Tax enforcement issues in the light of the setting-up of the Tax Compliance Unit

Abstract

During the last few years, major emphasis was exerted on the need to improve the local tax enforcement system. Drastic improvements have been carried out in the collection of tax at source, however, given that this system is not applied across board, those outside this system were still enjoying the possibility of evading tax. With a view to forestalling such a situation, the Government has set up the Tax Compliance Unit. Nevertheless, the success of such a Unit relies heavily on the co-ordination among its counterparts. Hence, after analysing the role of tax enforcement, the dissertation examines the environment in which tax enforcement is locally applied. Subsequently, an insight is provided into the main factors leading to the Unit's establishment together with an overview of the Tax Compliance Unit's operational duties. Internationally, the effective enforcement of taxes is being attributed with a much wider role. In this light, issues such as the implications of the OECD project on Harmful Tax Practices and the pressure on the FATF to co-ordinate the Anti-Money Laundering movement with the National Tax Authorities, have also been discussed. Having set up the necessary systems and infrastructure, the government must now complement them with increased co-ordination among the revenue departments and the TCU itself While addressing effectively the local situation, and taking notice of the international development, it should simultaneously safeguard taxpayers' rights.