MTCA Leaps into Digital Era to Swiftly Identify Potential Fraud Risks

In a bold move to revolutionize its tax compliance processes, the Malta Tax Compliance Authority (MTCA) has embarked on a digital transformation journey, leveraging advanced analytics and artificial intelligence (AI) to swiftly identify potential fraud risks and errors in declaration filings.

From Manual Processes to Advanced Analytics

The agency’s traditional manual processes were cumbersome and inefficient, relying on sample sets of tax data and limited analytical tools. However, with the introduction of SAS technology, MTCA can now rapidly examine all available data, including third-party information integrated through data-sharing agreements.

Empowering Users

The new system empowers all users, not just coders, to uncover insights within the data, generating reports and democratizing access to information. This enables auditors and analysts to quickly identify potential compliance discrepancies and take proactive measures to address errors and non-compliance issues.

Real-Time Insights and Proactive Measures

“We’re no longer just looking at a sample set of data; we can now examine all available data to identify potential fraud risks and errors,” said MTCA official, Caruana. “This allows us to assist taxpayers in preparing their declarations and submissions, and proactively identifying issues before they result in penalties.”

Developing New Digital Tools and Services

The agency’s modernization journey has also led to the development of new digital tools and services designed to make compliance easier for taxpayers. Additionally, MTCA is researching socioeconomic drivers and taxpayer behaviors that may contribute to non-compliance issues.

Standardizing Processes and Governance

Behind-the-scenes, the technology has enabled process standardization and the creation of an end-to-end, data-driven governance system. This has also led to a paradigm shift in auditing processes, enabling auditors to cross-reference self-reported data with third-party information and make more informed decisions.

Building Better Relationships with Taxpayers

“We’re not just looking at compliance; we’re looking at how we can build better relationships with taxpayers,” said MTCA official, Vella. “We want to explain why irregularities exist and offer assistance to help them avoid future mistakes.”

Ongoing Transformation and Future Expectations

While the agency acknowledges that its digital transformation is an ongoing process, it believes that the technology will ultimately lead to more effective and efficient audits, as well as improved taxpayer compliance.

“Will we accomplish all this in two weeks? Certainly not,” said Caruana. “But we’ve charted the course, made the correct investments in the right technologies, and are shaping new processes and skills. We’re on the right path.”