Need for a Risk-Focused Approach in Tax Control

Abstract

The article analyzes the effectiveness of the tax audits over a number of years conducted by the FTS throughout the Russian Federation, as well as the regional audits conducted by the Irkutsk region Department of Russian Federal Tax Agency. Cameral tax audits are noted to be less efficient in comparison with field tax audits. The need for the increased capacity of cameral tax audits based on the risk-focused approach is proved. This approach in tax administration will allow to implement the tasks of the Government's tax policy, namely to increase efficiency of tax audits and to reduce the number of field tax audits. Practice in the application of the risk-focused approach takes place during the pre-inspection analysis when selecting the objects for field tax audits. The criteria for tax risks assessment are considered. Based on the study of the tax audit activities, the following is suggested: the ways to enhance cameral audits through the use of indirect methods of defining tax bases, analysis of financial and economic activities of taxpayers, the use of differentiation of taxpayers and identification of priority groups.