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18.02.2020

Desk audit to improve business efficiency

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The State Revenue Committee has answered the topical business issues, inbusiness.kz reports.

The experts discussed the actual issues on the application of norms of the tax legislation of RK when conducting the desk audit during the conference "Issues of tax and customs administration" in Almaty.

On September 2, 2019, Kazakhstan introduced a moratorium on inspections of small businesses exemption from taxes for SMEs for three years. According to Anuar Suleimenov, the official of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan, the role of desk audit becomes particularly important. As it is known, the purpose of the audit control is to give the right to the taxpayer to eliminate violations on their own, if there were penalties against him. This makes it possible to reduce tax audits.

"Each year the emphasis is placed on the independent elimination of violations by sending notices of the desk audit. Last year, taxpayers eliminated discrepancies by KZT 1 trillion 854 billion, resulting in taxes in the amount of KZT 317 billion. The analysis of violations shows that the main emphasis of sent notices falls on the taxpayers in the trade sphere. The number of notices is 86,000," Anuar Suleimenov said.

According to the head of the department, the largest amount of revenue falls on large business entities. They have received KZT 126 billion. At the same time, small business taxpayers come in second place with KZT 110 billion. 

At present, the desk audit has become an instrument to remind taxpayers to submit declarations and a means of detecting tax evasion and understatement of income. An example of this is the existence of mutual settlements with rogue firms, overstatement of expenses without supporting documents, etc. With the development of digitalization in Kazakhstan, the sources for desk audits are also growing. In particular, since the beginning of 2019, fiscal cheques, online invoices, subsidies, electronic invoices, exports within the framework of the Eurasian Economic Community, etc. have been used. As a result, the number of violations in 2019 increased three times compared to 2018 and five times compared to 2017. As the number of violations increased, so did the number of notifications sent. Compared to 2017, the number of violations increased threefold, and compared to 2018, it doubled.

"Every year we carry out the optimization of fiscal administration, calibration, and construction of remote control. As a result,  we sent 380,000 notifications, 118,000 (42%) of them resulted in the elimination of violations for the amount of KZT 1.8 million. Under 7 thousand notices or 27% of cases, taxpayers provided explanations, which are later used for a desk audit. Accordingly, it is also possible to issue notices to counterparties on discrepancies. 12%, or 33,000, taxpayers ignored the notifications, and appropriate measures were taken to them," Anuar Suleimenov said.

He explained that often discrepancies are observed in the VAT, quarterly prognostic model, and individual income taxes. In 2019, about 200,000 notifications (74% of the total number) were sent on these types of taxes for the number of violations of KZT 4.7 trillion. The main amount accrued by taxpayers on VAT amounted to KZT 139 billion, on CIT - KZT 109 billion.

Practice and complaints

Anuar Suleimenov noted that the practice of dealing with complaints of desk audit cannot be ignored. In 2019, 897 complaints were filed. 74 complaints were considered in favor of taxpayers. 12 complaints out of 267 complaints were considered in favour of taxpayers. The rest of the complaints were considered in favour of the tax authorities. Most of the complaints were filed by counterparties of the taxpayers, 31% of registered complaints were recognized invalid. In the second place - the complaints of contractors, whose transactions are invalidated by the court, it is 12%.

"The statistics on complaints have puzzled us.  It is necessary to reduce the number of complaints, and this can be done by reviewing the individual processes of the desk audit. The working group is discussing the templates and procedures for desktop audits. Such discussions will result in appropriate adjustments," he said.

We have introduced several amendments to the Tax Code this year taking into account suggestions from taxpayers and members of the Kazakhstan Taxpayers Association. In particular, the decision on non-fulfillment of notices, approved by the order of the Minister, is made within five days, while previously the deadline for issuing was not provided. This enables the taxpayer to eliminate violations without seizing bank accounts. In addition, taxpayers have the right to appeal against decisions on the execution of notices within five working days. An amendment regarding the extension of the term from five to 10 working days has been prepared as part of this draft. The draft law is under consideration. The right to submit a petition of a taxpayer for a decision of the missed term has also been granted. Also, when filing complaints about decisions before consideration of the complaint, no tax audits will be appointed.

We have prepared amendments to the abovementioned order of the Minister, according to which the decision on the recognition of the notice as non-executed will be made by the state authorities of state income within five working days from the date of providing an explanation or submission of tax returns. This gives the taxpayer the right to eliminate the violation in full before the expiration of the notice. This draft order is submitted to the Ministry of Justice for consideration.

"It should be noted that in order to avoid criticism of the taxpayers for 2020, we propose to create a commission of representatives of the Antimonopoly Committee, Atameken NCE RK, Revenue State Committee. We have already sent the corresponding proposal. Each year the Committee works on improvement of the system of the desk audit. This allows us to create more comfortable conditions for taxpayers, reduce corruption risks and ensure revenue to the state budget. The State Revenue Committee intends to continue its work," he concluded.

Mariya Galushko

Read more https://inbusiness.kz/ru/news/kak-kameralnyj-kontrol-povysit-effektivnost-biznesa

«...Domestic business, the so-called national bourgeoisie, should be supported in every possible way, and those who prevent its development by unreasonable inspections, extortions, raids should be strictly punished...»

Statement from the President of Kazakhstan Kassym-Jomart Tokayev at an enlarged meeting of the Government on 15 July 2019

Zhursunov R.M.

Ombudsman for the Protection of the rights of Entrepreneurs of RK

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