Transcript Presentation on Tax Decision Support Systems & Data

Decision Support System
& Data Mining
Methodologies
FTA Conference
Atar Singh Tomar
[email protected]
7 July 2015
Tata Infotech Ltd. Proprietary
Outline
Why a Tax Decision Support System (DSS)?
Tax DSS Architecture
Tax DSS Methodology
Tax Decision Support System
Business Benefits
Concluding Thoughts
Q & A Session
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Mainframes
Operational
Systems
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Online Analytical
Systems
3
ACTION
Business
Need
Prediction
Forecast
WHY
WHAT
Complexity
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
Readily access and analyze the tax information

Effectively and accurately identify the area of noncompliance

Better understand the taxpayers

Formulate better legislative policies

Achieve higher degree of accuracy in revenue forecast

Optimize the operational cost
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 Compare the revenue collected and balance due for the past 5 years
by Business Type
Evaluate the effectiveness of audit programs in identifying
non-filers and
by Tax Type
under reporters
by Tax Period by tax period
by Location by location
by its distribution
thetype
various
byacross
business
Trends in the collected and due amounts in the various
Payment
Plans
at
income groups of the taxpayers
various stages and defaulters
by the payment plan type
by the tax period
by the income group
Evaluate the effectiveness of external data in identifying
non-filers
by
by the
tax type
showing the number of such taxpayers
Evaluate the productivity of various departments in
the years
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by tax period
by locationcases
handling
by business type
over
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
Designed for real-time data entry and editing

Data maintained is constantly changing

Limited historical data is available for on-line comparisons

Running Decision Support queries degrades the performance of
the Transactional Application

Difficulty in making ad-hoc queries

Complexity in achieving Comparisons, Aggregations,
Rankings, Running totals etc.
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Decision Support System is a computer based
information system designed to facilitate the
decision making process of semi structured tasks
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Metadata
Repository
Indv. / Corp.
Tax App.
Source
Un-employment
Tax App.
Withholding
Tax App.
A/R
System
Internal Data
Sources
“A Data Warehouse is a
subject-oriented,
integrated,
Data Validation
time variant and
non-volatile
Data Migration
collection of data in support of
Data
Scrubbing
management’s
decision-making process.”
Transformation Sequence
Tax
Data
Data
A Data-Mart
contains a subset of the data
T Transformation
X
Y
Warehouse
T
available in an enterprise-wide data warehouse.LAN
Data
Table of Contents
Origin of Data
Extraction,Title Page
=
AA
4
Data
8
ScrubbingBB
A
T is X
Data
Data
Mining
CC Meta
12 Cube
Y
Warehouse
C
2Q96 and
AB
16
State’s Legacy and
Transactional
Mart
application
Discovering meaningful new correlations,
BA
20
3Q96
Transformation
4Q96
 Patterns and trends
Income
1Q97
2Q97
IRS’s different tapes
Meta Cube
B
Using
 Pattern recognition technologies,
Tax and mathematical
Withholding
 Statistical
techniques
Access Levels
Compliance
 IMF
 IRTF
Refresh Processing
info
 BMF Analytical
On-Line
(OLAP)
Insurance Time Line of Journey
External
12
 BRTF
Sources Is a process to assist decision making by using tools to facilitate the analysis
Other State Agency's
9
3
of multi-dimensionally
 Payroll Systemstructured business information.
External Data
Data
Warehouse
Collected Tax Revenue
 Transportation System
6
Sources
• North
 General Services
• Withholding
=
East
West
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North
WAN
Internet
OLAP tools
EIS
Query & Reporting
Statistical Analysis
Data Mining
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Structured Interviews
Decision Support Analysis
Decision Analysis
Scoping of Prototype
Data Analysis
Project Evaluation Criteria
Technical Analysis
Detailed Design
Conceptual DSS Orientation
System Construction
Plans & Prioritization
Testing
Functional Orientation
Demonstration
DSS Software Evaluation & Selection
Operational Training
Evaluation
Deployment
Prototype Development
Maintenance
Operational Deployment and Support
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These Subject Areas can be viewed w.r.t to
various common perspectives
 Taxpayer Profiling
 Tax Collection
 Business Type
 Location (States, City)
 Taxpayer (Demographic)
 Tax Type
 Tax Period (Year, Quarter, Months)
 Time (Year, Months, Events, Seasons)
 Fraud Detection & Tax Non-compliance
 Legislative Change Impact
 Revenue Forecasting
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Provides comprehensive taxpayer information
Identification of potential fraudulent taxpayers
Compliant taxpayer can be relaxed from
cumbersome audit process
Provide better taxpayer services
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Analyze the trends in tax revenue for revenue
enhancement
Evaluate uncollected tax revenue
Reallocate resources to value added programs
Enhance A/R management
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Maximize the non-compliance discoveries
Analyze trends and patterns of targeted groups
of taxpayers
Rank potential audit suspects by evaluating
their revenue potential
Focus on collection and compliance efforts
Substantial increase in tax assessments and long
term reduction in tax gap
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Leverage the accuracy, efficiency,and productivity
of non-compliance programs
Provide an alert mechanism to trap non-filers
before expiry of the statute limit
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 Determine the effects of changes in
legislation, policies and regulations
 Estimate fiscal and administrative
impacts of proposed legislative changes
 Support users in formulating tax policy
 Analyze the revenue effect of proposed
and enacted legislative changes
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 Ability to formulate reasonable fiscal policies
 Incorporate the historical revenue trends and other governing
estimate variables
 Provide the highest degree of accuracy in revenue forecasting
 Use of econometric models to improve the accuracy of
forecasts
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Tangible Benefits
 Improvement in non-compliance will increase tax revenue
 More cost effective decisions are enabled
 Better business intelligence is enabled
 Enhanced taxpayer Services
Intangible Benefits
 Improved productivity
 Reduced redundant processing and support
 Ability to focus on business processes through complete analysis
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
Tax DSS holds great potential for dramatic business benefits

Capitalizes on the potential value of the organization’s
information

Provide decision makers access to consistent, reliable and
timely data

Still much more to explore and enhance
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Understand DSS Technology
Tax DSS
Methodology
Superior
Solution
Expertise in the
Area
Large pool
of resources
Make Things Happen
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