GovInnovate Brief

How Estonia developed the world’s most efficient tax filing system

Posted by GovInnovate Team on 23-Nov-2015 10:54:33


 Estonia’s tax system was labeled by Business Insider as “scarily efficient”, but why? Over the past 15 years, the Estonian Government has improved efficiencies within the online submission process, making it possible for people with two or three incomes to submit their online tax in under five minutes. We spoke with Katrin Reinhold, Director of Information System, Information System Authority – Republic of Estonia, about the ways the Estonian Government have revolutionised their online tax submission process


Efficiencies within the online submission process have proven to be the result of continual improvement with the streamlining of processes. When online tax submissions were first introduced in 2000, only 10% of Estonians saw the benefits in this new initiative. By 2013, 95% of Estonians were able to submit their taxes online with a minimal amount of clicks. The below post outlines our journey in creating one of the worlds most efficient tax processes.

The journey to five clicks: how we did it

Because the initial uptake of the online tax system was so low, we had to create efficiencies that would encourage more than 10% of the population to use the service. In 2003, we started to pre-fill tax returns for clients with data from income and expenses of the recipients. Secure ID’s were generated for each client, and the document can be signed using a digital signature to ensure clients don’t require printing facilities to complete.

That same year we supplemented a service standard that included a promise to return overpaid income tax to clients who submitted their tax return via e-Tax/e-Customs within five working days. As a result, the number of clients who submitted their income tax returns electronically increased almost three times during the period of 2002 to 2004 (to 59%).

This process was refined further in 2007 as it was possible to then reduce the amount of clicks needed to complete the form to five, while also introducing mobile options. Today it’s possible to complete tax submissions simply by confirming the declaration with one single click.


Where to now?

Although we have been dubbed as having a ‘scarily efficient’ tax system, there are always ways to improve the system more. Our goal is to develop a no-touch tax return in which a client will receive a notification of their refund automatically.


About the author:


Katrin will be delivering an International Keynote Address at GovInnovate 2015 titled “Delivering excellence in digital government – Why Estonia is one of the world’s most advanced digital countries”. You can find out more about GovInnovate by checking out the agenda.




Topics: eGovernment, Online Tax Filing, eTax, Estonian Digital Transformation, e-Customs

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