Chapter 4
Increasing Tax Revenue
Chapter 1
Online Tax Collection
Chapter 2
Finding the Right Tax Software
Chapter 3
Improving Tax Compliance
Chapter 4
Increasing Tax Revenue
Chapter 5
Collecting Multiple Tax Types
What does a thriving community look like? Most would agree it includes residents and businesses benefiting one another fairly and cohesively, accompanied by an array of well-maintained public services and spaces serving the needs of the populace.
Behind the scenes though, there are also local governments working to maintain this community cohesion. The level of success they achieve is impacted by how accurately they facilitate and record tax filings, how well they nurture and enforce tax compliance, and how much tax revenue they generate, which can then be reinvested into the community.
This dynamic creates a domino effect. When businesses and residents feel supported by the government and have faith in their tax collection system, tax compliance begins to improve. When tax compliance improves, governments can generate more revenue to fund public projects and services.
This domino effect is dependent on local governments utilizing effective tax collection software and incorporating some critical best practices into their operations to increase their revenue stream. When properly implemented, these best practices benefit all stakeholders (residents, businesses, and government) in the tax process.
Implement a System That Allows You to Audit & Track Delinquencies
Governments often miss out on revenue when they are unable to accurately audit or track delinquencies. Online tax solutions can enable businesses to submit their taxes online via a smart form that calculates amounts owed based on their input.
If there are delinquencies, the system automatically accounts for additional fees. Internally, agencies can also report on all businesses owing taxes and easily track collections, so no dollar is missed. The result? Fewer discrepancies between the amount owed and the amount paid, so agencies never leave revenue on the table.
Providing a method of easy reconciliation into this system is also incredibly beneficial. With tax filing software, governments can offer multiple payment options, including e-check, credit card, and ACH credit for large remitters or third-party filers. A journal entry and detailed account of all remittances included in each settlement make it easy to reconcile all daily settlements to the agency’s bank statement. These built-in reconciliation tools save countless hours of work that local governments can direct to other initiatives to serve their community.
Implement Auto-Calculations of Penalties & Interest
A significant challenge local governments face concerning tax revenue is having a collection process in place that accurately ensures they are consistently collecting the correct amount. This includes penalties and interest owed by individual taxpayers.
By implementing a solution that provides automatic calculations of penalties and interest, and having the ability to process multiple tax forms through one digital cart, jurisdictions can ensure they collect all revenue due.
An online solution also gives agencies the ability to automate fee adjustments. Whether you offer a vendor fee discount for timeliness or add penalties and interest when a form is late, the system can automatically calculate and collect the correct amount every time.
Offer Taxpayers a Convenient 24/7 Online Business Center & Tax Portal
When it comes to crossing items off a to-do list, life frequently gets in the way. Likewise, entrepreneurs are busy running their businesses and often don’t have the time to show up to tax offices that have specific, restrictive hours on certain days of the week. When this is the case, they are more likely to submit late payments or forget altogether.
By providing businesses—and the wider community—access to an online business center and tax portal with on-demand filing that is available 24/7, taxpayers have the ability to complete tasks on their schedule when it’s most convenient to them. By not restricting the times and days of the week that individuals can make payments, local governments create a clear path to increase tax revenue.
Regular Communication & Notifications
In any setting or profession, clear, timely, and effective communication is essential for success, but it’s especially important for local governments looking to increase their tax revenue. When taxpayers are provided with clear filing instructions and simple explanations of their tax responsibilities and complex information and tax terminology, taxpayers are less likely to feel burdened or frustrated by the filing process.
With GovOS, this is accomplished through clear and efficient communication via an integrated notification module and by providing quick, responsive support to business owners.
This increased level of communication and transparency helps business owners become more connected and more informed of upcoming renewals, payment due dates, and any changes to their current tax requirements. These efforts are central to a successful compliance strategy, one that can precipitate an increase in tax revenue.
Maintaining These Practices Takes Work but It’s Well Worth the Effort
These best practices require a concerted effort to implement and a continuous level of dedication to maintain—things won’t suddenly change overnight.
Even so, by getting started with critical automation initiatives and efforts to simplify and clarify complex processes and tax information, local governments will find themselves with more time on their hands to address critical tasks as the efficiency and effectiveness of their operations augment one another.
Governments that implement these best practices can expect to experience better reporting capabilities, significant time savings, and, most importantly, increased compliance and revenue collection.
