| Score | Minimum requirements for scores |
|---|---|
19.4. Revenue arrears monitoring |
|
| A | The stock of revenue arrears at the end of the last completed fiscal year is below 10 percent of the total revenue collection for the year, and the revenue arrears older than 12 months are less than 25 percent of total revenue arrears for the year. |
| B | The stock of revenue arrears at the end of the last completed fiscal year is below 20 percent of the total revenue collection of the year and the revenue arrears older than 12 months are less than 50 percent of total revenue arrears for the year. |
| C | The stock of revenue arrears at the end of the last completed fiscal year is below 40 percent of the total revenue collection for the year and the revenue arrears older than 12 months are less than 75 percent of total revenue arrears for the year. |
| D | Performance is less than required for a C score. |
Coverage
CG.
Time period
Dimension 19.1 and 19.2: At time of assessment.
Dimension 19.3 and 19.4: Last completed fiscal year.
Measurement guidance
A government’s ability to collect revenue is an essential component of any PFM system. It is also an area where there is direct interaction between individuals and enterprises on the one hand and the state on the other. The government must provide those responsible for providing revenues with a clear understanding of their rights and obligations as well as the procedures to be followed in seeking redress, while ensuring that mechanisms are in place to enforce compliance.
Dimension 19.1 assesses the extent to which individuals and enterprises have access to information about their rights and obligations, and also to administrative procedures and processes that allow redress, such as a fair and independent body outside of the general legal system (ideally a “tax court”) that is able to consider appeals.
Dimension 19.2 assesses the extent to which a comprehensive, structured and systematic approach is used within the revenue entities for assessing and prioritizing compliance risks. Modern revenue administration relies increasingly on self-assessment and uses risk-based processes to ensure compliance. Resource constraints are likely to dictate that revenue administration processes are focused on identifying payers and transactions with the largest potential risk of noncompliance. An efficient risk management process contributes to minimizing evasion and irregularities in revenue administration as well as lowering the cost of collection for revenue collecting agencies and cost of compliance for payers. The assessors should consider the use of risk management process in registration, filing, payment, and refunds of tax, customs, social security payments. They should comment on the efficiency of these processes. The assessment should also look into the mitigation measures in place such as audits, investigations, transfer pricing controls, and outreach activities/communication.
Dimension 19.3 assesses whether sufficient controls are in place to deter evasion and ensure that instances of noncompliance are revealed. Sound audit and fraud investigation systems managed and reported on according to a documented compliance improvement plan must be in place to ensure that once risks have been identified, there is follow-up to minimize revenue leakage. More serious issues of noncompliance involve deliberate attempts at payment evasion and fraud. This may involve collusion with representatives within a revenue administration. The ability of the revenue administration to identify, investigate, successfully prosecute, and impose penalties in major evasion and fraud cases on a regular basis is essential for ensuring that payers comply with their obligations. This dimension assesses use of audits and fraud investigations managed
