Big Data’s Role in Taxation & Public Administration

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Big data is now playing a large role in most industries, with the number of uses for information rising regularly as new algorithms and methods to analyze data are developed. The application of big data in taxation has eased the effort required for high levels of accuracy, and has increased the uses for tax information around the world. Big data in public administration has yet to play a significant role across the industry, however, its potential awaits untapped.

Insight and Foresight in Taxation

Foresight, or predictive analytics, can simplify and streamline taxation by analyzing tax data that typically is examined by individual agents. Each year, the resources extended to checking tax information for inconsistencies results in a large amount of expended funds. There is no doubt that technology has helped to make taxation processes more accessible, and big data is another resource that will continue to simplify taxation.

According to an article by Villanova University, “The more processing power and data management that can be offloaded to computers, the less time humans will have to spend manually crunching numbers, constructing models, and conducting independent analysis.” This has some implications for tax professionals, however, while big data will continue to simplify the accounting process, taxation experts will gain new opportunities to evolve the tax industry working alongside new technology.

This is especially true as the big data in taxation is shared across countries to assist in monitoring the impact of business practices made by international corporations. An international standard for sharing information created by The Organization for Economic Cooperation and Development, or OECD has fostered collaboration between more than 90 countries to exchange big data in taxation. The use of this standard facilitates the evaluation of how the the global flow of profits may be affected by changes to corporate income tax.

Objective Understanding in Public Administration

While the elites of most industries have adopted some form of big data and analytics into their work processes, public administrators have been slow to adopt the new technology into their day-to-day worlds. However, the issues facing public administration seem so complex that it’s an industry that has not successfully found a proper application for big data. How could algorithms and data analytics possibly find solutions for failing schools and rural health crises?

If taken seriously within the public sector, data analytics could help us rise above the ideological debates that divide society.” writes Anirudh Ruhil, associate professor of leadership and public affairs at Ohio University. Although it is important for public administrators to understand the effects of various ideologies on the public, officials could gain a more in-depth understanding of the effects of policy through data analytics.

By allowing data analytics a space in public administration, administrators are trusting data and algorithms to dictate where the problems in policy reside and where to find solutions. The role of public administrators changes very little with the integration big data as it is still important for them to continue questioning and analyzing the effectiveness of policy, however, this will hopefully be ingrained more deeply in science by using data analytics as a tool.

There will need to preparations as big data integrates into all levels of government, including inundating their information into one place and developing the life cycle of their data. As these details are figured out, the implementation of big data will lead to more simplified processes in taxation and data analytics, which will continue to change and develop as new technology is born.

About the Author

Avery Phillips is a freelance human based out of the beautiful Treasure Valley. She loves all things in nature, especially humans. Leave a comment down below or tweet her @a_taylorian with any questions or comments.


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