Deployment of the Incomes Register a success – further development still needed

4/8/2021

A performance audit of the deployment and impact of the Incomes Register has been published. The audit conducted by the National Audit Office of Finland (NAOF) investigated whether the Incomes Register has achieved the benefits and impacts set as its goals.

The goals of the Incomes Register are to reduce the administrative burden for employers and to improve the efficiency of the authorities’ activities by providing them with real-time access to income earners’ income data. The audit reviewed the preparation, implementation and use of the Incomes Register between 2015 and 2020. The main focus was placed on the impact of the reporting of earnings payment data, which started in 2019.

Automation makes the transfer of data smoother

The majority of earnings payment data (89%) is reported directly and automatically to the Incomes Register from payroll software via an interface. Of all taxpayers, 7% report their data by submitting files generated in their payroll system to the Incomes Register via the e-service’s upload service.

Most submitters can submit basic reports to the Incomes Register directly from their payroll software. A more fast-paced reporting rhythm, subsequent corrections, the reporting of overpayments and reconciliations were mentioned as challenges in reporting.

While the majority of corrections (73%) are already made through software, an anonymous questionnaire sent from the Incomes Register to software companies and submitters in February 2021 showed that not all software suppliers had made the necessary changes in their systems to enable corrections or the reporting of overpayments via the technical interface. If data needs to be corrected in the Incomes Register’s e-service or using paper forms, without using payroll software, more manual work will inevitably be required.

Overall, the amount of correcting earnings payment data is decreasing: in 2019, 12% of earnings payment data was corrected, while the corresponding figure in 2020 was 6%. A more detailed study of how correcting could be made even easier in the Incomes Register is currently in progress.

The Incomes Register is developed together

The Incomes Register is developed together with a cooperation network, consisting of taxpayers, and customer panels. The cooperation network involves representatives of different lines of business, among others. A single operator can have an impact on the development of the Incomes Register through customer panels. Volunteer members are sought for the panels every two years.

Through the cooperation network and customer panels, data submitters and users can present change requests and development proposals, and can give feedback on the functioning of the Incomes Register.

For example, processing rules for reports received in the Incomes Register have been prepared together with taxpayers to ensure that reports are submitted without any errors. These technical validation rules will be developed annually on the basis of observations, feedback, and taxpayers’ development proposals.

In addition, the reports obtained by payers from the Incomes Register have been improved, particularly for reconciliation needs, in accordance with proposals received from payers.

Correct data in the Incomes Register benefits everyone

Each data submitter is responsible for the correctness of data in the Incomes Register. Currently, observations of any incorrect data in the Incomes Register made by a data user are not transmitted to other data users.

Adding this parallel monitoring data to the Incomes Register is one development theme in the Incomes Register’s development plan, while advancing this matter would require more detailed information on current practices, as well as legal amendments.

Regarding the monitoring data, it should studied how different user organisations are currently monitoring data in the Incomes Register and how often, whether these processes produce monitoring data, and how this data and any later changes in it could be saved in the Incomes Register and be accessible to other data users.

Read the entire audit report here.