Sunday, September 18, 2011

Tax payer's money - and much more

We all know how burning the need to save costs is in the public sector - to have to borrow less and avoid competitiveness destroying tax hikes etc. When this is coupled with a need to move a soon scarce workforce to more productive, better paid and more motivating tasks - which will take time - it is obvious: NO TIME TO LOSE - structural and wide structural changes are needed - innovation platforms (and standards)  for radical and disruptive innovations.

Payments have been an innovation platform - for e-banking, for card business, for factoring, for file transfers, e-invoicing, e-payments, e-pensions, e-invoicing etc

E-banking as been an innovation platform - for e-trading, e-loans, e-id services, e-payments, e-salary, e-invoicing etc

E-invoicing is the newest innovation platform - for automated and real time finance, cash management, administration, reporting, VAT-payments and risk mitigation services  - scores of them (detailed in earlier blogs).

Back to the public sector. The State Treasury in Finland has calculated that it could save 150m with e-invoicing and the municipal sector 150m - 300m€ tax payer's money - every year. Translate that to EU means 21bn/year and North America is probably much the same - tax payer's money. Then kick in millions of tons of CO2 avoided and 10s of billions of VAT and other taxes collected where they should be..

And then the businesses themselves. The Finnish Federation of industries arrived at a savings potential of 2,8bn/year for enterprises (b2b only). Translating that to Europe gives 200bn and kicking in b2c would add some some 20bn. This conservative calculation was made already 6 years ago - so today the figures would be higher - as seen from for example Deutsche Bank's 54bn for Germany only.

Why is this obvious, concrete, easy and fast productivity opportunity not grabbed with gusto - all over the place? Probably because lobbying organizations do not recognize these kind of benefits-for-all, because political decision makers have not been brave enough to issue deadlines, because the all-important entrepreneur fight for his daily bread and hate any changes in routines etc.

The answer is that we need a much firmer hand from the top - and the public sector has four reasons to do it: save tax payer's money, cut CO2, force enterprises to become more competitive and collect the tax due.

Earlier Questions European tax payers should ask - post:

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