Inland Revenue Department

1
Inland Revenue Department Assess First Audit
Later (AFAL) System 11 April 2000
2
Agenda

• Background
• System Objectives
• Current Environment / Areas of improvement
• Proposed System functions
• Anticipated Benefits
• Implementation Plan
• Q A

3
Background

• One of the projects under the 5-year ISS Plan
• Feasibility study completed in March 2000
• Planned to be developed in 2000-01

4
System Objectives

• Capture return data directly
• Automate the screening of tax returns
• Facilitate the identification of potential high
  yield cases for tax audit and investigation
• Provide effective means for tax compliance
  measurement

5
Current Environment

• Issue of over 2 million tax returns annually
• Manual screening and examination of tax returns
  before capturing for assessment
• Little system support in identifying cases for
  tax audit and investigation
• No comprehensive measurement of tax compliance

6
Proposed System Functions

• Direct capturing of returns data for both paper
  and electronic returns
• Automatic screening of tax returns
• Automatic release of assessments fulfilling
  pre-set criteria
• On-line examination of suspended cases

7
Proposed System Functions

• Selection of tax audit cases by pre-defined
  criteria
• Provision of what-if analysis for setting and
  refining selection criteria
• Recording and analysing results of tax audit and
  investigation cases
• Compliance measurement in selected areas

8
System Platform
Mainframe Midrange

• Mainframe - Return screening
• Mid-range - Other functions

9
Anticipated Benefits

• Manpower saving in return screening and
  assessment processing
• Devotion of more professional staff effort to tax
  audit work
• Additional revenue from better tax audit cases
  selection

10
Anticipated Benefits

• Improvement in the quality of return screening
  and case selection for tax audit by means of
  quantifiable criteria
• Tax compliance measurement will enable the
  management to
• monitor general compliance level
• set enforcement strategy

11
Implementation Plan

• Implement by phases
• Phase 1
• Major functions to be rolled out in April 2001
• Full implementation in January 2002
• Phase 2
• To be developed in 2003/04

12

• Q A

13
Thank you