CASH ECONOMY – GROUP 3 - JIMU

CHALLENGES Lack of documentation or invoices for the transactions No audit trail Difficult to quantify correct amount of taxes due to incomplete records Promotes corruption for both the taxpayer and the tax administration Under declarations due to missing records Difficult to identify potential taxpayers for registration

SOLUTIONS / RECOMMENDATIONS Extensive taxpayer education for the general public including schools Introduction of laws to compel customers to demand receipts Use of a TIN to access different services e.g banks etc Promote the use of technology for business transactions

RECOMMENDATIONS FOR CAPACITY BUILDING Specialised training for auditor to audit incomplete records Effective use of risk assessment principles in tax administrations Exchange programmes aimed at sharing experiences and learning from countries that have dealt with taxing cash economies successfully VADA Secretariat to carry out reaserch on the challenges faced by member states and develop general guidelines to tax cash economies