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Learn how customs agencies can secure digital borders and create modern, technology-enabled customs solutions to ensure compliance and plug revenue leakage.
Digital technology is rapidly changing how people live and work. The prevalence of digital goods and services along with the exponential growth of the digital marketplace means that governments need to establish strong digital borders to prevent revenue leakage and control illegal activities. But few customs organizations around the world are equipped to handle digital’s disruptive impact on national and fiscal security while delivering public services for the future.
Agencies must establish and strengthen digital borders to ensure compliance and plug revenue leakage. Along with a change in mindset, customs organizations must modernize to keep up with quickly evolving, complex digital markets through more sophisticated customs technology, intelligence-led processes and tech-savvy resources to make digital borders less porous, recoup revenue and track compliance.
Trade in digital goods and services is expected to grow significantly in the next few years. Many governments are yet to comprehend its economic impact and the risks involved. Countries with high digital to physical trade ratios such as United States, United Kingdom and Japan are already losing billions of dollars every year in tax revenues due to unregulated digital trade involving overseas traders. Even growing and developing economies are not immune.
In addition to investing in latest technology solutions, customs agencies will need to radically change their mindset to stay ahead of this shift in trade patterns.
Few customs agencies have modernized to keep up with the quickly-evolving, complex digital markets. Agencies need more sophisticated customs technology, intelligence-led processes and tech-savvy resources to put the invisible world of digital trade on the government’s map.
They must also provide networks and platforms to facilitate collaboration within and across the customs ecosystem. Doing so will provide the infrastructure to secure digital borders, boost revenue and ensure compliance.
To create an operating model that captures big data from across the industry ecosystem, customs agencies will need to:
Act on data insights by establishing a technology environment rooted in customs analytics techniques that use data across networks, geographies and entities to control and understand trade in digital goods and services.
Make new connections with key players in the digital ecosystem such as Internet service providers, banks, telecoms and industry representatives to ensure sustainable, effective service.
Become a digital agency by moving beyond electronic processing of customs declarations and physical goods control to embrace a digital world, one that uses technology and trends to increase efficiencies.
April 16, 2014
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