Scotland to learn about tax from Baltic ‘digital government’

Cutting edge “digital identity” technology is being considered to administer devolved taxes in Scotland, it has emerged.

Cutting edge “digital identity” technology is being considered to administer devolved taxes in Scotland, it has emerged.

Research is being carried out by Scottish Government officials into the cutting-edge digital tax system used in Estonia.

The Baltic state is recognised as a global leader in digital government, with citizens able to access a huge range of public and private services including banking and health with a single digital identification code.

Rather than being held in a single database, private information is dispersed across a web of data ‘“pockets” encrypted using blockchain technology so it can only be accessed by the right authorities.

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The system allows Estonians to complete tax returns online in as little as three minutes. However, the Baltic state accepts that the ease and convenience of the system means citizens must accept the trade off of reduced privacy.

Estonia’s ambassador to the UK, Tiina Intelmann, begins a visit to Scotland today which is set to include meetings with Nicola Sturgeon and finance secretary Derek Mackay, as well as a symposium on digital health services at tech start-up hub Codebase.

“We are very open to sharing information about what we have done, but not every country is willing to use our models,” Ms Intelmann told The Scotsman. “That model requires a citizen to accept the loss of a certain amount of privacy, because everything is linked to a single source.

“Everything is cross-linked. Some people may not like that… That amount of openness may not be comfortable.”

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It is understood the research is being carried out at a Scottish Government level, rather than by the devolved tax authority, Revenue Scotland, which administers land and buildings transaction tax, landfill tax and air departure tax, but does not have responsibility for the new Scottish rate of income tax.

However, taxation isn’t the only part of Scotland’s public sector interested in Estonia’s experience of digital government. Officials are also understood to have been in touch with Estonian counterparts to find out more about the e-File scheme, which allows citizens to initiate and follow criminal and civil cases through the justice system.

The single digital record is only accessible by an individual and their lawyers, and can be updated with information by the police, prosecutors, the courts, and the prison service.

Ms Intelmann said Estonia, which won back its independence in 1991 after 51 years of Soviet rule, had to “start from scratch” when setting up its government and made an early decision to embrace technology and the internet when designing services.

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The country has established an e-Governance academy to share its expertise. “We have started approaching governments and saying, look, there is a way to do things more efficiently, but sometimes the reaction is lukewarm,” Ms Intelmann said.

“Then you understand that it’s not because you have come up with something weak, but because you have come up with something that is pretty strong, and that could change the fabric of a society.”

A Scottish Government spokeswoman said it engaged with governments around the world as part of its diplomatic outreach.