Digital Innovation in Public Finance in South America

Posted by Katherine Baer and Gerardo Uña[1]  

A seminar on Digital Innovation in Public Finance was organized by the IMF’s Fiscal Affairs Department and the Inter-American Development Bank (IDB), with the support of the Ministry of Finance of Peru and the Peruvian Tax Agency (SUNAT). The seminar took place in Lima, Peru on September 26-27.

The event covered topics relating to digital innovation in tax policy, tax administration, and public financial management (PFM). It provided an opportunity for senior tax and budget/treasury officials from most of the South American countries (Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and Uruguay) to share their recent experiences in introducing digital innovations. An opening session highlighted some of the main themes of the FAD publication Digital Revolutions in Public Finance and set the stage for further discussions.[2]  Participants from other countries, including the U.S. Internal Revenue Service, the Mexican tax administration, and the French Treasury also discussed their experiences.

Some of the seminar’s highlights were as follows:

To summarize, most South American countries have embarked on an ambitious path of digital and technological transformation in the fiscal area. The newly adopted IT systems—and digital innovations—are often sophisticated and potentially useful. A main challenge in the medium term is ensuring that the significant resources that countries are investing in new technologies, training staff, reorganizing structures, and generating large volumes of data, result in improved tax compliance, lower costs of compliance and administration, and more efficient and effective public expenditure.

[1] Katherine Baer is Assistant Director in FAD and Gerardo Uña is Senior Economist in FAD.

[2] Sanjeev Gupta, Senior Fellow at the Center for Global Development and former Deputy Director in FAD, delivered a keynote speech on digital innovation and its implication for the public finances from a broader international perspective.

[3] Aqib Aslam (FAD).

[4] Florian Misch (FAD).

[5] This topic was discussed in panel presented by Carlos Pimenta (IDB) and Gerardo Uña (FAD).

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