Tax Administration Diagnostic Assessment Tool. Module 3: INTEGRITY OF THE REGISTERED TAXPAYER BASE

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Octavia Sherman
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1 Tax Administration Diagnostic Assessment Tool Module 3: INTEGRITY OF THE REGISTERED TAXPAYER BASE

2 Desired Outcome of POA 1 All businesses, individuals and other entities that are required to register are included in the taxpayer registration database. Information in database is complete, accurate and up-to-date Taxpayer registration and numbering are the fundamental first steps in administering taxes Registering and numbering each taxpayer underpins key administrative processes associated with filing, payment, assessment, collection and dispute resolution.

3 Program for detection of unregistered taxpayers Accurate and reliable information on taxpayers Updated taxpayer data cleaned of inactive or duplicate records Unique taxpayer identification numbers -TIN Able to generate pre-filled returns or estimated assessments International Good Practice in Taxpayer Registration Dormant records are identified and segregated for follow up action provides complete view of taxpayer data to frontline staff interfaces with other sub-systems (filing, payment processing, etc.) provides national view of taxpayer data for management information

4 Performance Indicators for POA 1 High Level Indicators P1-1: Accurate and reliable taxpayer information M1 P1-2: Knowledge of potential taxpayer base M1 Adequacy of Information Accuracy of Information Extent of initiatives to detect unregistered businesses and individuals Dimensions

5 Scoring P1-1-1: Adequacy of Information generates tax declarations and enforcement lists provides secure access for taxpayer registration and updates allows deregistration and archive of information interfaces with other IT subsystems Registration database includes all relevant details of taxpayer A provides country-wide view for management information and audit trail of user access Registration database is centralized and computerized Each registered taxpayer has a unique high integrity TIN provides a full view of taxpayer for frontline staff

6 Scoring P1-1-1: Adequacy of Information generates tax declarations and enforcement lists provides secure access for taxpayer registration and updates Registration database includes all relevant details of taxpayer B Registration database is centralized and computerized Registered taxpayers have more than one TIN but these are linked allows deregistration and archive of information interfaces with other IT subsystems provides countrywide view for management information and audit trail of user access provides a full view of taxpayer for frontline staff

7 Scoring P1-1-1: Adequacy of Information generates tax declarations and enforcement lists provides secure access for taxpayer registration and updates Registration database includes all relevant details of taxpayer C Registration database is computerized BUT decentralized Taxpayers have more than one TIN but these are linked at the decentralized level allows decentralized deregistration and archive of information interfaces with other decentralized IT sub-systems provides decentralized view for management information and audit trail of user access provides a full view of taxpayer BUT at a decentralized level

8 Scoring P1-1-2: Accuracy of Information Information Identification and segregation of dormant records (stop filers, recalcitrant taxpayers) for follow up action Management and audit reports indicate accuracy of the registration database A Identification and removal of inactive taxpayers (dead persons, defunct business), duplicate, false and invalid records Routine verification of information held in the database through third party cross checking Checking authenticity and proof of identity as well as legal basis of registrant

9 Scoring P1-1-2: Accuracy of Information Information Identification and segregation of dormant records (stop filers, recalcitrant taxpayers) for follow up action Management and audit reports indicate accuracy of the registration database B Identification and removal of inactive taxpayers (dead persons, defunct business), duplicate, false and invalid records Verification of information through third party cross checking is done on a case-by-case basis Checking authenticity and proof of identity as well as legal basis of registrant

10 Scoring P1-1-2: Accuracy of Information Information Identification and segregation of dormant records (stop filers, recalcitrant taxpayers) is ad hoc Management and audit reports either unavailable or indicate low level of accuracy of the registration database C Ad hoc identification and removal of inactive taxpayers (dead persons, defunct business), duplicate, false and invalid records Verification of information through third party cross checking is done on an ad hoc basis Checking authenticity and proof of identity as well as legal basis of registrant is done on an ad hoc basis

11 Scoring P-1-2: Knowledge of potential taxpayers Systematic use of third party information sources Reports show actions and results in detecting unregistered businesses and individuals A Program of inspections and field survey of business premises and traders

12 Scoring P-1-2: Knowledge of potential taxpayers Systematic use of third party information sources Reports show actions and results in detecting unregistered businesses and individuals B Program of inspections and field survey of business premises and traders

13 Scoring P-1-2: Knowledge of potential taxpayers Ad hoc use of third party information sources C Reports show ad hoc actions and results in detecting unregistered businesses and individuals Program of inspections and field survey of business premises and traders

14 Checklist of Questions and Evidence for POA 1 Table 5 of the Field Guide

Tax Administration Diagnostic Assessment Tool

Tax Administration Diagnostic Assessment Tool Pre-Assessment Module 6: TIMELY FILING OF TAX DECLARATIONS Desired Outcome of POA 4 The desired outcome is: Taxpayers file their tax on time. Tax are the principal