Innovation in Tax Administration: Digitizing Tax Payments, Trust and Information Security Risk

Information Technology (IT) innovation in tax administration and the development of electronic government (egovernment) applications in the public sector has improved operations, governance, service delivery and accessibility to public services. e-filing is one form of IT innovation that has been used by the South African government which allows users to submit tax returns online for processing. Despite the enhancement of the e-filing system, tax authorities are yet to realise full e-filing potential. The purpose of this study is to determine and describe what would be restricting the full adoption of e-filing as an innovative tax administration system. The study integrates two constructs; perceived threat and safeguard effectiveness with the UTAUT model to empirically test a derived model. A quantitative approach was applied and a survey undertaken which sampled 154 South African taxpayers in the Gauteng province of South Africa. The responses captured indicated that societal pressures, trust and security risk were important constructs in determining why the South African government was not realising the full potential of the innovative e-filing system. The implications for this work is that more training and awareness campaigns should be targeted to the South African tax payers.