Development of tax administration in the Russian Federation in the context of digital transformation

Mitin Dmitry Alekseevich ORCID: 0000-0002-7639-8794 PhD in Economics Teacher of the Department of Taxes and Tax Administration, Financial University under the Government of the Russian Federation 15 Verkhnyaya Maslovka str., Moscow, 127083, Russia mitin.fns@gmail.com Other publications by this author

Introduction

The rapid development and introduction of digital technologies in recent years has significantly changed the appearance of key sectors of the state's economy and the social sphere ^[1]. Every year, an increasing number of companies are striving to introduce digital solutions into their production process, thereby trying to increase its efficiency.

New types of entrepreneurial activities are emerging and rapidly developing, including: e-commerce, blogging, mining, IT development (including in the field of artificial intelligence), robotics, provision of cloud services and others. A global barrier-free digital market of goods (products) and services is being formed in which those companies that are able to process and analyze a large amount of data have a competitive advantage.

According to a study conducted by the Institute for Statistical Research and Economics of Knowledge of the Higher School of Economics, published in October 2023 ^[2], the main trends in digital business transformation, which are used by about 30% of the total number of large and medium-sized organizations, are technologies that allow collecting and processing big data, as well as various cloud services.

The detailed result of the analysis is shown in Figure No. 1.

Figure No. 1. The use of digital technologies by large and medium-sized organizations (as a percentage of the total number of organizations).

Source: compiled by the author on the basis of ^[2]

As can be seen from the above data, the share of companies using digital technologies, including cloud services, is increasing. This trend is due to the following factors:

- reducing the cost of developing your own digital infrastructure;

- high data security;

- the ability to gain competitive advantages through big data analysis;

- reduction of production costs by automating processes;

- increase in production volumes by reducing the production cycle;

- access to information at any time and from any place;

- improving the effectiveness of management decisions by obtaining accurate and systematic information;

- other (depending on the specifics of the company's activities).

In addition, the financial market is also changing, new means of payment are emerging: cryptocurrencies and various digital financial assets.

According to TrendingView services, as of May 1, 2024, the capitalization of the cryptocurrency market amounted to 2.2 trillion US dollars^[3].

The described process of introducing digital technologies is called Digital Transformation. If we define this process in more detail, then digital transformation is understood as the process of introducing digital technologies by an organization, accompanied by optimization of the control system of the main technological processes ^[4].

The public sector is also not on the sidelines. More and more government agencies are introducing digital solutions into the management process. Specialized computing centers for data processing are being created, as well as electronic services for interacting with citizens, and artificial intelligence technology is beginning to be actively used.

At the same time, many Russian and foreign authors also speak about the associated risks of digital transformation, for example ^[5]:

- the risk of unemployment;

- the risk of worsening socio-economic inequality;

- the risk of information security breaches.

At the same time, the authors studying the issues of digital transformation and the digital economy do not single out such a significant risk as the digital divide that arises in the case of disproportionate development of digital technologies in the state.

The accompanying legal risks should also be highlighted. Legislation in States, as a rule, was formed to regulate traditional types of economic activity. In turn, with the development of digital technologies, innovative products and new types of activities have actually become a "gray" zone from the point of view of legislation.

In addition, due to the digital transformation, the model of interaction between the seller and the buyer has changed significantly, many processes take place in the digital space, which complicates the control of these operations by tax and other authorized state bodies. In particular, due to the imperfection of tax legislation and the inefficiency of traditional approaches to tax administration in relation to digital business, states began to lose significant amounts of tax revenue. The Russian Federation also faced similar problems.

In this regard, at the first stage of this study, it seems important to analyze the proposals of the Organization for Economic Cooperation and Development for the development of tax administration in the context of digital transformation as a leading international organization dealing with taxation issues in order to identify areas that can be used to improve the Russian model of tax administration.

At the second stage of the study, the approaches used by the Russian Federation in the framework of the digital transformation of tax administration will be considered and the points that, in the author's opinion, do not allow realizing the full potential of the digital ecosystem of the Federal Tax Service of Russia will be highlighted.

In turn, at the third stage, the author's main proposals for the development of tax administration in the Russian Federation will be highlighted, which are of practical importance and are the scientific novelty of this study.

Analysis of the OECD proposals on the digital transformation of tax administration

For the stable development of the economy of a modern state in the context of digital transformation, the current model of tax administration in the state plays an important role.

It is generally recognized that in order to create a modern and effective model of tax administration, a comprehensive transformation of tax authorities is necessary.

In the modern world, it is important that the current model of tax administration in the state be digitalized and allow tax control not only over traditional types of business activities, but also activities carried out in the digital space.

In 2020, within the framework of the annual international forum on tax administration, OECD experts developed a concept for the digital transformation of tax administration ^[6], within which they identified key areas that should be implemented within the framework of the tax administration model of the future. The key ones will be discussed next.

1. Digital identification of taxpayers. Qualitative identification of taxpayers is one of the key criteria of modern tax administration, which makes it possible to initiate and subsequently regulate administrative processes conducted in relation to taxpayers ^[7].

Currently, in international practice, digital identification of individuals and legal entities is used in various spheres of life, for example, during international flights, the biometric data of a passenger is scanned to identify him and view his dossier (it does not matter in which country the passenger provided his biometric data).

According to OECD experts, the established digital identification system should provide:

- assigning to each taxpayer an identification number (for example, TIN), which, together with other mandatory elements inherent in certain types of documents, such as date of birth, place and date of registration (for individuals) and legal address (for organizations), serves as a digital identifier of taxpayers in tax relations;

- access to digital services and taxpayer data from any territory using digital identification;

- digital identification of taxpayers at the international level, provided that confidentiality and security of data transmission are ensured.

Subsequently, it is assumed that the digital identification system will allow using the same account (digital identification) to gain access to various government services, including non-tax ones.

Thus, OECD experts express the opinion that within the framework of the digital transformation of tax administration, as well as the general digital transformation of public administration, it is important to create a unique digital profile of each taxpayer, which can be used to access all public services, and will also be available to all authorized bodies.

In addition, it is advisable to create digital profiles of taxpayers that will be available not only in the state at the place of its registration, but also in other partner states, for example, for states participating in economic integration associations.

2. Improving the model of interaction between taxpayers and tax authorities. Constant interaction with the taxpayer is the basis of a modern tax administration system. Interaction with taxpayers can be carried out in various ways, ranging from telephone calls, electronic services and ending with business management systems. Such an approach to building a tax administration model helps to more effectively resolve tax disputes between taxpayers and tax authorities at the stage of their occurrence, and also contributes to increasing the level of tax culture and trust in tax authorities.

According to OECD experts, the main criteria for the implementation of this provision are:

- the availability of a website of the tax administration or a mobile application offering a combined set of electronic services (electronic filing of tax returns, electronic payments, etc.);

- the functioning of taxpayer support on tax issues through secure communication channels (due to the fact that information classified as classified or representing a tax or corporate secret is often required for support) through call centers or web chats.

The next step towards improving the interaction between tax authorities and taxpayers, according to OECD experts, is the integration of artificial intelligence algorithms that allow automated data processing and help taxpayers choose certain solutions, depending on the circumstances.

3. Ensuring the availability of information necessary for tax administration. In the modern world, information is one of the most important tools for tax administration purposes. At its core, tax administration is a data processing process, based on the results of which a management decision is made.

As a result of digitalization, tax authorities receive a large amount of tax information (for example, information from electronic invoices, data from cash registers).

According to OECD experts, when implementing tax administration, tax authorities should not only accumulate information coming from various sources and post it on various services, but also process it using their resources and transfer information processed for tax purposes to taxpayers (for example, process information received from cash registers and inform the taxpayer information about the tax obligations that have arisen).

4. Services for clarifying tax rules. Currently, this process is usually carried out directly with the help of tax administrations and includes the following:

- clarifications on tax compliance and tax payment deadlines (through various channels, including websites, direct communications, tax agents, etc.);

- the use of standardized forms and electronic forms of documents that require the taxpayer to enter specific information that can be used for registration purposes, filing a tax return, etc.;

- automatic completion of the relevant process, for example: registration of a taxpayer, calculation of the final tax liability, acceptance of payments, etc.).

For the development of this area, OECD experts propose to provide technical solutions so that this process takes place in a natural environment for the taxpayer (accounting programs, mobile applications, etc.).

As an example of the implementation of this proposal, Spain can be cited, which has developed and implemented a "Virtual assistant" based on artificial intelligence (chatbot) with which taxpayers can get the necessary advice on calculating and paying VAT to the budget.

5. Development of new skill sets and technical solutions. The global trend in the development of tax administration is that tax authorities are becoming more customer-oriented. At the same time, a significant proportion of tax officials still continue to deal with audit issues, debt management functions, taxpayer support and registration, as well as processing tax returns and payments.

In turn, for the purposes of developing tax administration, according to OECD experts, tax inspectors of the future should have the following skills:

- convert tax rules into instructions that can be included in various accounting systems used by taxpayers and the tax authorities' own systems;

- to carry out expertise and settings of tax and accounting systems.

In addition, according to the OECD, it is advisable to expand the staff of the following specialists in the tax authorities:

- communication managers needed to maintain and implement new tax processes;

- negotiators and psychologists who are able to identify approaches to communication and reaching agreements with taxpayers;

- cybersecurity and data protection specialists.

6. Transformation of the management structure. The effectiveness of tax administration depends on political, cultural, social and technological factors. In addition, in modern conditions, it is necessary to expand cooperation between tax administrations and businesses in matters of tax administration.

This interaction can take place in various directions:

- Formal consultative processes;

- mechanisms for protecting the rights of taxpayers;

- tax simplification services;

- joint software products aimed at increasing compliance with the requirements of tax legislation by taxpayers, as well as increasing the transparency of the tax system.

OECD experts identify the following areas of transformation of the management structure of tax relations:

- creation of a management structure bringing together representatives of the public and private sectors, including at the international level, to ensure a high level of compliance with legislation and a minimum burden on business from the tax authorities;

- achieving a balance between the control function and other aspects of tax administration, including: data protection, security, accessibility of information and its reliability;

- coordination of key areas of joint work between business and tax authorities and provision of high-quality resources necessary to maintain this work;

- ensuring the flexibility and sustainability of tax administration to changes in business processes and the economy as a whole;

- provision of mutual guarantees of security and data protection by all participants of the system.

Thus, as the main directions of digital transformation of tax administration, OECD experts highlight the need to reorient tax authorities from control work to a combined approach, primarily aimed at creating a client-centered model of tax administration, based on specialized digital services that create comfortable conditions for taxpayers to fulfill their tax obligations.

At the same time, OECD experts do not point to such an important parameter necessary for the digital transformation of tax administration as the need to ensure the overall digital maturity of the state.

For example, let's turn to the level of digital maturity of the member states of the Eurasian Economic Union, of which the Russian Federation is a member.

Figure 2 shows the digital maturity index of the EAEU member states, according to the World Bank estimates, compared with the ranking leader South Korea (the maximum index value is 1).

Figure No. 2. The Digital Maturity Index of the EAEU Member States

 Source: compiled by the author on the basis of ^[8].

As can be seen from the data shown in Figure 2, currently the level of Internet and digital technology penetration in states is not high enough. Such a situation can lead to a digital divide, which will create the opposite effect: as a result of significant digitalization of tax authorities and the state apparatus, a number of taxpayers who do not have the skills to use new technologies will not be able to faithfully fulfill their tax obligations. In addition, they will not have access to the developed digital services, which will reduce their positive effect.

Also, for the digital transformation of tax administration, it is necessary to develop electronic document management (hereinafter referred to as EDI) between tax authorities and taxpayers (B2G segment), as well as between taxpayers (B2B segment).

Without the development of EDI, it is impossible to qualitatively improve the level of tax administration and form a digital model of tax administration, since paper documents cannot be processed and analyzed automatically.

For example, we can refer to the analysis of EDI in the transport industry of the Russian Federation ^[9]. According to the results obtained in 2023, this figure was 1%. As a result, a significant amount of data required for tax administration cannot be processed automatically by digital systems of tax authorities, which reduces the quality of tax administration and does not allow automating the process.

Digital transformation of tax administration in the Russian Federation

If we look at the process of transformation of the tax administration model taking place in the Russian Federation, we can see that an approach similar to the one proposed by the OECD is being used. Including:

- the model of interaction with taxpayers is developing;

- digital profiles of taxpayers are being created, which can be used to access various public services (Public services);

- various tax services are being introduced to facilitate taxpayers' fulfillment of their tax obligations;

- the structure of tax legal relations management is changing, business is actively involved in the process, with which joint solutions are being developed;

- there is a retraining of employees of tax authorities, including for the possibility of using digital solutions of the Federal Tax Service of Russia.

Starting in 2021, representatives of the Federal Tax Service of Russia began to talk about switching to a client-centered management model ^[10].

According to the Strategic Map of the Federal Tax Service of Russia, the main directions of its activities are ^[11]:

- ensuring compliance with the legislation on taxes and fees;

- creation of comfortable conditions for taxpayers to fulfill their tax obligations;

- reduction of administrative burden and simplification of procedures, development of an open dialogue with business and society;

- strengthening and improving human resources;

- optimization of the activities of tax authorities, taking into account the cost effectiveness of its implementation.

The first three points of the Strategy are implemented, among other things, by developing and developing existing services of the Federal Tax Service of Russia aimed at simplifying the procedure for paying taxes by taxpayers, as well as minimizing the risks of making methodological mistakes.

According to the report on the activities of the Federal Tax Service of Russia for 2023 ^[12], 70 services are presented in the specialized section of the website of the Federal Tax Service of Russia, which was visited 176.5 million times. Information about the most popular services of the Federal Tax Service of Russia is shown in Table 1.

Table 1. Information on the use of the services of the Federal Tax Service of Russia in 2023

Source: compiled by the author on the basis of ^[12].

It should also be noted that the Federal Tax Service of Russia is actively introducing innovative services, for example, the "Chatbot of the Federal Tax Service of Russia", which allows taxpayers to receive clarification on issues of interest, without direct interaction with the tax inspector. According to the above-mentioned report, the Chatbot of the Federal Tax Service of Russia answered 3.3 million user questions in 2023.

Also, based on law enforcement practice, it can be concluded that the client-centricity of tax authorities is expressed in the development of a control and analytical function aimed at reducing the number of tax audits (Figure No. 3) and preventing a tax dispute by settling it at the pre-trial stage (Figure No. 4).

Figure No. 3. Dynamics of indicators of on-site tax audits conducted in the Russian Federation for the period 2019-2023.

Source: compiled by the author on the basis of reports of the 2nd Tax Code of the Federal Tax Service of Russia.

As can be seen from the data presented in Figure 3, the number of tax audits was significantly reduced in 2023 compared to 2019. At the same time, the growth trend in the number of on-site tax audits for the period 2020-2022 is associated with the Covid-19 pandemic and current restrictions at the beginning of the analyzed period.

Figure No. 4. Dynamics of tax disputes considered by the courts of first instance in the Russian Federation for the period 2017-2022.

Source: compiled by the author on the basis of ^[13]

The above statistics demonstrate a reduction in the number of disputes between taxpayers and tax authorities, which indicates the effectiveness of work on their pre-trial settlement. In addition, the number of claims being satisfied is decreasing, which also indirectly indicates the effectiveness of the work of tax authorities in this direction, since the number of justified objections of taxpayers to the actions of tax authorities is actually decreasing.

The noted result in the form of reducing tax audits and improving the quality of services provided was achieved primarily due to the digitalization of tax administration, namely the development of an appropriate digital analytical system, called AIS "Tax-3" ^[14].

This system is a unified information system of the Federal Tax Service of Russia, which provides automation of the activities of the Federal Tax Service of Russia for all functions defined by the Regulation on the Federal Tax Service, approved by Decree of the Government of the Russian Federation dated 30.09.2004 No. 506, including reception, processing, provision of data and analysis of information, formation of information resources of tax authorities, statistical data, information necessary to provide support for managerial decision-making in the sphere of authority of the Federal Tax Service of Russia and the provision of information to external consumers^[15].

As a result of the introduction of this information system, the tax authorities have become one of the main aggregates of information on various aspects of the financial and economic life of taxpayers, as well as other information received by the Federal Tax Service of Russia (for example, the registry Office registry Office).

Let's look at some of the systems operating on the basis of AIS "Tax-3".

The most well-known subsystem of AIS "Tax-3" is the Automated control system "VAT-2" (ASK VAT-2), based on a mirror comparison of books of purchases and sales of declarations of counterparties. In addition, the system automatically allows you to determine the risk level of each of the tax returns, as well as, if signs of an illegal tax avoidance scheme are detected, determine the intended beneficiary.

This system revolutionized VAT administration in the Russian Federation and allowed the tax authorities to significantly improve the quality of control over the payment of this tax by taxpayers, which led to a significant increase in VAT revenues to the budget (Figure No. 5).

Figure No. 5. Dynamics of VAT receipts to the budget of the Russian Federation for the period 2015-2023

Source: compiled by the author on the basis of data from the report of the 1st Federal Tax Service of Russia.

In addition, an important achievement from the introduction of the VAT-2 Automated Control System was a change in the business model of taxpayers, including a reduction in tax avoidance schemes used by them, as evidenced by such an indicator as "The share of VAT discrepancies in the total amount of VAT tax deductions (Figure No. 6). This result was made possible thanks to automated control over all transactions reflected in taxpayers' tax returns and increased overall transparency of their financial and economic activities. As a result, the likelihood of unscrupulous taxpayers concealing dubious transactions has significantly decreased, which has led to the need to conduct business within the legal framework.

Figure No. 6. Dynamics of VAT discrepancies in the total amount of VAT tax deductions for the period 2015-2023.

Compiled by the author on the basis of data from the analytical port of the Federal Tax Service of Russia

Another digital solution that has allowed tax authorities to improve the quality of tax administration and bring business out of the shadows without conducting tax audits is the online cash register system and the KKT control system developed on their basis. This system allows tax authorities to receive real-time information about cash register equipment and process it automatically for tax administration purposes.

The introduction of online sales registers has made it possible to achieve a positive effect not only for tax authorities, but also for taxpayers and buyers. These advantages are reflected in table 3.

Table 3. Advantages of using online sales registers

Table 3 is compiled by the author on the basis of ^[16]

Digitalization of tax administration in the Russian Federation is accompanied, among other things, by the introduction of digital automated tax systems, among which:

- tax on professional income;

- automated simplified taxation system.

The development of a model of tax administration for professional income tax payers was the first step towards the formation of a new approach to tax administration, in which the calculation of tax liabilities is automated by the tax authority ^[17].

This special tax regime applies to entrepreneurs who do not use hired labor and meet other criteria established by law. Its important features are: ease of use and registration, minimal reporting, automatic tax calculation based on data provided by the taxpayer.

As of February 2024, more than 9.7 million taxpayers were registered as payers of professional income tax, who paid a tax of 62.5 billion rubles to the budget in 2023 ^[18].

It is important to note that a significant part of them had not previously been registered as taxpayers and did not pay taxes. At the same time, thanks to the creation of comfortable conditions for doing business and paying taxes, these entrepreneurs "came out of the shadows" and began to bring income to the budget.

One of the important conditions for automating the process of calculating tax liabilities was the EDI between tax authorities and the taxpayer, which was implemented through a specialized application with standardized formats of accounting documents.

The further development of this approach was the introduction of an automated simplified taxation system.

This taxation system also allows the taxpayer to refuse to calculate his tax obligations, this obligation is imposed on the tax authority.

In addition, the advantage of this tax system is the almost complete rejection of tax reporting. It became possible to achieve such an effect due to the combination of tax (CCT) and banking systems. Thus, the approach proposed by the OECD to involve third-party participants in tax legal relations in the tax administration process is being implemented. This approach is also confirmed by the document approved by the Ministry of Finance "The main directions of budget, tax and customs tariff policy for 2023 and for the planning period 2024 and 2025", according to which it is proposed to involve intermediaries in the process of tax administration in the form of electronic digital platforms (Marketplaces) engaged in electronic trade in goods on the territory of the EAEU ^[19].

Thus, the Russian Federation is actively implementing a digital client-centric model of tax administration, in the future aimed at significantly automating the tax payment process, including by involving businesses in this process ^[20] Already, the digitalization of tax administration has strengthened the role of the state in the economic regulation of tax relations and increased tax discipline ^[21].

The correctness of the chosen course of development is indirectly evidenced by such an indicator as "The level of satisfaction of citizens with the quality of public services provided by the Federal Tax Service of Russia." The dynamics of this indicator for the period 2018-2023 is shown in table 4.

Table 4. The level of satisfaction of citizens with the quality of public services provided by the Federal Tax Service of Russia

Source: Compiled by the author on the basis of reports on the work of the Federal Tax Service of Russia for the specified period.

Despite the prevailing positive effect of the digital transformation of tax administration, it is important to pay attention to the negative effects, among them:

- additional expenses of taxpayers for the purchase and implementation of digital solutions of the Federal Tax Service of Russia (for example, cash registers);

- reduction in the number of tax authorities and, as a result, the risk of increased unemployment due to the automation of a number of processes;

- decrease in the competence of tax inspectors due to the fact that a significant number of processes are implemented by automated systems;

- incorrect operation of information systems, which leads to unreasonable demands on taxpayers.

Proposals for the development of tax administration in the Russian Federation

1. Development of electronic document management.

As noted earlier, one of the most important areas for improving tax administration is the development of EDI in various segments of financial and economic activity:

- Exchange of information in electronic form between authorized bodies (G2G segment, including international);

- Electronic document flow between taxpayers and tax authorities (B2G segment);

- Electronic document flow between counterparties (B2B segment).

It is important to note that many authors studying the development of tax administration highlight the development of EDI as one of the key areas, but focus only on the development of electronic interaction between taxpayers and tax authorities (B2G segment) ^[22]. At the same time, it is clear that without the development of electronic document management between counterparties (B2B segment), the tax authorities will not be able to create a transparent tax environment and automate a number of processes related to the calculation and payment of taxes.

Table 3 provides information from the Federal State Statistics Service on the share of organizations in the Russian Federation using EDI.

Table 5. The share of Russian organizations using EDI for the period 2018-2023

Source: compiled by the author on the basis of data ^[23]

The data shown in table 5 demonstrate that the share of Russian organizations that have implemented EDI in their production activities remains at a fairly low level.

For the purposes of tax administration, this fact indicates the inability to automate a number of processes related to tax control (especially in terms of direct taxes).

Possible ways to encourage taxpayers to switch to EDI are:

- presentation of tax benefits (for example, the use of an increased coefficient when accounting for expenses related to EDI for the purposes of calculating corporate income tax);

- the ability to refund VAT on an application basis;

- simplification of the procedure for confirming the 0% VAT rate for exports;

- development of free EDO services of the Federal Tax Service of Russia;

- an agitation campaign.

At the same time, in order to achieve maximum effect, it seems advisable to use an integrated approach and use all of these approaches. In turn, the loss of income from the presentation of tax benefits to taxpayers who have switched to EDI can be compensated by improving the quality of tax administration.

In addition, the transition to a fully electronic document management can be carried out in stages, depending on the level of digitalization of the economic sector.

In particular, for the purposes of tax administration, it is advisable to unify the forms and formats of primary documents used by taxpayers.

In the future, it is advisable to consider the possibility of developing a specialized service that allows you to integrate automated systems of tax authorities and taxpayer accounting systems, which will allow you to identify risks in real time and level them before the tax audit stage. To encourage taxpayers to use this service, it is advisable to make it free.

2. The introduction of Blockchain technology and related innovative products.

Blockchain is a technology that organizes a database consisting of a chain of blocks designed according to certain rules. Each cell of the block contains information about the previous cell. This technology is based on the principle of decentralization, that is, the database is not located in one place, but in all computers of the system participants that form the network. Thus, the blocks cannot be replaced or hacked, since all computers will have to be hacked to do this ^[24].

Currently, blockchain technology is widely used in world practice for tax administration purposes. Next, let's look at the best practices of using blockchain for tax administration purposes.

1) The Brazilian Federal Tax Administration has implemented a blockchain-based system called "bCPF" for the exchange of data from the Register of Taxpayers/Individuals (CPF) between tax and regulatory agencies at three levels of government (federal, regional and local (municipal). The next step is to implement a blockchain-based Register of Legal Entities (bCNPJ) for the same purposes. These projects use an authorized blockchain based on verifiable open source software, in which only authorized institutions can participate ^[25].

2) In China, electronic invoicing using blockchain has been introduced in Beijing. Its goal is to provide greater transparency for taxpayers, reduce operating costs, save social resources, increase convenience for consumers and thereby create a fair tax environment ^[26].

3) The Thai Tax Agency is implementing a blockchain for VAT refund ^[27].

4) Abu Dhabi-based Etisalat has launched a blockchain-based platform designed to prevent fraud against commercial accounts ^[28]

There are suggestions on other ways to use blockchains in tax administration. For example, the European Union is considering the possibility of developing a specialized cryptocurrency to reduce VAT fraud in intra-union transactions. Blockchain can eliminate many of the system's shortcomings by creating a digital invoice registry that will allow tax authorities across Europe to view and verify taxes paid when a product changes hands ^[29].

In addition, some countries have not yet implemented blockchain technology in the tax administration process, but are doing the appropriate work.:

- The Finnish tax authorities have started working with banks on a blockchain system for tracking taxes on real estate transactions;

- in Sweden, the blockchain is being tested for digitization of receipts, non-resident income tax and customs duties;

- Estonia has transferred a number of government services to the blockchain system, including banking, healthcare and business document management;

- The startup Summitto, headquartered in the Netherlands, is working on a blockchain-based accounting system that tax administrations could use to combat illegal VAT schemes ^[30].

Currently, the Federal Tax Service of Russia is developing a digital distributed registry platform. The main objective of this platform is to create a single trusted environment for government departments and financial organizations – the Federal Tax Service, the Ministry of Economic Development, VEB.The Russian Federation, EDI operators, banks and others for the quick and flexible implementation of any joint projects initiated by the Federal Tax Service. As part of the development of this platform, the service "Unified Blockchain Repository of Machine-readable Powers of Attorney (MCHD) - distributed registry of the Federal Tax Service of Russia" has already been launched ^[31].

Thus, the potential of blockchain technology for tax administration purposes is great.

As can be seen from the above global practices of using blockchain technology in the framework of tax administration, one of the areas of potential use is the exchange of information both within the country and internationally, for example, within the framework of the EAEU. At the same time, a possible implementation scheme is the use of the Eurasian Economic Commission as an intermediary in the transfer of this information between the member states (the principle of a trusted third party)

Blockchain can also potentially be used as part of transfer pricing. This system can make the pricing process more transparent for tax authorities, as well as automate the process of transferring information about controlled transactions to tax authorities, thereby significantly reducing the administrative burden on taxpayers ^[32]. The implementation of this initiative is possible through the use of specially programmed smart contracts.

Smart contracts are decentralized, anonymous, blockchain–encoded agreements between counterparties. If configured correctly, the system can verify the validity of the transaction(s) and identify questionable ones. In the context of transfer pricing, smart contracts can be used to automate the transfer of information to the tax authority on the methodology for determining the price of a transaction to assess its market nature.

In addition, smart contracts can be used to automate the VAT collection process ^[33]. This process can be implemented by introducing into the smart contract a condition for the automatic calculation of VAT tax liabilities, reserving the corresponding amounts of funds in the buyer's account and transferring them to the budget after the transaction is completed. In turn, if the conditions for submitting the right to a VAT deduction are met, the recommended amount can be automatically entered into the seller's accounting system as part of the preliminary automated filling out of the tax return.

3. Integration of automated information systems in integration associations.

Due to the digital transformation, business processes have become global in nature, and foreign trade turnover has begun to develop rapidly. Even small businesses that do not have sufficient resources to independently carry out international trade have the opportunity to export their product using electronic digital platforms (marketplaces).

At the same time, there was also a negative effect, expressed in non-compliance by foreign suppliers with local legislation, especially representatives of small businesses who do not have sufficient resources and competencies to ensure compliance with tax legislation in all countries of presence.

In addition, due to differences in the tax legislation of the States in which cross-border trade is carried out, the risks of double taxation have also increased. The Russian Federation also faced similar problems.

According to the results of the analysis of scientific literature on the development of tax administration in the Russian Federation, it was found that a number of authors pay attention to the importance of developing the services of the Federal Tax Service of Russia in order to improve the quality of tax administration ^[34].

At the same time, taking into account globalization, in order to minimize the noted risks and improve the quality of tax administration, it seems advisable to develop and implement multilateral digital solutions that will function, for example, on the territory of entire integration associations.

The Russian Federation is a member of one of such integration associations – the Eurasian Economic Union, which unites five countries: the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation ^[35].

The development of such multi-faceted digital solutions for tax administration purposes can have a direct positive effect on the quality of tax administration of Russian taxpayers engaged in foreign trade activities, as it ensures the formation of a more transparent environment.

One of the possible directions for the development of tax administration in the territory of the EAEU is the creation of a common system for monitoring the turnover of goods.

The prerequisites for the implementation of such a system are already available. These include the availability of traceability systems for goods; labeling of goods; navigation seals.

It should be noted that despite the significant potential of the mentioned systems contributing to the development of tax administration, their functionality is limited in the current state.

For example, the purpose of creating a traceability system for goods within the EAEU is to exchange information between tax authorities on the movement of foreign goods within the Union.

This system consists of two segments:

- the external traceability segment, which provides the exchange of information on the border crossing between the EAEU member states of the traceable goods;

- the national traceability segment, which ensures the traceability of imported goods in the domestic market of the EAEU member States.

If we consider the national segment of traceability, then its effect extends to a different list of goods determined by the EAEU member state.

In turn, the external traceability segment currently applies only to household refrigerators and freezers imported into the territory of the EAEU.

The list of labeled goods is currently much larger, but it is also different in the EAEU member states, which does not allow creating a single information space.

The potential of the navigation seal system is also great for tax administration purposes, but the system itself is not currently put into commercial operation.

In order to unlock the potential of these systems, it is necessary to expand and harmonize lists and technological solutions for traceable and labeled goods, primarily at national levels, with a view to their subsequent application on the external circuit.

Another important area of development of tax administration in the territory of the EAEU, which can be implemented in the short term, is the integration of services of the tax services of the member states by standardizing the interface, integrating databases and mutual recognition of accounts.

The existing services of the EAEU member States are systematized and reflected in Table 6 for the purposes of their subsequent harmonization.

Table 6. Services of the tax authorities of the EAEU Member States, which should be harmonized

Source: compiled by the author.

Let us draw attention to the fact that one of the priority directions of the development of tax administration is the automation of the calculation of tax liabilities of taxpayers. Such services will reduce the administrative burden on taxpayers, reduce their costs and will help to increase the level of compliance with tax legislation and thereby increase tax revenues and fees to the budgets of the EAEU member states.

At the supranational level, it is advisable to consider the possibility of creating a Eurasian blockchain platform that will store information on the movement of goods coming from various sources, including reflecting the facts of the movement of goods across the territory of the Union and the payment of indirect taxes by participants in foreign economic transactions.

To automate the process of confirming the zero VAT rate in the exporting country, it is advisable to develop smart contract technology.

To implement this initiative, it may be necessary to create a specialized digital document exchange service between counterparties based on the EAEU digital platform being developed, as well as a register of taxpayers engaged in mutual trade on the territory of the Union.

The proposed model for confirming the zero VAT rate and payment of tax on exports to the territory of the EAEU is shown in Figure No. 7.

Figure No. 7. Scheme of automated confirmation of the zero VAT rate for exports to the territory of the EAEU using smart contracts

Source: compiled by the author

Description:

1. The seller (exporter) forms a smart contract using a specialized section of the EAEU digital platform in the personal account of an authorized participant in foreign economic activity:

- enters information about the buyer (importer), selecting data from information about taxpayers of the EAEU member states posted on the EAEU digital platform;

- enters data on the parameters and terms of the transaction;

- generates an electronic invoice (required for tax deduction);

- signs the generated EDS document.

2. The generated smart contract and the invoice in encrypted form appear in the personal account of the buyer (importer). The smart contract automatically calculates the amount of VAT payable in the buyer's member state.

3. The buyer (importer) checks the terms of the smart contract and signs its EDS. After that, the smart contract is considered concluded. (a possible condition is the automatic reservation of funds in the buyer's account by a smart contract). When the moment of payment for the transaction arrives, the buyer makes an appropriate mark in the smart contract.

4. The smart contract sends an automated order to the buyer's bank to transfer funds under the transaction to the seller's bank, as well as the corresponding order to transfer the amount of VAT to the budget of the buyer's member state.

5. This information is automatically transmitted to the EAEU digital platform. When VAT is received by means of a smart contract to the budget of the buyer's member state, this information is transmitted to the tax authority of the seller's member state. At the same time, it is advisable to provide that the right to reflect a transaction with a zero VAT rate in the seller's tax return arises at the time of receipt of funds to his current account, since a smart contract guarantees that all its parameters will be fulfilled.

A comparative analysis of the proposed model for confirming the zero VAT rate for exports to the EAEU member States and the current one is carried out in Table No. 7.

Table No. 7. Comparative analysis of models for confirming the zero VAT rate when exporting goods to the EAEU member States using an Application for the import of goods and payment of indirect taxes and using a smart contract

Source: compiled by the author

Thus, in addition to automating the VAT collection process, the smart contract allows you to eliminate the dependence between the exporter and the importer in terms of confirming the zero VAT rate and thereby minimize risks, reduce the administrative burden on both taxpayers and tax authorities, as well as provide a more transparent business environment.

Conclusion:

The analysis shows an irreversible process of digital transformation of the public and private sectors of the economy. In the context of tax administration, in order to counter the challenges of the digital economy, it is advisable to develop and implement advanced technologies and form a digital ecosystem of tax administration. Already, the tax administration model used in the Russian Federation has undergone significant transformations, including a changed approach to interacting with taxpayers, and a client-centric model has begun to be used. The customer-centric model of tax administration is based on various services offered by the Federal Tax Service to simplify the tax payment procedure, including through partial automation of the process. The approach used brings tangible results in the form of a systematic increase in tax revenues to the budget, as well as the level of satisfaction of taxpayers with the activities of tax authorities.

An analysis of the global practice of tax administration development has shown that the basis of the tax administration model of the future may be blockchain technology, as well as its accompanying innovative products, including smart contracts. In addition, an important direction for the development of tax administration in a globalized economy is the use of multilateral digital solutions, primarily within the framework of economic integration associations, since such an approach will create a more transparent environment and indirectly contribute to the development of mutual trade.

At the same time, there are certain difficulties for the further development of tax administration, including those expressed in the insufficient level of electronic document flow between taxpayers (B2B segment). This fact makes it impossible to automate the process of calculating the tax base and the amount of tax payable (primarily in relation to corporate income tax). In addition, it is important to increase the overall level of digitalization of the state in order to prevent the digital divide.

Taking into account the highlighted areas of development, the study makes practical recommendations for the development of tax administration, which can be implemented in the Russian Federation, as well as within the framework of the EAEU.

In turn, as part of further research on this topic, it is advisable to explore the possibility of using artificial intelligence in the framework of tax administration, as well as using a platform model of tax administration within integration associations.