Tax System Problems Result in CHF 1.8bn Shortfall

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Many demands for tax payments were not sent out (Keystone)

The Federal Tax Administration’s IT project Insieme was a financial disaster and its replacement isn’t much better, according to the Swiss Federal Audit Office (SFAO). Systems are unreliable and underperforming, with billions in tax demands still outstanding.

The old application for direct federal tax, withholding tax and stamp duty was replaced in October 2017 by the new system DIFAS, which still had many shortcomings that could not be resolved by the end of the year, the SFAO wrote in a reportexternal link published on Wednesday.

It noted, for example, that opening a document could take up to 20 seconds, that there was a lack of filter options and that the refund check did not run automatically. Such obstacles resulted in employees processing around only a third of the usual number of forms in the first few months after the changeover.

One of the main problems, however, was that neither reminders nor invoices for interest could be sent. At the time of the SFAO audit in spring 2018, some 2,500 overdue payment requests totalling around CHF1.8 billion ($1.8 billion) were outstanding. The tax administrationexternal link claims this amount has now fallen by around two-thirds.

The SFAO said a certain decline in productivity after the introduction of a new system was unavoidable, but not to the extent that was found in the tax administration. It is unclear whether the departments have returned to their previous levels of productivity, it added.