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At the extreme regulatory constraints could deprive businesses of the opportunity to exploit the most economically efficient technology, stifling competition and even growth.
Tax authorities face the additional burden that their systems must work for every taxpayer in a stable and predictable fashion. As a matter of sheer practicality, tax systems cannot evolve constantly as businesses do. A single central authority will implement a single central system, which must balance the needs of every taxpayer and will by its nature change infrequently in discrete steps.
ACCA’s head of business and tax law, Jason Piper, says:
‘Businesses operate independently, and each will tailor its digital tools to match its own circumstances. The constant cycle of technological change means no two businesses will implement identical solutions. Tax authorities may see a benefit in imposing a standardised system which drags the least innovative business into the digital net.
‘However, there is a risk that enforcing these changes will in some cases do more harm than good if they compromise other businesses’ ability to explore all benefits offered by digital tools.’