Traditionally, tax administration, similar to other governmental bodies, relied heavily on paper-based records and manual correspondence. Most tax legislations mandated that taxpayers submit returns, reports, and supporting documentation in physical form, processed by administrative staff, in addition to notifications, appeals, and litigation procedures. However, with the widespread adoption of digital transactions and e-governance tools in recent years, it has become neither practical nor sustainable for tax authorities to operate under outdated systems. Instead, there is a pressing need to integrate digital technologies to modernize administrative practices, improve institutional capacity, and strengthen resilience against emerging technological risks.

The digital transformation of tax administration provides a significant opportunity to deliver services with greater efficiency, lower operational costs, and enhanced performance outcomes. It also reduces the compliance burden on taxpayers by enabling them to file tax returns, settle tax liabilities, and submit appeals electronically through secure digital platforms, including e-banking services. Furthermore, digitization facilitates seamless interaction between taxpayers and tax officials, allowing access to real-time information and guidance, thereby ensuring higher levels of compliance with minimal transaction costs.

Case Study: The Sultanate of Oman
The Sultanate of Oman provides a noteworthy example of digital transformation in tax administration. Over the past few years, Omani tax authorities, in collaboration with international advisory firms, have organized annual tax seminars to promote the integration of technology into fiscal governance. For instance, in early 2023, Ernst & Young (EY) convened a seminar aimed at redefining the future of taxation in Oman. The event highlighted the necessity for businesses operating within the Sultanate to update their systems and align their tax functions with technological advancements.

Omani tax officials emphasized that companies must remain responsive to the rapid pace of regulatory and technological change to avoid compliance risks. Current observations suggest that Oman’s tax authority is prioritizing the digitization of compliance-related procedures, the automation of electronic filing and case management through its digital portal, and the collection of taxpayer data through electronic channels—thereby fostering a more transparent, efficient, and technology-driven fiscal environment.

The Case of Iraq
In contrast, Iraq’s tax administration remains governed primarily by legacy legislation, including the Income Tax Law No. 113 of 1982, the Property Tax Law No. 162 of 1959, and the Vacant Land Tax Law No. 26 of 1962, in addition to Coalition Provisional Authority Orders No. (37), (38), and (49) issued between 2003 and 2004. Despite incremental administrative adjustments, such as the replacement of manual typewriters with computerized databases to record taxpayers’ obligations across all provinces, genuine digital transformation has yet to be realized.

While this limited computerization has facilitated the organization and retrieval of taxpayer information, it has also generated new challenges, particularly the recurring issue of name duplication and inconsistencies in taxpayer identification. This highlights the urgent need for Iraq to adopt a comprehensive strategy for tax digitalization—one that integrates advanced information systems, enhances transparency, and supports the broader agenda of e-governance and public sector reform.