How big data can influence the Income-tax filing process
The term big data has been doing the rounds quite often these days. That is solely because of the endless amount of potential it holds. Big data is, quite commonly, associated with the internet. It basically is extremely large sets of data that may be analyzed by advanced computing to uncover patterns and trends that would otherwise go unnoticed.
Established companies like the search engine Google, which is synonymous with the internet, use big data wherein they create a link between the user and the provider using certain keywords which are typed in during the search. Other companies like Netflix and social media giant Facebook also use big data technology for their functioning.
But, the point we are getting at is, how could big data influence tax filing?
Big data may seem to have varied applications across various sectors, but does it have what it takes to gel with the economic sector?
The answer is a distinctive yes.
The last few years evince of our reliance on technology for primarily everything. This everything also includes paying our taxes. To aid this, there has been the evident digitization of the national taxing account systems. Owing to this, people can now file their returns electronically, as opposed to earlier where they had to physically present themselves to the Income tax office and do it.
How does big data ease the difficult industry of taxation?
One of the key aspects of big data is something called Predictive Analysis. This basically is detecting a pattern in the large pool of data and determining the most probable outcomes, which naturally is predictive in nature. Tax experts have already dipped their hands in understanding how this works and checking out how predictive analysis helps in tax collection and compliance enforcement.
Compliance enforcement earlier was a time-consuming process as it would require investigations that focus on the individual’s tax records, or an organization’s records to check out for inconsistencies, payment delays or the criminally acknowledged tax avoidance.
Big data’s contribution in reshaping taxing methods
Big data is not just about the scale of information that is being managed but, also how it is being managed. High-end machinery and advanced computing that can power complex algorithms is a mandate for effective results. Data scientists, who are experts at working with big data, make sure that the right questions are asked and the right data is interpreted so that the system is accurate. This is because taxation is a matter of money and the slightest of errors could lead to disastrous consequences. Though the margin of error in this is minimal, it is still there and hence experts worldwide are striving to eradicate every error that may arise in the merger of big data and taxation processes.
The simple benefit in the incorporation of big data with taxation is that it will leave more things for the computer to do, instead of human workforce bending over their systems crunching numbers day in and out. This also leads to human errors, right?
Big data and the benefits it brings along are many and are influencing multiple industries all over the globe. Why should taxation miss out on all the ease then? The government is increasingly finding newer ways to enable the incorporation of this technology into the taxation system, and looking at the progress so far, it does not seem like a long way down. The future of taxation is here.