I made a callout on social media for first-hand accounts from friends abroad regarding my story this week about return-free filing—where a government’s tax agency populates tax forms with information it already has for its citizens. I wanted to know whether they used (and liked) such a system.
My friend Maria says that Hong Kong’s eTax system takes her 15 minutes to do her taxes every year, and its “very user friendly and service-oriented” nature made it appealing:
The form does not use complicated terminology and the website is very helpful in explaining how to fill out the form and explaining terms to people who might not have the accounting or financial experience…The information in the pre-filled online form is very straight-forward, and you can easily edit it if changes are needed, so yes, I would trust the government to provide this service since I retain the control and can review and edit before submitting the final form.
I was particularly interested in the issue of trust, since that’s one of the arguments against having return-free filing in the U.S. (Would Americans even trust the government to do their taxes? Or would they view it as a conflict of interest?) But for my friends abroad, it seems that a combination of factors made return-free filing worth it for them: a simpler tax code, time saved, and ease. From Vincent in Singapore:
Most of the large buckets (e.g. salaried income and increasingly income on commission, and other certain deductions/exemptions e.g. to retirement/social security, or for serving in the military) are already directly input by employers electronically to IRAS (the Singapore equivalent of the IRS) and “auto-included” in the tax form. Singapore's personal income tax filing really isn’t as complex as it is in the U.S., and most folks already know what they can deduct or exempt since it’s pretty simple and clear.
But the most important factor it seemed, was the perception that things work in their country. This seems to be the crucial element in trusting one’s government to do their taxes. From a Swedish-American friend:
In terms of trusting government, I think this is a very very interesting question that goes way beyond this particular matter of technical taxation systems. My feeling is that I generally trust the Swedish government to do its job, and I think many of my fellow Swedes feel similarly trusting of their government. Americans feel the opposite about the government here—that it can’t be trusted to do anything right. I'm not talking about motive here, just basic competence. Obviously the reasons for this are multitudinous and complicated…In Sweden, faith in government efficiency has generally been high, which has led to a willingness to go on financing it, which has enabled it to respond to those expectations.
Have you had a bad time with return-free filing? I’d like to hear about any problems or concerns we haven’t considered, or unintended consequences. Drop me a note at firstname.lastname@example.org.