Posted by Duncan Cleary
The IMF’s senior management recognizes the potential value of Big Data and Analytics for its work. In late 2015, the IMF hosted a symposium on Big Data, and following this event the Managing Director, Christine Lagarde, sponsored the Big Data Innovation Challenge, where she urged staff to ‘step out of your comfort zone and propose bold new ideas’. The challenge saw 109 entries from across 16 departments. There were ten finalists chosen by a panel of internal and external experts. Of these finalists, six were awarded seed money. A proposal from the IMF’s Fiscal Affairs Department (FAD) was placed fifth, with the title ‘Applying Analytics for Better Tax and Customs Administration’. This proposal laid out in broad terms how applying analytics can assist tax and customs administrations in improving their performance across a range of business areas, but with a focus on risk management.
FAD, through its Revenue Administration Divisions, provides technical assistance to many countries on a regular basis. The objective is for these countries to achieve systems of tax and customs administration that are sustainable, fair, and efficient. How can making better use of available data assist in achieving this goal, and what role can FAD play? The proposal from the Big Data Innovation Challenge seeks to develop a methodology that combines both in-country field work and headquarters-based analysis of micro-level tax and customs data. Tax and customs administrations are often holders of large quantities of micro level data, their ‘Big Data’, at the taxpayer/ trader level, and at the transactional level.