A software architect by profession I am currently working on Architecture of one of the most complex and largest Indirect tax systems of the world. This system has been running successfully from the past two years and continuously evolving. Architecting , a technical solution for large scale, complex and highly available system is quite challenging . I along with my team have been able to solve most of these challenges to a large extent. But despite all these technical leaps, I observed still Tax payers do not find Tax compliance or Process of compliance easy and they are not happy with tax compliance process.
This prompted me to think why people like Services and Portal/App of OLA/UBER/Amazon/Flipkart etc., where they spend a lot money and seldom crib about their Portal/App, Services and Processes. On the other hand, Portal/App developed on similar technologies by tax department does not evoke the same sentiments from tax payers. It was quite perplexing to understand, why same customer behaves differently on almost two similar applications.
After attending a few conferences and discussions with some of these application designers and product teams on “Design Thinking”, “Customer Centric Design”, I uncovered the resounding theme was to be more empathic towards customer needs. It is not only the immediate need like buying a product or tax compliance but the journey of a customer including, ``Why this product is needed?’’, ``Who are the primary customers (Millennial/Generation Z/Female/ Male etc.)?”, ``Which channel (Mobile/Desktop/Physical)will they prefer to buy it?’’, Shopping Experience, Fulfillment experience and further post-delivery experience to encourage user to use this product more.
For example, UBER team has graciously made cab hiring easy and ubiquitous. A person may hire a cab from a location, where he might have gone for the first time and does not know its exact location, so they have provided a feature to auto detect location using GPS service of phone. This app. also provides an option to store the home location for quick booking. Similarly, the app. provides a feature to share travel location for parents and family members who want to track the movement of their near and dear ones while they are travelling in a hired taxi. This app. also asks for feedback from both the customer and the driver to upgrade their services. So this App considerately takes good care of all phases of the customer’s journey : first at the time of hiring of the service, during the service and at last post service. It also repays your money if you complain about a disappointment or a bad service without asking a question.
Now the question is ,how the teams developing such apps could think of all such aspects and design these great applications, what kind of skill set or process do they follow. While discussing more with the experts and attending sessions of senior leadership of these teams, I came to know that these successful companies has a large pool of resources of social science and design skills professionals ,along with top notch technical talents and while designing/developing any application, they give equal or rather more weightage to human behavioral aspects than technology. They work on complete customer journey and work on building trust of customer by creating simple processes and user interfaces. They also regularly keep on improving system by incorporating feedback of customers.
With above background I think, we can also transform our Tax Systems a lot. There are lot of similarities between these companies and Tax Departments as both are in service of users and collecting service charges. Tax systems should be also modeled treating Tax payer as a customer and Tax department as a service provider. This requires a fundamental change in approach i.e. moving from Tax Administration to Tax collection service and making system on the principal of trust. We have to map Tax payer journey completely right from Tax collection by him/her to depositing this money to government and further taking refunds. It will require changes in lot of processes and paradigm shift in looking at tax payers but I believe it will make this process so Tax payer friendly that they will love it.
To give a glimpse of such changes, I have tried to map some of Tax System processes with above mentioned companies processes as below:
1. One of the main features of such application is ubiquitous availability and accessibility. Application should be accessible easily round the clock through an online portal, Mobile App. App should be available on all the leading play stores for installation.
2. Registration process should so easy that you can register quickly in few steps and initially only very important information should be collected. Other information should be collected as Tax payer start using application. Interconnection with other system should be done so that User get most of the things pre-filled. All these App/portal provide two step registration process.
3. All leading customer application attract users by providing some discount or facilities based on usage and credit score. Same model can be applied by Tax system where some incentive can be built in system to incentivize usage like no assessment for on time filers, quick bank loans, reduce rate of interest etc. Incentive management can be built at backend using AI/Analytics and it should be integral part of Application not an afterthought.
4. To build trust all leading customer facing application keeps rules of refund very simple and non-ambiguous based on policy that customer is right, which builds tremendous trust among customer. Off course these companies track customer behavior and catch black sheep among customers but genuine customer always gets hearing and issues get resolved in defined times. This is a big shift and current tax system lack this feature, rules are too cumbersome, customer care has no powers and there is no defined time for resolution of one’s problem. Once a Taxpayer is stuck, he goes in to a spin. That is the main reason why Tax payer always trust a third person for using Tax Systems.
Above is the area where tax department also need to transform and set up a Tax payer facilitation department like customer service in all above application with powers to resolve tax payers issue in time bound manner with empathy. American Express customer care could be one of the best example of this setup.
5. Another important feature of these application is proactive customer facilitation. For example, whenever a customer leaves their application without buying anything after selecting some products, they go back to customer to check the reason. They track failure rates, abandon carts etc. Similar services could be provided to Taxpayer while he/she is facing issues in returns filing, during making payments by tracking customer journey and proactively helping him/her. System can also use BI to know pattern of distress among a section of Tax payers by looking at sector specific defaults and alerts policy maker, so that proactive help can be extended to Tax payer. This will go a long way in winning trust to Taxpayers. Current system is too much reactive.
6. All above applications also have robust backend operation like finance management, customer engagement, product development, delivery management, warehouse management etc. They put equivalent focus on these backend functions. Similarly, every Tax system should have a robust backend system to track Tax payer payments, Tax payer grievances, Tax payer compliances, Tax payer profile and ability to levy penalty or concession. This is really important to provide efficient services to Tax payers.
To summarize, Tax system development should not be seen as a process of mapping compliance forms and rule in to the system but to go beyond that. We should understand journey of a Tax payer right from preparing data for compliance to compliance and further post compliance. We need to create a cross functional team having Social Scientist, Behavior Analyst, Tax domain expert from industry and government, Policy maker, Tax payer representatives, Technology Analyst and Designers, Technical Architects. This team will help in mapping the journey of Taxpayer and development of processes, which are simple and intuitive, then designer and Technology team will come with intuitive technical solutions. These solutions should be then tested on various user groups and then fine-tuned before roll out. Some of these processes are getting followed in current system development also but missing thing is synthetization of these efforts and empathy towards tax payers.
