This will help to avoid concealed revenues, it argues.

However, it will require a legislative amendment.

The Estonian Banking Association (Pangaliit) conversely not support the proposed data exchange model in its current form, stating that the legal permissibility and proportionality of intervention on that scale requires analysis.

As a state agency, the MTA is likely to be facing the same pressures in making cuts as are other government, public and state sector organizations.

Raili Roosimaa, the MTA's Deputy Director General for Taxes, told ERR that, as with other state institutions, the tax authority is constantly looking for ways to streamline its work.

Roosimaa said: "Since all our activities are very strictly regulated by law, we have proposed the legislator provide us with additional analytical capabilities, in order to improve tax collection efficiency."

Roosimaa added that the MTA wants in its risk analysis to use aggregate data on the money flowing through bank accounts, in respect both of individual and corporate taxpayers.

She said: "The MTA wants to get an overview of general cash flows from financial service providers, not individual transactions."

"We aim to enhance our risk models with mass data on transactions, better to assess the accuracy of tax obligations and to improve the precision of our audit targets," Roosimaa continued.

This would, it is argued, allow the authority to better target costly enforcement resources towards problematic taxpayers and avoid disturbing those who are compliant.

Evelyn Liivamägi, undersecretary at the Ministry of Finance, said that in the current budget situation, one of the priorities is to efficiently collect the taxes due under law.

To accomplish this, the MTA authority needs high-quality information to use in risk analysis, she went on.

Hoiw information is provided to the MTA and from whom is currently determined by the Taxation Act.

Liivamägi said: "We are looking for the optimal way to amend the law, so that the MTA can get better information. This certainly does not mean providing quarterly data on all companies."

The Estonian Banking Association said it does not support the MTA data exchange model as it is currently proposed.

The association's leader Katrin Talihärm said that MTA had introduced the model, which aims to improve tax risk detection, and which represents a conceptually new approach.

Talihärm said this needs to be analyzed from the aspects of banking secrecy, personal data protection, privacy intrusion, proportionality of the measure, administrative burden, and associated risks.

She said: "Among other things, it is necessary to clarify whether such intervention is legally permissible, necessary, and proportionate."

"It is also important to assess the associated risks," Talihärm went on.

Talihärm added that if, following the analysis, there emerges a desire to move forward with the proposals, public discussion is required, to determine whether the necessary changes are acceptable to society.

The MTA confirmed that all detailed questions are subject to broader discussion with stakeholders, to amass feedback.

"This is what the intention of the development plan, which precedes the creation of the bill, is all about, " Raili Roosimaa at the MTA said.

Evelyn Liivamägi at the Ministry of Finance said that ministry is still in the early stages of this work, though the preparation of the corresponding draft plan has begun and the hope is that it will be ready by autumn.

Liivamägi added: "Specific proposals must be as well-thought-out and precisely targeted as possible, so that firms' data held by banks is as well-protected as it possibly can be, while the MTA still gets exactly the amount of information required to improve tax collection efficiency."

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