Away with the Red Tape for Young Taxpayers

When it comes to using computers and online services young taxpayers are born naturals. Even so, they spend very limited time using the Danish Tax and Customs Administration (SKAT) digital solutions. The Danish Tax and Customs Administration (SKAT) had an idea that they could make young taxpayers more self-reliant.

”What does ‘back taxes’ mean? I don’t know what it means. It’s as if I have to pay them money.”

Upper secondary school student, 21 years

When Sara receives her annual tax return statement for 2009, she looks at the attached giro form and smiles broadly. Because in the tax due line she can read “00”. But higher up on the statement, there is a figure of DKK 426 for outstanding back taxes, which she can pay with the giro form, which she doesn’t understand until MindLab explains it to her. And this just really confuses her. “All I know is that they tax my wages at 39%. If they can’t do that properly I shouldn’t have to suffer because of it!”
Sara’s difficulties in managing her tax details is not an unusual occurrence by any means. The study looked at the challenges facing young people when handling their tax returns. It concluded that young people are unaware that they are personally responsible for paying the correct amount of tax, and that they have great difficulty using on-line self assessment systems. This is because the web-based solution assumes knowledge of the taxation system that young users do not possess.

MindLab interviewed:

• Nine young people from Copenhagen, Falster and Central Jutland, all under the age of 30, with educational backgrounds ranging from secondary school to university.
• Staff in the Danish Tax and Customs Administration (SKAT) department, regions and the local call centres.

The most important results

• Basic knowledge about the meeting between the Danish Tax and Customs Administration (SKAT) and young people.
• Insights into how the meeting between the Danish Tax and Customs Administration (SKAT) and young people becomes primarily a problematic situation because the online tax registration system is considered inscrutable.
• Specific solutions that increase young people’s awareness about their own responsibilities and options in relation to the Danish Tax and Customs Administration (SKAT).
• Specific solutions that simplify the Danish Tax and Customs Administration’s (SKAT) communication and digital solutions

What MindLab did

Young taxpayers are at a point in their lives where they have to gain know-how and competences in a lot of areas and on many fronts, so knowledge about their tax situation is a long way down their list of things to do. This means that it is difficult interviewing this group of citizens about their taxes. They simply cannot remember or perhaps don’t even know what they did or did not do when it comes to the Danish Tax and Customs Administration (SKAT). So observation played a crucial role during the study. MindLab and staff from the Danish Tax and Customs Administration (SKAT) visited the young taxpayers in their homes on the day they received their preliminary tax assessment for the coming tax year. Their confusion was all too evident when these young people read their tax statements. For example, when the tax form had “back taxes”, did that mean they owed the Danish Tax and Customs Administration (SKAT) money or vice versa?
We visited 21-year old Dennis on Falser, as he bravely tried to update his preliminary tax statement via the Danish Tax and Customs Administration’s (SKAT) online system. It proved to be an almost impossible task for the young car mechanic apprentice with limited knowledge about the tax system.
Details from the young citizens’ lives were subsequently used to create specific initiatives in cooperation with staff from the Danish Tax and Customs Administration (SKAT).
The study has resulted in a cross-ministerial project on the improvement of teaching materials for young taxpayers.