Digital Delays Cost Jersey Tax Department Millions, Auditor Warns

Jersey's tax department is operating inefficiently because of outdated digital systems, leading to higher costs and increased risks, according to a new report by the Comptroller and Auditor General.

The review found that Revenue Jersey's lack of digital maturity has slowed progress in modernising its services, despite improvements in tax enforcement and compliance.

Over the past three years, the department has secured more than £200 million in additional tax revenue through compliance activity, while a further £100 million was collected from taxpayers settling liabilities from previous years.

The report praised Revenue Jersey for strengthening its enforcement processes, describing them as significantly improved. It also highlighted the department's well-documented procedures and noted that its published performance data was more transparent than that of comparable tax authorities reviewed during the audit.

Comptroller and Auditor General Lynn Pamment said efforts to encourage more Islanders to submit tax returns online had been hampered by limited resources and capacity.

Currently, just 54% of tax returns are filed online, compared with around 90% in many comparable jurisdictions. The report said greater use of digital filing could reduce administrative costs, improve tax collection and lower the risk of fraud and errors.

Despite this, Revenue Jersey's current target remains for only half of all tax returns to be submitted electronically.

The audit acknowledged that the department is investing heavily in modernising its systems, including introducing independent taxation and implementing the international Pillar Two corporate tax framework.

It also recognised that Revenue Jersey produces a broad range of performance data to monitor its effectiveness as it continues its programme of reform.