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Extended reality (XR) blends physical and digital worlds to relocate people in space and time. XR is an umbrella term encompassing virtual reality (VR), augmented reality (AR) and other immersive technologies. XR is creating entirely new ways for us to experience the world around us, while also opening up new possibilities for businesses and government.
Should revenue agencies be thinking about XR? I think they should. XR throws up some important considerations for revenue calculation, collection and service delivery. There are also opportunities for agencies to use these technologies to improve training and collaboration internally.
XR is one of the key trends in Accenture’s Technology Vision 2018, our latest research into technologies that are changing the world. The survey supporting the research included a sample of revenue agency respondents, 92 percent of whom agree that XR will create a new foundation for interaction, communication, and information.
There are several areas in which respondents feel XR could be relevant in the next two years, including education and training; employee collaboration, consumer experiences; and data visualisation. Revenue agencies to date are not implementing full-scale VR or AR applications. Today, the motivation to explore XR is more to maintain an openness to digital innovations and being prepared to adapt to, or exploit the benefits of, new developments. Indeed, for revenue agency respondents to our survey, merely “experimenting with new technology” is by far the biggest driver for adoption of XR technologies.
Longer term and perhaps from more of a strategic perspective, XR presents new complexity for tax agencies. In an already globalised and digitalised world, XR offers companies an increased ability to work across jurisdictions, and in “virtual capacities”. It increases further the situations in which a company may choose to use the services of a business down the road, or a business on the other side of the planet, with equal ease and service quality. As XR further diminishes the importance or relevance of location for business owners and their customers, there are implications for revenue agencies. We already see these implications in the BEPS initiatives and more recently in the increasing interest agencies are taking in establishing an administrative framework to deal with the shared or digital economy. XR services delivered across borders will further increase the relevance of ongoing discussions on virtual businesses.
While XR can create some complexity for revenue agencies, there are some interesting ways it could help to simplify and enhance internal processes. For example, XR technologies could help agency employees to visualise reams of data, helping them to see and understand patterns and outliers that would be harder to grasp on paper or screen. For example, XR will offer an auditor the ability to ‘step inside’ the data with 360-degree 3D vision, and even the ability to touch and manipulate the data to support collaboration on audits.
XR tools are also likely to play a key role in training, with recent research suggesting XR can improve recall capabilities. XR technology offers an immersive way to get employees up to speed, as well as improve their understanding and approach to citizen services. VR, supplied by training companies such as Strivr, for example, is already being used for employee training in a diverse range of industries. Similarly, VR could enable employees and senior managers to ‘experience’ scenarios, helping them to collaborate more effectively and respond appropriately to challenging situations.
While it is more exploration than implementation at this stage, XR certainly presents new possibilities and promise, alongside significant disruptive capacity to the tax base. This is the very beginning, but even today 70 percent of tax agency respondents agree that XR will be widespread and will impact virtually every industry over the next five years. With the pace of technological change seemingly increasing each year, it makes sense to be thinking about XR and planning for the real implications of all things virtual and augmented.