Tax Administration Diagnostic Assessment Tool POA 4: TIMELY FILING OF TAX DECLARATIONS Pre-Assessment

Desired Outcome of POA 4 The desired outcome is: Taxpayers file their tax declarations on time. Tax declarations are the principal means by which a taxpayer’s liability is established. There are monthly or quarterly or annual cycles for filing declarations, which vary from tax to tax. Tax laws and administrative rules specify who is required to file and when, and what supporting documents are required. It is important that all taxpayers who are required to file do so at the time when it is due. Failure to meet the filing requirement on time may result in penalties, interest or prosecution. Tax declarations may be paper-based or in electronic form and may be filed by the taxpayers themselves or their tax accountants/lawyers.

Good Practice in Filing of Tax Declarations Simplifying filing requirements, including pre- filling of tax declarations Being proactive in reminding taxpayers of approaching deadlines Using automated processes to identify taxpayers who have failed to file on time Timely follow up and enforcement action tailored to the circumstances and filing history of non-filers Using profiling techniques based on behavior to predict effective actions to achieve on-time filing Outreach programs to assist taxpayer groups and intermediaries Promoting use of electronic filing for all core taxes Having a solid IT system that monitors and manages filing compliance

Performance Indicator for P4-10: Filing of Tax Returns Dimensions High Level Indicator P4-10: On-time filing rate [M2] Number of CIT declarations filed by the statutory due date in percent of expected declarations by registered CIT taxpayers Number of PIT declarations filed by the statutory due date in percent of expected declarations by registered PIT taxpayers Number of VAT declarations filed by the statutory due date in percent of expected declarations by registered VAT taxpayers Number of PAYE withholding declarations filed by the statutory due date in percent of expected declarations by registered employers Extent to which tax declarations are filed electronically P4-11: Use of electronic filing

What is expected declaration? Dimensions For TADAT purposes of measuring on-time filing rates, “expected tax declarations“ means the number of declarations that the tax administration expects to receive from all registered taxpayers that are required by law to file returns. Excluded from the measure are: * Unregistered taxpayers * Non-mandatory tax declarations from taxpayers who have no legal obligation to file, e.g., taxpayers who are below the declarations filing threshold, or exempt category

Scoring P4-10-1: On-time Filing Rate for CIT Returns Total number of CIT declarations filed by the statutory due date in percent of the total number of CIT declarations expected from registered CIT taxpayers Number of CIT declarations filed by the due date x 100 Number of CIT declarations expected from registered CIT taxpayers A - Ratio is above 90 percent for all taxpayers - Ratio is at least 99 percent for all large taxpayers B - Ratio is above 75 percent and up to 90 percent for all taxpayers - Ratio is at least 95 percent for all large taxpayers C - Ratio is above 50 percent and up to 75 percent for all taxpayers - Ratio is at least 90 percent for all large taxpayers D The requirement for a C rating or higher are not met OR information insufficient

Scoring P4-10-2: On-time Filing Rate for PIT Returns Total number of PIT declarations filed by the statutory due date in percent of the total number of PIT declarations expected from registered PIT taxpayers Number of PIT declarations filed by the due date x 100 Number of PIT declarations expected from registered PIT taxpayers A Ratio is above 90 percent B Ratio is above 75 percent and up to 90 percent C Ratio is above 50 percent and up to 75 percent D The requirement for a C rating or higher are not met or information insufficient

Scoring P4-10-3: On-time Filing Rate for VAT Returns Total number of VAT declarations filed by the statutory due date in percent of the total number of VAT declarations expected from registered VAT taxpayers Number of VAT declarations filed by the due date x 100 Number of VAT declarations expected from registered VAT taxpayers A - Ratio is above 90 percent for all taxpayers - Ratio is at least 99 percent for all large taxpayers B - Ratio is above 75 percent and up to 90 percent for all taxpayers - Ratio is at least 95 percent for all large taxpayers C - Ratio is above 50 percent and up to 75 percent for all taxpayers - Ratio is at least 90 percent for all large taxpayers D The requirement for a C rating or higher are not met OR information insufficient

Scoring P4-10-4: On-time Filing Rate for PAYE Returns Total number of PAYE withholding declarations filed by employers by the statutory due date in percent of the total number of PAYE declarations expected from registered employers Number of PAYE withholding declarations filed by the due date x 100 Number of PAYE withholding declarations expected from registered employers A Ratio is above 90 percent B Ratio is above 75 percent and up to 90 percent C Ratio is above 50 percent and up to 75 percent D The requirements for a C rating are not met OR information insufficient

Scoring P4-11: Use of Electronic Filing The extent to which tax declarations are filed electronically A At least 85 percent of declarations are filed electronically for each of the core taxes All large taxpayers file electronically B At least 70 percent of declarations are filed electronically for each of the core taxes At least 80 percent large taxpayers file electronically C At least 50 percent of declarations are filed electronically for at least two core taxes D The requirement for a C rating or higher are not met OR information insufficient

Table 14 of the Field Guide Checklist of Questions and Evidence for POA 4