Lessons on the journey to data quality: takeaways from the 2nd NTO Data Governance webinar
On 8 October 2024, the Network of Tax Organisations (NTO) hosted the second webinar of a series of three online events on Data Governance, organised in cooperation with the Inter-American Center of Tax Administrations (CIAT). Data Governance in action: the road to data quality brought together tax experts and practitioners from various regions to discuss data management in the context of revenue administrations. The virtual event explored the assessment of data governance maturity and the experience of the Kenya Revenue Authority (KRA) with data cleansing solutions. A Q&A session with the attendees followed the presentations.
The event was conducted in both in Spanish and English, with simultaneous interpretation into French, and Arabic. Tax authorities affiliated with NTO member tax organisations attended the webinar, which was moderated by David Borja, Executive Operations Manager at CIAT.
If you missed the first webinar of the series, check out this article.
Insights from Raúl Zambrano
In the webinar, Raúl Zambrano, Inter-American Development Bank (IDB) consultant and co-author of Data Governance for Tax Administrations. A Practical Guide, provided valuable insights into the importance of data management in tax administration. Through everyday examples, such as using an ATM, Zambrano illustrated how technology and digitalisation play a crucial role in optimising data management in this field.
He specifically highlighted how advanced technologies, such as machine learning and Artificial Intelligence (AI), can be applied in tax administrations to improve decision-making processes. According to Zambrano, there are three key areas where AI can be leveraged:
- Real-time data analysis: Enables data to be processed and analysed as it arrives, improving responsiveness to fiscal events.
- Automated decision-making: Facilitates the integration of data into tax administration decision processes.
- Economic projections and simulations: Uses AI to conduct studies and simulations that better inform tax policies.
Zambrano emphasised that this data-driven approach represents a shift in the traditional paradigm. It is no longer just about applying predefined rules but allowing data to become the core of decision-making, fostering deeper collaboration between human capital and technology.
"Decisions based on evidence enhance our ability to create value and manage risks more effectively".
This approach requires a robust data governance framework within tax authorities. To achieve this, it is essential that tax authorities take ownership and control of their data, and establish clear policies to ensure its integrity and reliability. Procedures and standards must be defined to guide data management, ensuring that decision-making is both accurate and secure.
Additionally, Zambrano highlighted the importance of developing strategic, operational, and support capabilities. Tax authorities must set a realistic level of data management maturity that aligns with their current resources and capabilities, including financial resources, human capital, and data literacy, among others. As this level is consolidated, their capabilities can gradually expand.
In summary, Raúl Zambrano’s presentation evidenced that data governance not only transforms decision-making within tax administrations but also lays the foundation for more efficient and evidence-based management.
The experience of KRA by Damacrine Masira
Damacrine Masira shared an insightful overview of Kenya Revenue Autority (KRA)’s journey towards digital transformation. In 2013, KRA began automating domestic tax processes – such as PIN issuance, filling returns, and making payments – as well as custom procedures. Prior to that, operations were manual, resulting in inefficient service delivery.
However, as KRA integrated its traditional methods into these new automated systems, issues with poor data migration arose, marking the beginning of their quality data quality challenges. To address this, KRA adopted a data cleansing approach that focused on three areas:
- Ensuring correct registration from the start, addressing system issues and policy gaps.
- Cleansing existing registration data based on risk.
- Maintaining the integrity of the taxpayer register and build organisational capabilities.
Masira explained how CIAT, with the use of the manual Data Governance for Tax Administrations. A Practical Guide, supported KRA in conducting a data maturity and governance assessment. This assessment helped KRA understand key issues they had with data, such as working with duplicated PIN numbers, providing a roadmap for improving their practices.
“Planning is key. We want to run, to implement, to tick a box. But policy guidelines and data quality maturity assessment are critical and should be prioritised”.
In her conclusion, Damacrine Masira shared the key lessons and challenges from KRA’s transformation journey towards improving data quality. Masira also stressed the need to conduct a maturity assessment before taking up data cleansing efforts, while underlining the importance of capacity building within the tax administration workforce.
The webinar concluded with a Q&A session, where participants form various tax authorities around the world expressed interest in Kenya’s experience. These peer exchanges highlight the value of knowledge-sharing events organised under the umbrella of the Network of Tax Organisations (NTO). Such discussions show the NTO’s crucial role in fostering practical, meaningful dialogue on common challenges faced by tax administrations globally.
The third webinar of the NTO series on Data Governance will take place in November. More information will follow soon.
Learn more about the NTO Data Governance initiative here.