Risk Assessment for Tax Clearance process of Internal Revenue Commission, Papua New Guinea
1. Preliminary Information Gathering
2. Compliance History Review
- Access taxpayer's account records.
- Identify any unpaid taxes or penalties.
- Verify amounts against payment history.
- Document any discrepancies or issues.
- Notify taxpayer about outstanding liabilities.
- Gather reports from past tax audits.
- Analyze findings and recommendations.
- Check for any repeated issues.
- Summarize outcomes for internal review.
- Prepare follow-up actions if necessary.
- Review payment history for deadlines.
- Identify missed or late payments.
- Evaluate reasons for non-compliance.
- Consult with taxpayer if needed.
- Document compliance status and next steps.
3. Risk Identification
- Research the specific industry regulations and compliance requirements.
- Categorize businesses by size (e.g., small, medium, large) and assess risk levels.
- Examine ownership structures for complexity (e.g., sole proprietorships vs. corporations).
- Gather data on industry trends affecting tax compliance.
- Review financial statements and transaction records for discrepancies.
- Identify trends that deviate from typical business operations.
- Monitor for large or frequent transactions that lack justification.
- Utilize data analytics tools to flag anomalies in transactions.
- Compile a history of past audits or examinations by the tax authority.
- Assess the outcomes of previous disputes, including penalties or settlements.
- Identify recurring compliance issues that led to legal challenges.
- Consult legal records for any unresolved tax-related litigation.
4. Risk Analysis
- Review taxpayer's financial history.
- Analyze compliance with tax regulations.
- Consider any prior audit outcomes.
- Examine taxpayer's industry and operations.
- Assess overall financial stability.
- Use established criteria for classification.
- Compare taxpayer's profile with benchmarks.
- Involve cross-functional teams for insights.
- Document rationale for classification decision.
- Update classifications as new data emerges.
- Identify consequences of non-compliance.
- Assess financial penalties and legal risks.
- Consider reputational damage to the taxpayer.
- Analyze the effect on revenue collection.
- Document findings for future reference.
5. Mitigation Strategies
- Identify specific risks associated with tax clearance.
- Assess the impact and likelihood of each risk.
- Create targeted strategies to reduce or eliminate risks.
- Implement risk management frameworks and procedures.
- Review and adjust strategies regularly for effectiveness.
- Analyze the compliance issues thoroughly.
- Provide clear guidelines for rectification steps.
- Suggest timelines for compliance improvements.
- Offer resources or support for compliance assistance.
- Encourage open communication for ongoing compliance.
- Determine the need for follow-up based on risks.
- Schedule audits to assess compliance post-rectification.
- Communicate the audit process and expectations clearly.
- Prepare audit tools and checklists for consistency.
- Document findings and provide feedback for further action.
6. Final Assessment and Decision
- Gather data from previous assessments.
- Organize findings by relevant categories.
- Include supporting documents and evidence.
- Summarize key points for clarity.
- Ensure accuracy and completeness of information.
- Assess compliance with tax obligations.
- Evaluate financial records and documentation.
- Consider any outstanding issues or disputes.
- Provide a clear recommendation based on findings.
- Indicate any conditions for clearance approval.
- Outline steps taken during assessment.
- Record reasoning for each decision made.
- Include references to relevant laws and guidelines.
- Ensure transparency in the decision process.
- Prepare for potential review or audit.
7. Communication
- Summarize the assessment results clearly.
- Highlight any discrepancies or issues identified.
- Specify required actions the taxpayer must take.
- Use clear, non-technical language.
- Ensure the communication is documented.
- Outline specific deadlines for each action.
- Include a timeframe for expected responses.
- Communicate any potential delays in resolution.
- Ensure the timeline is realistic and achievable.
- Provide updates if timelines change.
- Designate a specific individual or team.
- Provide contact details (phone, email).
- Encourage direct communication for clarity.
- Ensure the contact is knowledgeable about the process.
- Reinforce availability and willingness to assist.
8. Follow-Up
- Determine frequency of reviews.
- Assign responsible personnel for follow-ups.
- Document findings from each review.
- Communicate results to relevant stakeholders.
- Adjust recommendations based on review outcomes.
- Set up alerts for significant changes.
- Regularly review taxpayer's financial conditions.
- Track any legal or regulatory changes.
- Engage in open communication with the taxpayer.
- Document any changes and their implications.
- Ensure all data is current and accurate.
- Revise risk assessments based on new information.
- Maintain comprehensive documentation of updates.
- Communicate changes to all relevant parties.
- Review and adjust risk management strategies accordingly.
Use in Manifestly