To deter tax
evasion and tax avoidance, the Revenue has set up tax audit teams. Their
chief function is to supplement the tax investigation section to promote
voluntary tax compliance by face-to-face meeting with the taxpayers. At
times, the audit officers visit the taxpayers' premises to
examine the business records and the business operations.
Their
approach is result oriented. Rather than adopting a random fishing tactic,
they are inclined to target at areas prone to non-compliance. For example,
they like to select the following cases for audit.
-
The
audit report is heavily qualified;
-
The
business has a low turnover or profit percentage;
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The
taxpayer fails to file a timely or a correct tax returns;
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The
business records are incomplete;
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The
taxpayer omits to disclose some important information; or
-
The
industry generally does not have a good compliance.
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