Digitalisation meets public administration: the massive disruptive impact of the ‘zero cost of control’ phenomenon on business and society.
As business and society rapidly evolve they’re laying the foundation for the next stage of the digital transformation process: the digitalisation of public administrations. Assuming that public administrations will be reluctant to adopt digital technologies could prove costly. Government agencies that have already started to embrace new digital technologies are finding they have a whole new set of capabilities to better manage their scope of action, especially when it comes to control and compliance. Taxes are at the forefront of this development.
We believe that the digitalisation of public administrations will bring dramatic changes for business and society at large. We will witness what we call the Zero Cost of Control phenomenon: enormous and sudden growth in productivity within the public sector – at almost zero cost and with a strong tendency towards the centralisation of power. This change will set off an almost ‘natural’ development, which could lead to all-encompassing transparency. We’re already observing the first signs. Tax is a good example.
It’s time to wake up to the implications before the sleeping giant of a digitalised public administration awakes.
In our paper we argue that while this development will progress at different speeds across the globe, the overall impact will be huge for both business and wider society. Businesses are now entering a transitional phase and can expect a time of uncertainty that’s potentially full of surprises. Newly collected data and additional processing power will enable authorities to build a detailed picture of a company, its activities and value chain, dragging any regulatory inconsistencies into the open. We’re approaching another hidden inflection point where the future terms will be negotiated at short notice.
Digitalisation meets public administration: the disruptive impact of the Zero Cost of Control phenomenon on business and society is available in English.
Digitalisation meets tax authority: in a new white paper we explain why the corporate world should be preparing now for the imminent digitalisation of tax authorities. Companies will have to make extra efforts to get their tax capabilities quickly on the same data-driven level at which the authorities will be operating soon.
In this new world, your in-house tax function is going to need new capabilities to give management the same level of comfort on tax compliance and your interactions with the authorities. You’ll need to invest just to stand still.
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