Improving the administration of corporate income tax in Slovenia

The Commission is helping the Slovenian Financial Administration (SFA) improve its operational processes and procedures and build its capacity for strengthening tax compliance and countering tax evasion related to Corporate Income Tax (CIT).

Context 

The global social, health, financial and economic crisis has significantly increased the burden on public finances in Slovenia and is urging for immediate response by policy measures and reforms. The aim is to mitigate the economic and social impact of the coronavirus pandemic and make the economy and society in Slovenia more sustainable, resilient, and better prepared for the challenges and opportunities of the green and digital transitions.

In this context, the SFA requested support to improve the administration of the Corporate Income Tax (CIT) that is a significant element of national revenues and therefore an important factor for the sustainability of the public finances. The ultimate objective for the SFA is to design necessary operational policies and IT measures for strengthening tax compliance and countering tax evasion related to this tax.

Support delivered 

The technical support project provided the following main activities:

• Estimation of the CIT Gap and capacity building by introducing a methodology and a model for estimation of the CIT gap, performing a CIT estimation, analysing the results, and transferring knowledge to the team of the SFA on the model and the estimation process.
• Recommendations for improving quality of processes, identification of risks, organisational structure, and data sources (internal and external) for administration of the CIT.
• Recommendations for IT support for CIT risk identification – criteria, guidance for providing IT support, advanced methods to use (artificial intelligence: machine learning – predictive analytics).

Results achieved

The expected outcomes of this project are:

• Enhanced capabilities of the SFA to estimate and analyze the CIT gap.
• Improved CIT operational policies and procedures with the aim to reduce administrative burden for SFA and taxpayers.
• Strengthening the identification, assessment, ranking, and quantification of compliance risks associated to CIT through better use of data analytics.

More about the project

You can read the technical reports here: