Good Practices and Innovations in Public Governance 2003-2011

2003 Category 3: Chile
Latin America and the Caribbean
Chile
2003 Category 3 Winner
Servicio de Impuestos Internos (SII)
Internal Revenue Service of Chile
Description
Innovating the tax system so that filing taxes becomes easier and less costly for
all citizens.
The Problem
The government was faced with the challenge of making the tax structure easier to
comply with, and lowering the operational and processing costs.
The Solution
The Internal Revenue Service of Chile (SII) has developed a unique means of using an
e-government application, which encourages compliance with filing requirements,
lowers costs, and increases trust in government. Unlike most online tax sites, the Chilean
site automatically calculates taxes for each taxpayer, based on information already
on file. Users then have the opportunity to accept or modify the existing form.
In 1993, the SII undertook a fundamental change in its modernization process by
adopting open information technologies (TCCP/IP in network protocols and UNIX
incorporated systems) and relational databases. In 1995, the SII adopted the internet
as a platform for interacting with taxpayers, and for its internal use. In October of
that year, the SII website was launched (www.sii.cl).
In 1997, a fundamental change took place – the first online transactions were processed,
allowing taxpayers to access directly the SII databases to check on the status
of their tax dues. As the next step, the PIN codes for each tax payer were introduced,
allowing users to check on the status of their fiscal statements.
When first launched, the SII website served primarily as a provider of information,
introducing an easier way to comply with fiscal obligations. Since 2001, citizens
were provided with an access to the Proposed Income Tax Return, which is prepared by
and placed on the website of the Internal Revenue Service of Chile or the Servicio de
Impuestos Internos de Chile (SII). Taxpayers can confirm or modify the form, sending
it through the internet to the SII.
This innovation has had a large impact on approximately half of all taxpayers required
to submit the Annual Income Tax Return (roughly 2,100,000 contributors),
423