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Digitization of public finances

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Digitization of public finances Empty Digitization of public finances

Post by claud39 on Sun Jun 02, 2019 7:32 am

Digitization of public finances

June 02, 2019

Digitization of public finances Article-155946083219403

» Policy Briefing on" Digitizing Public Finance "... Click here to view


Department of Statistics and Research

M / A "Policy Brief" addresses the "digitization of public finances"

 The Arab Monetary Fund launched a new periodic research series entitled "Policy Brief", aimed at supporting the process of making

Resolution in the Arab countries by providing brief research publications that address the most important priorities and issues

Interest for member countries is accompanied by policy making recommendations. Which focuses on digitizing public finances,

In this regard, we would like to state the following:

We would like to illustrate the following factors that reinforce the importance of the shift towards digitizing public finances:

Studies indicate that the shift to electronic payment and collection on both sides of the budget is achieving

In developing countries.

Savings estimated at $ 320 billion annually

- Taxation has led to a 50% increase in India's tax base in less than a year.

- The digitization of value added tax systems in some countries has contributed to the increase in tax revenues

Up to 20.%

- The use of large data technology increases the efficiency of indirect tax collection and helps

To combat tax evasion.

- There are promising opportunities for Arab economies to benefit from digitizing public finances to increase efficiency

Public Finance.

- Public finance digitization has enabled governments to increase the efficiency of social transfer systems and raise efficiency and transparency

Public procurement systems.

- The digitization of public finances helps to build detailed, timely and short-term periodic databases that reinforce

Economic and financial planning.

- Arab governments are keen to shift towards digitizing public finances within the framework of their national plans

For digital transformation and financial reform.

- The existence of national visions of electronic transformation, strategies for financial inclusion and electronic systems of identity

For the successful digitization of finances.

- Protecting the confidentiality and privacy of data and supporting cybersecurity is key to reducing risks

Potential for digitalization of public finances.

Digitization of public finances: economic gains

1. Digitalization of public finances addresses many aspects, including digital transformation at the side management level

The general budget (general revenues and expenditures), especially through the adoption of collection and payment systems

E-mail. On the public revenue side, digitization has helped many countries

Increasing tax collection levels and broadening the tax base through regime transformation

Electronic payment, tax compliance, collection and e-billing. While digitizing contributed

Public expenditure in increasing the efficiency of government procurement systems and combating corruption and improving the efficiency of systems

Social transfers through the creation of more accurate databases for those eligible for support,

And channeling cash transfers to them through e-payment channels in an easy, secure and verifiable way

Such as mobile phones using a biometric footprint signature, thereby enabling governments to

Access to a broad base of beneficiaries at the lowest cost.

2. The digitization of public finances is linked to the adoption of the latest technical systems in relation to other related aspects

Including financial information management system (GFMIS) and a management system

Debt and financial analysis and other systems that have helped to increase levels of transparency and comprehensiveness

And the accuracy of the state budget processes.

3. Helps achieve annual economic savings of at least 8.0 to 1.1%

Gross domestic product (GDP) in developing countries is between $ 220 billion and $ 320 billion.

4. The digitization of public spending can contribute to the creation of more accurate databases for those eligible for access

On government support and channeling cash transfers to them through easily accessible channels such as telephones

Portable and biometric footprint thus enabling governments to access a broad base of

Beneficiaries at the lowest cost.

5. Public financial and fiscal management systems have facilitated the process of building detailed databases

(Daily), which helps to achieve two important advantages

Efficiency of the state budget processes, including the ministries of finance from comprehensive statistics on

Daily government transactions including tax receipts, wage payments and debt issuance

2 - Use these information bases as a good tool for economic and financial planning in the medium term

By facilitating the assessment of the expected impact of financial policies on the behavior of economic actors

Levels of tax compliance and the impact of any planned macro policies on the variables involved

On both sides of revenue and expenditure.

Digitization of public finances: some global experiences

- The United Kingdom, Australia and Russia collect taxes on income and corporations

Through electronic payroll systems and e-billing. Where the UK was able to

Address tax evasion through digital solutions as the British Customs Administration uses technology

Large data to detect fraudulent behavior of border importers, which contributed to an increase

The annual tariff is up to 1-2% of GDP. The transformation also helped
To increase the participation of SMEs in government procurement systems
Mexico by 20% in 2018 compared to 2017.

- In terms of digitization of public finances in developing countries, the government in China is able to review
Electronic billing systems and the use of blockbuster techniques to verify corporate compliance with the value tax

As well as combating tax evasion, while a pioneering experience of digitalization of public finance is available in India
In 2009, the government adopted the National Biometric Identification Project known as Aadhaar
The largest national identity project in the world with a total enrollment of 2.1 billion

Citizens 99% of India's population make up about 15% of the world's population. The system is based on 12 digits
Identity through an examination

And unique

With a biometric footprint that provides proof


Fingerprint or iris at service delivery points and associated with mobile phone number, although this system has
Was adopted in order to increase levels of financial coverage and increase the number of bank accounts - which increased by approx

240 million bank accounts in a few months of launching the system - but it has also enabled the government to
• Increasing the efficiency of social remittance systems and payment of pensions through this system
Payments of support programs, particularly support of food commodities directly to bank accounts receivable
Associated with biometric identification system anywhere in India, including where no branches are available
Bank or ATM machines via mobile phone. The system also enabled the Government to periodically revise
Of the beneficiaries of social transfers to prevent duplication or access to support for non-beneficiaries.
- The system is connected to more than one billion bank account and mobile phone, and transactions have been executed

The government has realized significant savings in the budget
The state budget has doubled its implementation cost, estimated to have saved the government about $ 10 billion

In 2017 and 2018, with a cost of US $ 3.1 billion. It is noted that
The development of e-payment systems in India has contributed significantly to the success of the experiment, as it has developed

In recent years, which is expected to reach the size of the e-payment market in India
$ 500 billion annually in 2020, which will enable the e-payment market to contribute
About 15% of GDP. It also contributed to the cooperation of all parties and the great political support
For the project in its success.

Digitization of Public Finance: Some Arab Experiences

- Arab governments have taken part in their national plans for digital transformation and their endeavors
Of fiscal reform to the shift towards digitization of public finances. Many Arab countries have achieved successes
Are concrete in this context. In Egypt, the shift towards digitization of public finances comes in the context of "strategy
Sustainable Development: Egypt Vision 2030 "and the National Economic Reform Program, which includes a package
Of fiscal reforms to modernize public finance management, improve resource mobilization, and enhance efficiency
The Ministry of Finance adopted a system for the dissemination of payment and collection
(GPC) and the Treasury System

(TSA) and GFMIS throughout the country. Accordingly
Dealing with government paper checks has been canceled to replace the new electronic payment system
Conversion of various payment orders executed by government accounting units directly to the accounts
Banking services to government clients and employees.

Policy implications

1 - The need for an integrated national vision of digital transformation in accordance with a gradual framework supportive of this transformation ensures
The participation of all concerned parties according to a clear timetable that takes into consideration the provision of requirements and structure
Support the comprehensive transformation at various levels and on which to build on
Digital transformation processes in different sectors according to the integration frameworks and specific roles of the stakeholders
Ensure the success of this transformation.

2. Financial inclusion is the basis for successful public digitization initiatives and is the basis for the success of digitization initiatives
Public finance based on the shift towards electronic payment and collection systems
Digital services require a supportive national vision to increase levels of financial coverage with focus
And to provide the necessary technologies to facilitate such access in order to benefit from
The government's approach to digitalization of public finances.

3. The need to focus on privacy protection, data confidentiality and cybersecurity support
The significant gains made in the digitization of public finances indicate the experiences of some countries
There are some risks associated with this transformation, especially with respect to violations
These systems have been violated and the privacy and confidentiality of registered data is violated.

4. Institutional, legal and human capacity constraints Digital transformation initiatives require efforts
Governmental capacities to support the institutional, legal and human resources capacities of ministries of finance
And the implementation units of the state budget on the one hand requires the process of digitization of public finance age of a package of
Laws regulating electronic payments and digitizing government purchases. Add to some
Institutional and organizational changes imposed by this type of transformation with emphasis on development
Human capacity in the ministries of finance and units of implementation of the budget.

Need to support the technical architecture Digital digitization initiatives have a supportive digital infrastructure
The most important of these is the widespread spread of communication technologies and information technologies, particularly proliferation

The use of mobile phones and access to the Internet is needed in a number of Arab countries to enhance levels
Citizens' access to digital infrastructure, especially in disadvantaged and remote areas, will help
Governments to make significant gains from the trend toward digitizing public finances.

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