On Administration of Corporate Income Tax

Report ID: 95

The objective of the audit is to gain assurance that institution subordinated to the Minister for Finance – the State Revenue Service provides administration of Enterprise Income Tax relief in accordance with the regulatory enactments in force: a) to verify if control over justified application of Enterprise Income Tax relief is provided and organized; b) to verify if tax amounts forgone the State budget as a result of application of tax relief specified by legal enactments, are accounted and reported. Also to verify if the Ministry of Finance provides development and implementation of tax policy regarding Enterprise Income Tax relief and if tax relief efficiency and benefit to the public is assessed.

A number of discrepancies were disclosed in the activity of the Ministry of Finance, providing development and implementation of tax policy, and in the activity of the State Revenue Service, providing administration of Enterprise Income Tax relief.

On Administration of Reduced Rates of Value Added Tax

Report ID: 96

The objective of the audit is to gain assurance that the State Revenue Service provides administration of reduced VAT rates: a) to verify if control over justified application of reduced VAT rates is provided and organized; b) to verify if revenue from reduced VAT rates is accounted and if forgone tax revenue, resulting from application of reduced rate, which could possibly be received if full VAT rate had been applied, is calculated.

To clarify if the Ministry of Finance provides development and implementation of tax policy regarding reduced VAT rates and if reduced tax rate’s efficiency and benefit to the public is assessed.

A number of discrepancies were disclosed in the activity of the Ministry of Finance, providing development and implementation and of tax policy, and in the activity of the State Revenue Service, providing administration of reduced VAT rate.

Discrepancies were detected in the internal control system of the State Revenue Service, providing administration of reduced VAT rates and VAT 12% compensations paid to agricultural produce manufacturers.