Decision Support System

& Data Mining

Methodologies
FTA Conference

Atar Singh Tomar

atar.toomar@tatainfotech.com

Wednesday, Decem Tata Infotech Ltd. Proprietary

ber 08, 2021
 Outline
 Why a Tax Decision Support System (DSS)?
 Tax DSS Architecture
 Tax DSS Methodology
 Tax Decision Support System
 Business Benefits
 Concluding Thoughts
 Q & A Session

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Mainframes Operational Online Analytical
Systems Systems

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 ACTION

Prediction
Business WHY Forecast
Need

WHAT

Complexity
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s Readily access and analyze the tax information
s Effectively and accurately identify the area of non-
compliance
s Better understand the taxpayers
s Formulate better legislative policies
s Achieve higher degree of accuracy in revenue forecast
s Optimize the operational cost

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v Compare the revenue collected and balance due for the past 5 years

v Evaluate the effectiveness of audit programs in identifying non-filers and

by Business Type
by Tax Type
under reporters by Tax Period by tax period
by Location by location
v Trends in the collected and due amounts in the various Payment
by its distribution Plans
by across at
thetype
business various
income groups of the taxpayers
various stages and defaulters by the payment plan type
by the tax period
by the income group
v Evaluate the effectiveness of external data in identifying non-filers
by the tax type by
showing the number of such taxpayers
by tax period
v Evaluate the productivity of various departments in by locationcases
handling over
by business type
the years

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 Designed for real-time data entry and editing
 Data maintained is constantly changing
 Limited historical data is available for on-line comparisons

 Running Decision Support queries degrades the performance

of the Transactional Application
 Difficulty in making ad-hoc queries
 Complexity in achieving Comparisons, Aggregations,
Rankings, Running totals etc.
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Decision Support System is a computer based
information system designed to facilitate the
decision making process of semi structured tasks

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 Metadata
“A Data Warehouse is a
Repository subject-oriented,
Indv. / Corp.
Tax App. integrated,
Data Validation
Source time variant and
non-volatile
Data Migration
collection of data in support of
Un-employment
Tax App. management’s decision-making process.”
Data Scrubbing

Transformation Sequence
Tax Data Data
Withholding AY Data-Mart contains a subset of the data
DataTable of Contents Warehouse
X T Transformation
Tax App.
Extraction,Title Page T Origin of Data
LAN
available in an enterprise-wide data warehouse.
=
ScrubbingBB
AA 4
8
Data
Data
A WAN
CC Meta 12 Cube Data Mining
Y T is X
C
Warehouse
A/R
2Q96 and
3Q96
State’s Legacy
AB
BA
and
16
20
Transactional
Mart application
 Discovering meaningful new correlations, Internet
Transformation
System 4Q96  Patterns and trends
Income Meta Cube
1Q97
2Q97 Using B
Internal Data  Pattern recognition technologies,
Sources Tax and mathematical
 Statistical
Withholding techniques
Access Levels
IRS’s different tapes Compliance
 IMF
OLAP tools
 IRTF
 BMF Refresh info EIS
On-Line Analytical Processing (OLAP)
Insurance Time Line of Journey
External  BRTF 12 Query & Reporting
Sources Is a process to assist decision making by using tools to facilitate the analysis
Other State Agency's Statistical Analysis
External Data
 ofPayroll
9
multi-dimensionally
System
Data
=
3structured business information.
Warehouse
Collected Tax Revenue
Data Mining
 Transportation System
6
Sources  General Services
• North
• Withholding
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1Q97
9
East West North
 Structured Interviews

Adaptation
Decision Analysis
Scoping of Prototype
Data Analysis

Revision & Enhancements

Project Evaluation Criteria
Technical Analysis
Detailed Design
Conceptual DSS Orientation
System Construction
Decision Support Analysis Plans & Prioritization
Testing

Functional Orientation
Demonstration
DSS Software Evaluation & Selection Operational Training
Evaluation

Deployment

Prototype Development Maintenance

Operational Deployment and Support

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v Taxpayer Profiling
v Tax Collection
v Fraud Detection & Tax Non-compliance
v Legislative Change Impact
v Revenue Forecasting
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These Subject Areas can be viewed w.r.t to
various common perspectives
Ø Business Type
Ø Location (States, City)
Ø Taxpayer (Demographic)
Ø Tax Type
Ø Tax Period (Year, Quarter, Months)
Ø Time (Year, Months, Events, Seasons)
11
 v Provides comprehensive taxpayer information

v Identification of potential fraudulent taxpayers

v Compliant taxpayer can be relaxed from

cumbersome audit process

v Provide better taxpayer services

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 v Analyze the trends in tax revenue for revenue
enhancement
v Evaluate uncollected tax revenue

v Reallocate resources to value added programs

v Enhance A/R management

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 v Maximize the non-compliance discoveries
v Analyze trends and patterns of targeted groups
of taxpayers
v Rank potential audit suspects by evaluating
their revenue potential
v Focus on collection and compliance efforts
v Substantial increase in tax assessments and long
term reduction in tax gap

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 v Leverage the accuracy, efficiency,and productivity
of non-compliance programs
v Provide an alert mechanism to trap non-
filers
before expiry of the statute limit

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 v Determine the effects of changes in
legislation, policies and regulations
v Estimate fiscal and administrative
impacts of proposed legislative changes
v Support users in formulating tax policy
v Analyze the revenue effect of proposed
and enacted legislative changes

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v Ability to formulate reasonable fiscal policies
v Incorporate the historical revenue trends and other governing
estimate variables
v Provide the highest degree of accuracy in revenue forecasting
v Use of econometric models to improve the accuracy of
forecasts

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Tangible Benefits
v Improvement in non-compliance will increase tax revenue
v More cost effective decisions are enabled
v Better business intelligence is enabled
v Enhanced taxpayer Services

Intangible Benefits
v Improved productivity
v Reduced redundant processing and support
v Ability to focus on business processes through complete analysis

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 Tax DSS holds great potential for dramatic business benefits
 Capitalizes on the potential value of the organization’s
information
 Provide decision makers access to consistent, reliable and
timely data
 Still much more to explore and enhance

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 Understand DSS Technology

Tax DSS Superior

Methodology Solution

Expertise in the Large pool

Area of resources

Make Things Happen

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