Caring about the taxpayer’s customer experience? Unimaginable under the European monarchies. Today, it is a goal for the Luxembourg Inland Revenue (Administration des contributions directes, ACD). It’s not an obvious objective--not to say unnatural... Which is something that director Jean-Paul Olinger agrees with. His ambition is “to transform the payment of tax--a task often perceived as painful and tedious--into a pleasant moment, based on the principles of predictability and reducing the administrative burden.”

How? First, by encouraging monthly payments based on the subscription model, which acts a bit like an anaesthetic... “We’re not there yet, but that’s the path we'd like to take.” The other way is to increase the level of service. Whilst the ACD is an administrative body, it is also “a very service-oriented organisation,” explains Olinger. “Our teams do an impressive job, but we need to do much better if we are to become one of the best tax administrations in Europe. We want ACD to stand for ‘accessible, comprehensible and digital.’”

How? By increasing the use of technology. Since his appointment in February 2024 by the Frieden government with the mission of modernising this strategic administration, Olinger and his teams have had time to fine-tune their modus operandi. “We have five ambitions: to provide quality customer service; to ensure a fair and efficient tax system; to attract and retain the best talent; to develop an inspiring work culture; and to equip ourselves with a future-proof IT system.”

Target: 85% of returns pre-filled

First concrete element: the launch on 7 April of 123 easy.lu, an electronic assistant that helps taxpayers complete their tax returns online. “In just three weeks, 10,000 tax returns were completed and sent to the authorities.” Olinger is delighted with this figure. He hopes that this momentum will help to make online filing the norm. In 2023, only 9.4% of tax returns were completed using the MyGuichet electronic assistant. The director of the ACD hopes that the figure will reach 85% by 2028.

To encourage people to take the plunge, developing the use of pre-filled data from reliable sources would make the process simpler and quicker. The problem is that in Luxembourg, pre-filling--and therefore obtaining the right data--requires taxpayers’ consent. “For example, the tax authorities only receive data from banks and insurance companies if taxpayers have agreed to share information about their personal income. We believe that this voluntary approach gives taxpayers a sense of freedom, security and--ultimately--more satisfaction.”

The issue of consent

There is no question, however, of calling the principle of consent into question. Automatically collecting and harvesting financial data in real time from banks, employers and investment platforms to pre-calculate taxes without any manual input, proactively suggesting personalised optimisations such as deductions or credits based on taxpayers’ objectives and behaviour, instantly detecting anomalies and resolving them directly with the relevant authorities, all without taxpayer intervention: a dream or a nightmare? It’s an open question. And without an answer, it would be unwise to go back on the principle of consent.

The intelligent hunt for fraudsters

But to make progress on the digitisation of returns and confidence in the data, the ACD is going to use artificial intelligence. “We are currently developing an AI chatbot that will help citizens with all their tax questions. We are currently in the proof of concept phase. We will also be using predictive AI to improve our forecasts and statistical models. And of course, we will be using AI to detect non-compliance and tax fraud. Taxpayer satisfaction is increased if we know that no one can cheat the system.”

Latest announcement: the migration of the ACD to a new central IT system. “We are testing a future-proof tax IT solution to create a seamless end-to-end journey for taxpayers and tax agents. Taxpayers and tax agents will share the same interfaces, but with different access rights.”

“Today, tax is a staggered process. In the future, the process will be real-time, invisible and fully integrated into the flow of everyday life and business,” concludes Olinger. “Maximising taxpayer satisfaction is our goal, even if taxpayer satisfaction is probably a never-ending quest.”

This article was originally published in French.