Implementing Consolidated Balance Sheet for Accurate Taxpayer Accounting

Enhancing Tax Administration with Consolidated Balance Sheet Analytics

Industry:  Government Tax Administration

Headquarters: Eastern Europe

Coverage: National Client

Background

An Eastern European Tax Office, responsible for overseeing more than 12 million taxpayer entities, manages tax collection across multiple regions with 6,500 employees in 168 locations. Dealing with 30 years of legacy data stored in siloed systems, the office faced inefficiencies, manual cross-system tasks, and challenges in connecting or collaborating effectively with disparate tax systems.

Business Challenge

The tax office operated a distributed system across 168 municipalities, each with independent record systems for various tax types, leading to autonomy in defining registers, accounting details, and interest calculation methods. This heterogeneity made consolidation nearly impossible, with issues including recognizing daily changes across instances, low data quality resulting in potential data inaccuracies, hardware limitations, and the risk of performance drops from high-frequency access by internal users and external taxpayers via an internet portal.

Additional challenges involved capturing and collecting all necessary business context information, consolidating back-dated transactions into turnover, and providing accurate, comprehensive views of taxpayer accounts and liabilities at analytical, synthetic, and account levels, including interest calculations.

mLogica’s Approach

mLogica delivered the CAP*M Consolidated Balance Sheet solution as part of a data warehouse modernization initiative, focusing on integration, consolidation, calculation, insights, and presentation layers. The implementation included:

Capturing and collecting all tax transactions from accounting systems on a daily basis, alongside business context information such as taxpayer properties, accounting details, and fiscal data.
Consolidating collected transactions into turnover within the available business context, handling back-dated entries effectively.
Calculating and materializing taxpayer account balances on specific dates, with interest calculations performed as non-materialized lists on request or materialized at fiscal year-end or upon account changes.
Enabling business context enrichment for reporting and information sharing, including producing and publishing debtors lists required by law or other government agencies.
Presenting balance sheets at various levels of detail for human users via parameterized reports and interactive interfaces, or for software consumers through stored procedures.
Conducting reverse engineering and analysis of existing database structures and applications, business analysis of data warehouse entities and rules, user requirements specification, and design of a conceptual and physical data warehouse structure.
Implementing ETL mappings and transformations from all source structures to the unified data warehouse, introducing multiple levels of data quality governance to ensure data integrity and availability for checks and corrections, all while accommodating data growth and enabling incremental changes.

This approach ensured a stable source of historical information for analytics, without disrupting existing operations.

Strategic Outcome

The deployment resulted in a unified data warehouse that consolidated all data sources, providing a comprehensive, accurate view of taxpayer accounts and liabilities at all levels, with efficient interest calculations scalable to any size taxpayer base.

Key achievements included:

Successful consolidation of heterogeneous systems, enabling unique interest calculation methods and accurate balance.

Improved data quality and governance, reducing the risk of inaccuracies and ensuring reliable consolidated reports.

Creation of preconditions for improved tax revenue control, measurement, and overall business governance through.

Enhanced accessibility for all tax office employees and taxpayers via an external internet portal, supporting high-frequency requests without performance degradation.

The Power Behind a Seamless Implementation

mLogica’s expertise in advanced analytics, data warehousing, and integration solutions powered by CAP*M enabled the Eastern European Tax Office to overcome legacy system challenges and achieve a consolidated, accurate taxpayer accounting framework. This collaboration not only streamlined operations and improved data quality but also provided a scalable platform for ongoing analytics, evolutionary improvements, and long-term objectives such as equal taxpayer treatment, optimized audit focus, and enhanced voluntary compliance.