How did the State Revenue Service of Latvia become a regional leader in tax payments?

The challenge

Latvia’s State Revenue Service (SRS) has a vision to become one of the most efficient tax and customs administrations in Europe. By playing a leading role in serving the public interest, its mission is to be a reliable ally for transparent business and citizen welfare. Its tax payments system is crucial to realizing this ambition.

In 2020 alone, the total volume of tax payments to SRS was approximately EUR 10B and the organization is required to process some 200,000 financial transactions every day. However, the existing payments administration system was outdated. It was clunky, inefficient, and lacked a modern security architecture. Users had to deal with a complex and time-consuming process that put them at risk of non-compliance. Plus, running a system that was built more than 20 years ago was proving to be costly.

The legacy database management system was built on Informix but there was a pressing need to move to a modernized payments platform. So SRS decided to migrate to Oracle and benefit from its user-friendly features and robust security controls.

Recognizing the scale of the implementation, Latvia allocated a €20M budget and a five-year timeframe for delivery. SRS sought specialists that could provide support with the initial consulting and then the subsequent engineering capabilities. After a competitive pitch, the work was entrusted to Emergn.

Approach

SRS commissioned Emergn to assist in the transition from Informix to Oracle and to establish a leading tax payments system in the region. Despite the pressing need for an overhaul of the existing system, SRS also understood that unifying its internal and customs taxes under a single new system required time as well as a commitment to continuous improvement.

A development team of approximately 50 Emergn specialists were on-hand to aid more than 200 SRS team members. Following our principles of Value, Flow, Quality (VFQ), we began by consulting with the SRS team on key objectives and what value would look like over the course of the engagement.

We started by establishing an optimal flow of work. We also focused on gathering fast feedback to ensure quality outcomes. Then we set about supporting the SRS team with Product Management expertise.

At various stages, we were required to provide the skills to support highly technical implementations. This included streamlining tax payment processes, developing user-friendly digital services, ensuring clear user guidance, and providing tools to enforce tax and customs regulations consistently. We also provided guidance on the application of Intelligent Automation to minimize the manual tasks that had created significant issues under the previous system.

The new system received approval and was given the green light in 2015. Since then, more than 50,000 person-days were invested in meticulously preparing the system for launch. This huge commitment from Emergn and SRS has paid huge dividends. The new tax payments system has already had a demonstrable impact on individuals, businesses, and SRS itself.

The SRS interaction with taxpayers takes place almost entirely online. Which means reliable, user-friendly, efficient, and secure IT solutions are a must for us to reach our goals. The new payment administration system is a game-changing improvement. It simplifies the process for the taxpayers. And it provides substantial enhancements for SRS in terms of being able to analyze data and personalize services.

SRS business user

Our impact

The new payments system has resulted in faster tax collection and debt resolution. Thanks to a more accurate breakdown of tax obligations, it has also improved the process users go through and reduced errors leading to non-compliance. With high process automation covering more than 40 different business-related processes, there is a reduced burden on staff for manual interventions.

This future-ready platform ensures SRS can rely on a quicker, easier and more robust system for the next 20 years. The automation of manual tasks, unified account system, and digital-first approach have resolved many of the existing issues in tax and customs administration as well as making a wider impact.

40 > 1

The new system has streamlined tax account management by replacing more than 40 accounts per organization with a single bank account.

-98%

The maximum time required to complete tax payments has dropped from an estimated average of 250 minutes to just 5 minutes.

352,000

The new platform functionalities cover more than a quarter of a million different organizations and 1.88 million citizens across Latvia.

The shift from an old and manual system to the new Oracle-based platform not only helped taxpayers and the SRS staff. It also strengthened Latvia’s position as a reliable and attractive location for businesses in the region.

Rewards for taxpayers
  • A simplified user experience
  • Easier understanding of tax payments
  • Consolidated tax payments into a single bank account
  • Time savings (less than 5 minutes for payments)
  • Significant cost reduction (up to 98% for some taxpayers)
  • Fewer errors with automated payment recognition
Benefits for SRS staff
  • A reduced administrative burden
  • Lower costs through replacing high-maintenance legacy systems
  • 360-degree view of taxpayers for streamlined reporting
Advantages for Latvia in the region
  • An enhanced reputation for the tax and customs administration agency
  • Improved appeal as a business-friendly location in line with the strategic goals of SRS

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