PLANNING AND EXECUTING TAX AUDIT

Abstract

Tax audit exercise is a veritable compliance enforcement mechanism. Primarily designed to examine a taxpayer’s financial affairs in order to ascertain the correct amount of taxes to be paid by the taxpayer and raise additional revenue from detected discrepancies. An effective program of tax audit nudges taxpayers to voluntarily comply with the tax laws and guarantees retributive fairness. A properly planned and well executed tax audit activities can promote all round compliance risk management: •deterring tax evasion •correcting and educating taxpayers, •ensuring timely collection of tax arrears, •prosecuting tax offenders, •gathering intelligence on emerging tax compliance risks as well as •building confidence in the tax system and promoting voluntary compliance with the tax laws