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THURSDAY, MAY 2, 1991
THE
GOVERNMENT BELIEVED THAT A SYSTEM OF SELECTIVE TAX AUDIT WOULD HELP IN THIS REGARD, HE SAID.
TO
MR AU-YEUNG SAID THE GOVERNMENT'S LONG-TERM AIM WAS NOT SO MUCH FOCUS ATTENTION ON PARTICULAR TAXPAYERS, BUT RATHER TO TARGET ITS EFFORTS AT INDUSTRIES AND GROUPS IN THE COMMUNITY WHERE COMPLIANCE PROBLEMS WERE PREVALENT.
"THE THRUST OF OUR ACTION WILL BE TO ATTACK THE ROOT CAUSES OF THE PROBLEM, HE SAID.
MR AU-YEUNG POINTED OUT THAT AT PRESENT HE COULD NOT BE TOO SPECIFIC ABOUT THE CRITERIA FOR AUDIT SELECTION AND THAT THE EXPERIENCE GAINED FROM AUDITS WOULD PLAY AN IMPORTANT PART IN THE DEVELOPMENT OF IDEAS.
"FROM A PRACTICAL POINT OF VIEW WE WILL OBVIOUSLY SEEK TO TARGET OUR EFFORTS AGAINST THOSE AREAS WHERE WE BELIEVE EVASION IS GREATEST, HE SAID.
"
ON THE CONDUCT OF THE TAX AUDIT, THE COMMISSIONER POINTED OUT THAT AUDIT WOULD NOT BE CONCERNED SIMPLY WITH THE VERIFICATION OF ACCOUNTS LODGED BY TAXPAYERS, RATHER, IT WOULD BE CONDUCTED FOR THE PURPOSE OF SATISFYING THE AUDITOR THAT THE TAXPAYER HAD COMPLIED WITH THE PROVISIONS OF THE LAW.
AS THE
IRD WOULD BE SEEKING TO MAXIMISE THE RETURN FROM IT'S EFFORTS, IT GAVE RISE TO TWO CONSIDERATIONS IN TAX AUDIT, HE SAID.
"FIRSTLY, CASES WILL NOT BE CHOSEN FOR AUDIT UNLESS THEY EXHIBIT CHARACTERISTICS INDICATING POSSIBLE NON-COMPLIANCE.
PRODUCTIVE
"SECONDLY, OUR AUDITORS WILL BE ACCOUNTABLE FOR THE USE OF THEIR TIME. THEY WILL NEITHER BE ENCOURAGED TO INITIATE UNWARRANTED ENQUIRIES I.E. TO GO ON 'FISHING EXPEDITIONS' NOR TO CHASE THE 'LAST DOLLAR' THE COMMISSIONER SAID.
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THE OBJECTIVE OF THE AUDITORS WOULD BE A QUALITY AUDIT WHICH MEANT THAT THE AUDITOR HAD EXAMINED A TAXPAYER'S AFFAIRS IN SUFFICIENT DEPTH ACCORDING TO INTERNAL GUIDELINES AND WAS SATISFIED THAT MATERIAL ERRORS AND OMISSIONS HAD BEEN IDENTIFIED AND CORRECTED,
RISK MANAGEMENT TECHNIQUES WOULD BE ADOPTED IN APPROPRIATE POINT TO CLOSE THE AUDIT, MR AU-YEUNG SAID.
DECIDING THE
HE STRESSED THAT IN ALL AUDIT CASES, THE AUDITOR WOULD BE EXPECTED TO CONDUCT THE AUDIT IN A COURTEOUS MANNER CAUSING A MINIMUM OF DISRUPTION TO THE TAXPAYER.
"WE IN THE DEPARTMENT ARE CLEARLY OF THE VIEW THAT NOBODY WINS THROUGH THE ADOPTION OF CONFRONTATIONAL ATTITUDES, WHETHER BY THE AUDITOR, THE TAXPAYER OR HIS REPRESENTATIVE.
"ACCORDINGLY, WHILST THE TASK WITH WHICH OUR AUDITORS ARR CHARGED MAY NOT BE APPRECIATED BY TAXPAYERS, IT IS NONE THE LESS ESSENTIAL AND WILL BE CONDUCTED IN A FAIR, IMPARTIAL AND REASONABLE MANNER, WITH DUE RESPECT BEING ACCORDED AT ALL TIMES, HE SAID.
/DETAILING THE