Usage of information system for discovering tax evasion: Case study of Croatia
This paper explores what data sources should be used for discovering tax evasion with the usage of information system and how the results should be disseminated on the case of Croatian taxpaying scheme. Information systems are very efficient in discovering tax evasion. Although there is wealth of decision support methods (e.g. data mining, on line analytical processing, reporting) for discovering tax evasion, they are not yet used in practice to enough extent. The reason is poor organization of the usage of decision support systems. If usage of information systems is organized more efficiently in terms of better dissemination of the results, more tax evasions would be discovered. The paper explores two issues on the case of Croatian taxpaying scheme. First, it defines what data from the tax information system should be used for discovering tax evasion. Second, it defines the role of the 'data manager' that should sustain fluent cooperation between clerks and information system specialists and more efficient dissemination of the results. We propose a prototype organization of information system for Croatian taxpaying scheme. Specific problems for the Croatian taxpaying scheme are explored, but the proposed system could be useful in other countries as well. In the time of financial crisis and economic depression tax payers have strong tendency toward tax evasion. Therefore, in such conditions it is even more important to have efficient tax collecting system.