Digital divide: 40,000 tax payments manual


Tribune Business Editor

More than 40,000 tax payments in 2017 were made manually, highlighting how far the government and private sector have to travel to achieve true digital government.

The Inter-American Development Bank (IDB), in an economic analysis of the potential benefits from its $30m project to transform the government's digital/IT infrastructure and boost Bahamian economic competitiveness, revealed that thousands of VAT, business licence and real property tax payments are still being made "in person".

Despite filing and payment requirements for all three taxes being available online, data disclosed by the IDB showed that 9,554 VAT payments; 7,592 business license fee payments; and 24,019 real property tax payments were not made digitally. Some 1,308 business registrations were also done manually, or "in person".

Collectively, more than 41,000 tax payments to the Department of Inland Revenue (DIR) were not made electronically, exposing how much work remains to reduce the time, cost and inefficiency associated with the continued use of manual methods.

The IDB report showed it was a similar tale at other key government agencies, such as the Registrar General's Department, National Insurance Board (NIB) and Road Traffic Department - all of which dealt with between 50,000 to upwards of 60,000 transactions for key services manually in 2017, despite many of them being available online.

At NIB, some 43,360 benefits and assistance claims were dealt with "in person", along with 8,176 and 8,215 new registrations of insured persons and employers/self-employed, respectively. And 50,000 driver's licence renewals were also processed using the same method.

As for the Registrar General's Department, some 31,200 birth certificate copies; 22,900 deeds search payments; 7,530 "letters of good standing"; 9,747 birth, death and marriage certificates; and 4,989 "other company services" were all handled by non-digital means. The report acknowledged that while some of these services could be applied for online, the likes of birth and death certificates still needed to be picked up physically from its offices.

Still, the IDB analysis revealed the results of a Registrar General's Department survey, which estimated that customers could save an average of $10.91 per transaction if they did it online as opposed to appearing at its offices 'in person'.

Turning to the benefits from a fully-functioning, interlinked Government IT system, it studied the impact this would have on "life verification" for NIB pension beneficiaries and birth certificate requests at the Registrar General's Department.

"The pensioner life verification of the National Insurance Board is a requirement of all Bahamian NIB pension recipients: They must show up in person at an NIB office to prove that they are still alive and thus eligible to continue receiving pension benefits," the IDB report said.

"Through the interoperability platform, the NIB will be able to learn which of its beneficiaries have passed via a connection with the Registrar General's Department and the morgues, thus eliminating the necessity for pensioners to conduct this transaction."

With 36,000 such beneficiaries, and each having to appear twice per year, the IDB pegged the potential annual savings to this group from such an e-government platform at $410,530.

Although the IDB analysis did not focus on public sector downsizing, it looked at the impact from redeploying staff dealing with 'in-person' requests. It found that three Department of Inland Revenue staff are assigned to process real property tax requests; eight Road Traffic staff process driver's licence renewals; and 14 staff handle manual inquiries at the Registrar General's Department. Their combined salary costs are currently $596,000

"Currently, a number of government personnel are dedicated to exchanging information among government agencies through Excel spreadsheets or other labor-intensive means," the IDB analysis said.

"The programme will support the installation of an interoperability platform to automate the exchange of information between government agencies, thus drastically reducing the need to spend staff resources on this task. Additionally, it will finance other automation improvements, limiting the necessity of manual intervention."

The analysis focused on 40 Inland Revenue dedicated to data exchange and processing of tax compliance certificates, refunds and amendments, and Business License applications and renewals. It also considered 11 National Insurance Board staff dedicated to pensioner life verification and data exchange for Business License renewals.

"The savings on these staff will be nearly immediate following the connection and programming of the interoperability platform. The current annual expenditure on these staff is $1.126 million," the IDB analysis said.

"As more services are conducted online, and interoperability reduces the need for citizens to present physical proof of different documents, government will need less paper and ink to produce such documents.

"An indicative analysis of the Registrar General's Department found that current annual expenditure on paper and ink is approximately $238,200. The savings on this item are assumed to be proportional to the rate of uptake of online services."