The Digitalization of Financial Data

As the historian, Ray Huang pointed out, ‘The government must utilize data in order to understand the functioning of the different levels of government in a precise manner.’

One of the reasons why there were difficulties in launching new financial policies was due to the difficulty in providing accuracy in the reports of costs and benefits. This situation presented problems for the government in persuading the Legislative Yuan of the necessity to pass certain legislation.

In addition, the cost of some projects might be too high and its implementation also varied depends on each place, eventually, not only lead to the failure of the policy, but also the anger of the people. The introduction of the digitalization of information into the work of the Ministry of Finance was one very important step to upgrade its performance.

The United States began to introduce computers for the development of its national defense in the 1950s. The use of computers had enhanced the management skill of government and private business due to the capacity of computers to make mass calculations store and transmit data.

The information system can be described as the nerves of an organization. As the nerves transmit faster, the organization would thus have a faster way to respond for the well-being of the citizens. If a government is efficient in its actions, then it will be considered to be a responsible government by the public.

The digitalization of information in the Ministry of Finance was completed in two stages over a period of about forty years.

First, the Ministry established the Financial Data Center to create the foundation of its digitalized financial data system, and then asked the Customs, Banking, Insurance and Disbursement departments to launch data management systems.

Most credit for the achievement of the modernization of the Ministry of Finance and the digitalization of information should be given to the late Minister Li Kwoh-Ting.

The Ministry of Finance, under Minister Li, established the ‘China Data Center,’ in 1963, with the purpose to introduce computerization to the government and private companies including the processing of import and export statistics collected by the Customs Service.

In March, 1968, the Executive Yuan hired Liu Ta-Chung, an overseas-Chinese economist based in the United States to become the Chairman of the Tax Reform Commission. Liu believed that whilst it was important to undertake reforms on the law and system of the tax collection, it was also more important to reform its administration. Liu supported the idea of the creation of a ‘Financial Data Center’ whereby all the files would be able to be centralized with the use of the electronic calculator as many mistakes were made by manual when dealing with tons of data, and as a consequence many people failed to fulfill their obligation to pay tax.

With the support of President Chiang Kai-Shek, the Ministry of Finance became the first organization under the Government of the Republic of China to use computers in large-scale operation. The Executive Yuan approved the creation of the ‘Financial Data Center’ in May 1968 and started the recruitment of new personnel and the purchase of computers.
The work of the Financial Data Center began in December and focused on the collection of the data of tax relief on export goods, comprehensive income tax, profit-seeking enterprise income tax, household registry, land tax registry and the disbursement of funds of the national treasury.

The promotion and popularization of the digitalization of information took time and efforts. The Ministry of Finance set up the Intelligent Terminal between 1971 and 1978 to connect with the Financial Data Center with the tax collection offices of Taipei City and Taoyuan County. Computers were also set up in the tax collection offices of Kaohsiung City and Taichung County to manage the collection of local tax during 1979 and 1980.

Starting from 1980, the Financial Data Center became the information management unit for the Ministry of Finance. It was not only responsible for the digitalization of the information of the entire Ministry of Finance, but also focused on the digitalization of information of the income tax for profit-seeking enterprises as well as the commodity tax, inheritance tax and gift tax. The target is to integrate step by step, the name of taxpayer, his address and property data. Computer systems were in use in tax collection offices in about twenty-one cities and counties by 1985.

In December 1988, the Financial Data Center set up a team with ten personnel and stationed in the office building of the Ministry of Finance to take charge of the planning and designing of information system of the Ministry.

In April. 1989, the team purchased an IBM 9377 electronic calculator and its peripheral equipment in order to computerize the work of the Ministry of Finance. It also connected with the main frame of the IBM 3081 calculator in the Finance Data Center. In September the same year, the Ministry of Finance set up a ‘Working Report on the Promotion of Information Management’ to take charge of the Digitalization of Data Management in the Ministry of Finance.’

As soon as the team started its operation, the digitalization of the information of the managements of national treasury, finance, personnel, accounting, statistics and administration were all completed. Personnel from the Financial Data Center were also sent to different units to render assistance in implementation.

Due to the prevalence of the personal computer, the WINTEL had become popular in the computer market, and every member of the Ministry of Finance was able to use the computer system as a tool to improve the quality of their performance in their jobs. The Ministry of Finance set up a scheme for ‘End-User Computing’ in July 1991. ‘The Promotion Team for the Modernization of Official Documents’ was also formed in May 1996 to study and enact ‘The Operation Manual for the Management of the Modernization of Official Documents.’

In order to face the challenge of internet, and achieve the target of digitalization of government, the team then set up the Asynchronous Transfer Mode Back-Bone. The highest speed a workstation could reach was 100M BPS and the back-bone internet could reach 155MBPS.

Internet wiring connected by hubs, bridges and high speed switches was also set up from the first to the eighth floors of the building of the Ministry of Finance with all related internet work being completed by June 1997. In addition, the connection of personal computers with printers was also completed, the intranet, e-mail of the Ministry of Finance was used to facilitate work progress.

At present, the automated jobs of the Ministry of Finance include administration information, accounting information, statistical information, insurance information and personnel information. In order to match the blue-print of the government to digitalize Taiwan, with the help of the data team, the Ministry of Finance set up the management systems for the back-bone, fire wall, and information security. The Executive Information System was also set up, which has made work a lot easier for the Ministry of Finance.

The computerization of the Ministry of Finance grew larger in scope with increases in the speed of technology. Jobs such as the dispatch of national treasury matters, cashier work & accounting, the search of records in the revenue service, the connection of Customs units in different areas, the inspection of finance, the application for national properties, and the stock exchange were all computerized.

In accordance with the Cyber Security Management Act, the Ministry of Finance has conducted audits for suppliers involved in important information systems in 2023 to strengthen the Ministry's supplier security management.

In October 2023, the Ministry of Finance website underwent a layout adjustment. The website content and structure were reviewed and reclassified, and the color scheme was adjusted to improve the user experience and provide a more user-friendly and intuitive interface.

Both Li Kwoh-Ting and Liu Ta-Chung should receive the most credit for the improvements the Ministry of Finance has achieved in the past forty years. It is due to their foresights that the digitalization of information was implemented and it really made a lot easier for people in Taiwan when tax payment by internet, e-invoice and civic affairs were linked together.