1. Roles of Risk Management in VAT Administration
TEAM MACDONALD

2. Risk Areas Registration Filing Payments Record Keeping
Reporting and Auditing

3. Challenges on Tax Registration
Failure to register by eligible businesses
Inadequate integration of systems to get and match third party information
Poor record keeping especially with the cash economy

4. Challenges on Filing Non filing late filing Incorrect filing
Deliberate filing of nil return with an aim of buying time

5. Challenges on Payments
Submission of return without accompanied payment
A lot of challenges with dishonored cheques
Mis-posting of tax payments
Debt management (Bad debt) especially Government departments and parastatal / Weak enforcement mechanisms and shortage of staff

6. Challenges on record keeping
Difficult for tax administrations to ascertain the correct tax payable ( especially the manual record keeping)

7. Reporting and Auditing
Deliberate audit objections
Inadequate competent skills to handle audits in specialized industries (oil & gas, telecomm, mining etc)
Low integrity issues
Inadequate ICT aiding tools in handling comprehensive audits
Falsification of business records
Unnecessary delays on information provision by taxpayers during tax audits

8. Suggested Solutions
Change management on attitude behavior of audit staff to improve integrity
Capacity building and putting up of specialized personnel to handle specialized sector e.g. Oil and gas , telecommunication, etc
Intro of EFD to capture business records
Sensitization of eligible taxpayers
Stiff penalties on late & non filers
Usage of biometric data for registration of VAT traders to avoid deliberate changes of business
Interface and Integration of all key government systems
Introduction of E-payment solution
Data analytical tools to identify non compliance trends (in filing, audit, debt management)

9. Recommendation Technical/ Capacity Training Area
Training in Compliance Risk Management as an emerging ‘best practice’
Exchange programs by Revenue administrations & other institutions