administrations and taxpayers alike.”

A transformative accelerator from CIAT and Microsoft 

To address the unique challenges and requirements of national tax agencies within CIAT, Microsoft developed the e-Invoicing Anomaly Detection Solution Accelerator (e-IAD). This program incorporates needed capabilities gathered across CIAT’s extensive network of 42 member countries to ensure widespread usability. As part of CIAT's ongoing commitment to tax compliance enhancement, the accelerator has recently been launched in Costa Rica to learn its impacts and explore its reach.

With the e-IAD at work, the Costa Rican team has been able to identify and analyze anomalies and outliers in the issuance of electronic receipts, explore different ways of analyzing data from electronic receipts, analyze the behavior of taxpayers regarding the electronic voucher issuance, and become more productive by improving its analytical and risk assessment capabilities

By harnessing the power of trainable AI algorithms, the accelerator optimizes data collection and analyzes e-invoicing data into an interactive and immersive dashboard. This dashboard then facilitates efficient audits of diverse data sources, including comprehensive commercial behavior analysis, e-Invoicing data quality analysis, and precise anomaly detection. Azure Synapse Analytics provides data integration and analytics to manage the massive information and data pools created by these automated processes. And going beyond anomaly detection, the accelerator also provides personalized guidance powered by machine learning that allows the team to strategically allocate their efforts where they’re most needed.

Speeding time-to-value with compliant solutions

 In the initial adoption phase, the Ministry of Finance in Costa Rica experienced multiple, significant benefits from utilizing the accelerator. This includes making it possible for the auditing department to identify relevant cases involving irregular patterns by leveraging e-IAD's anomaly detection capabilities. In addition, the accelerator identified actionable insights based on detailed business analytics after detecting validation errors during the e-invoicing process. "Getting these insights allows for faster and more confident decision-making and resource allocation,” says Mario Ramos, General Director of Taxation for Costa Rica. “This makes the accelerator a deeply impactful solution for our administration” says Giovanni Tencio, Tax Intelligence Manager for Costa Rica.  

Verdi adds that, overall, the e-IAD initiative has helped to enable truly unified data governance, which reduces high risks, enhances compliance, and elevates operational speed by improving the quality of the data teams receive from taxpayers. Based on the success of the program in Costa Rica, CIAT is currently deploying it in three member countries. “With continued support from Microsoft, we are able to develop additional scenarios and meet specific needs from our member countries to really address the diverse needs of tax administrations around the world,” says Verdi.

Learn more about CIAT.