Tax chief urged to address department’s “digital immaturity”

Jersey is lagging well behind the rest of the world in moving tax returns online – with the Island’s “digital immaturity” costing the public purse many thousands and increasing the risk of fraud, the Island’s spending watchdog has warned.

Globally, around nine in 10 tax returns are submitted online, but in Jersey that figure stands at just over half, according to Comptroller and Auditor General Lynn Pamment.

The finding came in her latest report, published this morning, which focuses on the work of Revenue Jersey, the Island’s independent collector of taxes.

Overall, she finds that it is doing a good job but recommends that its targets for online filing be raised.

“The percentage of personal taxpayers filing online in Jersey is low at 54% when compared to other jurisdictions. A 2024 survey by the OECD shows that the global average is over 90%. Many other jurisdictions, including smaller ones, have mandated online personal tax filing as well as corporate tax,” the report observes.

“Evidence shows that online filing can reduce costs as well as increasing yields and reducing the risk of fraud and error. Despite current filing rates, the Revenue Jersey target remains at 50%, which… is not challenging for Revenue Jersey and conflicts with its published aspiration,” she added.

Ms Pamment’s report also referred to figures previously uncovered by Express under the Freedom of Information Law, which showed that taxpayers had to foot a quarter-of-a-million-pound bill for Revenue Jersey posting letters and cheques back to them last year.

The latest C&AG report said: “Revenue Jersey also relies on postal communication with taxpayers for much of its business including making refunds by cheque. The cost of processing postal communication associated with the tax and social security base of £1,597m is over £250,000 each year.”

The news drew some surprise from Digital Jersey chief executive Tony Moretta at the time, who said many other organisations had resolved this.

However, Treasury confirmed to Express in May that it will begin trialling electronic repayments as the default option later this year – initially limited to businesses.

In her concluding remarks, Ms Pamment was clear that greater tech adoption within the Island’s tax office could not come soon enough.

“Where there are areas of inefficiency, these are understood but progress to improve and deliver greater efficiencies is slow due to constraints on resources and capacity. There is evidence that Revenue Jersey is inefficient due to digital immaturity which increases cost and increases risk,” her report said.

However, it also concluded that there have been “significant improvements” in the way Revenue Jersey gets taxpayers to comply, noting: “Since 2022, it is estimated that additional revenue generated is over £225m with £95m of this being cash banked in each year following compliance interventions related to prior years of assessment.”