TAX ADMINISTRATION DIAGNOSTIC ASSESSMENT TOOL
Module 6
POA 4
TIMELY FILING OF TAX DECLARATIONS
DESIRED OUTCOME OF POA 4
DESIRED OUTCOMES
Taxpayers file their tax declarations on time.
• Tax laws and administrative rules specify who is required to file and when, and what
supporting documents are required.
• Tax declarations are the principal means by which a taxpayer’s liability is established
• Annual and Periodic returns - monthly/quarterly/annual cycles
• It is important that all taxpayers who are required to file do so at the time when it is due.
• Failure to meet filing requirement on-time may result in penalties, interest or prosecution.
• Tax declarations may be paper-based or in electronic form and may be filed by the
taxpayers themselves or their tax agent
• Strong linkage between POA 4 and POA 1 (Taxpayer register) and POA 5 (Payment)
OVERVIEW OF POA 4
• Good practice is defined on pages 63 and 64
• Key features of Filing and Declaration IT modules are in Box 5 on page 64
• Not going to cover these in this session as they are not part of TADAT scoring
• TADAT scores largely based on calculations – need to know TADAT definitions
• For measuring on-time filing rates, expected tax declarations means: the
number of declarations that the tax administration expects to receive from
registered taxpayers that are required by law to file declarations. This excludes:
(a) Unregistered taxpayers; and
(b) Non-mandatory tax declarations from taxpayers who have no legal
obligation to file - e.g. those below the declarations filing threshold
Refer Tables 4 to 11 – Pages 142 to 148
GOOD PRACTICE POA 4
• Simplifying filing requirements, including pre-filling of tax declarations
• Being proactive in reminding taxpayers of approaching deadlines
• Using automated processes to identify taxpayers who have failed to file on
time
• Timely follow-up and enforcement action tailored to history of non-filer
• Analytical techniques to support effective actions to achieve on-time filing
• Outreach programs to assist taxpayer groups and intermediaries
• Promoting use of electronic filing for all core taxes
• Having a modern ITAS that monitors and manages filing compliance
• Outcome measures rather than just output measures.
PERFORMANCE INDICATORS FOR FILING OF TAX RETURNS (POA4)
High Level Indicators
P4-13: P4-14: Use of
P4-12: On-time filing rate
Management electronic
M2 of non-filers filing facilities
M1 M1
The number of CIT The number of PIT The number of VAT The number of The number of PAYE Action taken to follow The extent to which tax
declarations filed by declarations filed by declarations filed by domestic excise tax withholding up non-filers declarations are filed
the statutory due the statutory due the statutory due declarations filed by declarations filed by electronically
date as a percentage date as a percentage date as a percentage the statutory due employers by the
of the number of of the number of of the number of date as a statutory due date as a
declarations declarations declarations percentage of the percentage of the
expected from expected from expected from number of number of PAYE
active CIT taxpayers. active PIT taxpayers. active VAT taxpayers declarations declarations expected
expected from from active employers
active domestic
excise taxpayers**
Dimensions
**Note: For TADAT purposes, domestic excise taxes focus on the categories
of goods/services that contribute 70 percent of the total domestic excise
revenue by value
SCORING P4-12-1: ON-TIME FILING RATE FOR CIT RETURNS
Total number of CIT declarations filed by the statutory due date in percent of the
total number of CIT declarations expected from registered CIT taxpayers
Number of CIT declarations filed by the due date x 100
Number of CIT declarations expected from registered CIT taxpayers
A B C D
- ALL taxpayers: - ALL taxpayers: - ALL taxpayers: The requirement
Ratio is above Ratio is above Ratio is above for a C rating or
90 percent 75 and up to 90 50 and up to 75 higher are not met
percent percent OR information
insufficient
- Large: Ratio is - Large: Ratio is - Large: Ratio is
at 100 percent at least 95 at least 90
percent percent
SCORING P4-12-2: ON-TIME FILING RATE FOR PIT RETURNS
Total number of PIT declarations filed by the statutory due date in percent of the
total number of PIT declarations expected from registered PIT taxpayers
Number of PIT declarations filed by the due date x 100
Number of PIT declarations expected from registered PIT taxpayers
A B C D
Ratio is above 90 Ratio is above 75 Ratio is above 50 The requirement
percent percent and up to percent and up to for a C rating or
90 percent 75 percent higher are not met
or information
insufficient
SCORING P4-12-3: ON-TIME FILING RATE FOR VAT RETURNS
Total number of VAT declarations filed by the statutory due date in percent of the
total number of VAT declarations expected from registered VAT taxpayers
Number of VAT declarations filed by the due date x 100
Number of VAT declarations expected from registered VAT taxpayers
A B C D
- ALL taxpayers: - ALL taxpayers: - ALL taxpayers: The requirement
Ratio is above 90 Ratio is above 75 Ratio is above 50 for a C rating or
percent and up to 90 and up to 75 higher are not met
- Large: Ratio is percent percent OR information
100 percent - Large: Ratio is at - Large: Ratio is at insufficient
least 95 percent least 90 percent
SCORING P4-12-4: ON-TIME FILING RATE FOR DOMESTIC EXCISE TAX DECLARATIONS
Number of domestic excise tax declarations filed by the statutory due date in percent of the number
of domestic excise tax declarations (DETD) expected from registered domestic excise taxpayers
Number of DETD filed by the due date x 100
Number of DETD expected from registered DET taxpayers
A B C D
- All DETD - ALL DETD - ALL DETD The requirement
taxpayers: Ratio is taxpayers: Ratio is taxpayers: Ratio is for a C rating or
above 90 percent 75 and above up 50 percent and higher are not met
to 90 percent above up to 75
- Large DETD OR information
taxpayers: Ratio is - Large DETD percent
insufficient
100 percent taxpayers: Ratio is - Large DETD
at least 95 percent taxpayers: Ratio is
at least 90 percent
SCORING P4-12-5: ON-TIME FILING RATE FOR PAYE RETURNS
Total number of PAYE withholding declarations filed by employers by the statutory
due date in percent of the total number of PAYE declarations expected from
registered employers
Number of PAYE withholding declarations filed by the due date x 100
Number of PAYE withholding declarations expected from registered employers
A B C D
Ratio is above 90 Ratio is above 75 Ratio is above 50 The requirements
percent percent and up to percent and up to for a C rating are
90 percent 75 percent not met
OR information
insufficient
SCORING P4-12 INDICATOR SCORE
• P4-12: On-time filing rate, is scored using M2 method
• M2 method is based on averaging the scores of the individual
dimensions
• It is used for multi-dimensional indicators where a low score on one
dimension does not necessarily undermine the impact of higher scores
on other dimensions of the same indicators
• Progress on individual dimensions can be made independent of each
other.
• Table 2 on pages 12 and 13 of the field guide help determine the
average score.
• For POA4-12 we use the table with five dimensions
SCORING P4-13: ACTION TAKEN TO FOLLOW UP NON-FILERS
Automated processes are Penalties are The tax administration Documented The taxpayer register
A
used to identify taxpayers automatically has dedicated filing- procedures are in is routinely updated
who have failed to file generated by the enforcement staff place and include based on the results of
declarations when due automated system for filing-enforcement the non-filer
non-filers follow-up WITHIN 7 enforcement.
DAYS OF DUE DATE
Automated processes are Penalties are The tax administration Documented The taxpayer register
B
used to identify taxpayers automatically has dedicated filing- procedures are in is routinely updated
who have failed to file generated by the enforcement staff place and include based on the results of
declarations when due automated system for filing-enforcement the non-filer
non-filers follow-up WITHIN 14 enforcement.
DAYS OF DUE DATE
Automated processes are Penalties are The tax administration Documented
C
used to identify taxpayers automatically has dedicated filing- procedures are in
who have failed to file generated by the enforcement staff place and include
declarations when due automated system for filing-enforcement
non-filers follow-up WITHIN 21
DAYS OF DUE DATE
Scoring P4-14: Use of Electronic Filing
The extent to which tax declarations are filed electronically
A B C D
- ALL taxpayers: At - ALL taxpayers: At - At least 50 The requirement
least 85 percent least 70 percent percent of for a C rating or
of declarations are of declarations are declarations are higher are not met
filed electronically filed electronically filed electronically OR information
for each of the for each of the for at least two insufficient
core taxes core taxes core taxes
- Large: All - Large: At least 80
taxpayers file percent file
electronically electronically
Total number of declarations filed electronically x 100
Total number of declarations expected from active taxpayers
Checklist of Questions and Evidence for POA 4
Reading Pages 63
to 72 of the Field
Guide
Questions –
Numbers 46 to 51