{"id":690,"date":"2023-10-12T13:07:22","date_gmt":"2023-10-12T13:07:22","guid":{"rendered":"http:\/\/audit.gov.ms\/?p=690"},"modified":"2023-10-12T13:07:22","modified_gmt":"2023-10-12T13:07:22","slug":"the-inland-revenue-division-government-of-montserrat","status":"publish","type":"post","link":"http:\/\/audit.gov.ms\/?p=690","title":{"rendered":"The Inland Revenue Division, Government of Montserrat"},"content":{"rendered":"\n<p>The Office of the Auditor General is pleased to announce that its report entitled <strong><em>Performance Audit of the Inland Revenue Division: <\/em><\/strong><strong><em>Governance, Efficiency, Effectiveness &amp; Quality of Service<\/em><\/strong> was presented to the Legislative Assembly on September 29<sup>th<\/sup>, 2023.&nbsp; &nbsp;It assessed the administration of the major types of taxes in Montserrat including tax-assessments, tax-collection and tax-refunds.<\/p>\n\n\n\n<p><strong>Background: <\/strong>The I.R.D. is mandated by the M.C.R.S. (Enabling) Act No. 6 of 2017 to collect several direct taxes (e.g., Income Taxes, taxes on business profits, Property Taxes, Insurance Levy, Bank Levy, and Hotel Levy) and fees on behalf of the GOM.&nbsp; The M.C.R.S., including the I.R.D., contributes over 80% of the GOM\u2019s local revenues and is thus vital to public budgets &amp; the economy.<\/p>\n\n\n\n<p><strong>Key Findings:<\/strong><\/p>\n\n\n\n<ul>\n<li><strong>The Inland Revenue Department (I.R.D.) has a satisfactory governance framework and oversight for its operations.&nbsp; &nbsp;<\/strong>The I.R.D. is a division within the M.C.R.S. which reports to the Ministry of Finance &amp; Economic Management on its operations and on the results of all matters of taxation.&nbsp; Generally, good internal controls are in place as the I.R.D. ensures that there is clear and consistent segregation of duties within its staff.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>Large and growing backlog of tax-assessments and tax-refunds.<\/strong>&nbsp; &nbsp;Consistent large return processing backlogs over the past decade highlight how dramatically tax-payers are impacted as this essential process continues to falter.&nbsp; The number of returns filed each year for the past five years has decreased by 23%. &nbsp;For tax-refunds, the lag is up to 6 years; priority is on the oldest items, except in medical cases.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>Tax-payers files tax-returns on paper and in person<em>.<\/em><\/strong> The I.R.D. relies heavily on its staff to process all paper submissions.&nbsp; Accumulation of decades of paper-forms and physical taxpayer files poses risks to employees\u2019 health and to the quality and security of files. These archaic modes of paper-forms and manual processes are very inefficient to the I.R.D. and inconvenient to tax-payers. Surveyed taxpayers gave instances that they submitted documents to the I.R.D and they were misplaced or lost; in other cases, tax-payments were made but not applied to taxpayers\u2019 accounts, or were incorrectly applied.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>The actual taxable population is unknown<em>. <\/em><\/strong>Contributing factors include: outdated client-records, unrecorded deaths, emigration, changes of address, changes of employer, new businesses\/employees not registered with the I.R.D., and inadequate communication with tax-payers.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>The Tax Advisory Board and the Montserrat Customs &amp; Revenue Commissioners rarely function<\/strong>.&nbsp;&nbsp;Meetings are very infrequent and there is no evidence that minutes are formally kept. The Board secretaries average 1 to 2 times per year for meetings held.&nbsp; The two entities are responsible for advising the GOM on tax-matters and for adjudicating taxpayers\u2019 appeals of I.R.D. assessments, respectively. &nbsp;&nbsp;Contrary to the law, these Committees have not been reporting regularly.<\/li>\n<\/ul>\n\n\n\n<p><strong>Key Recommendations:<\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Strengthen the I.R.D\u2019s efficiency and revenue capacity.<\/strong>&nbsp; The MCRS should advocate through the Financial Secretary and the Minister of Finance for the soonest equipping of the IRD\/MCRS with a Compliance Unit and a Legal Unit.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>Urgently reduce the backlog of tax-assessments &amp; tax-refunds. <\/strong>The I.R.D. should design and implement clear milestones to reduce the backlogs much faster; this should also be reported to the public to boost accountability and transparency. Shift the focus from stopgap measures to choosing methods\/technologies sustainable and suitable for Montserrat\u2019s tax population.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>Enhance the I.R.D\u2019s accountability and transparency at all levels. &nbsp;&nbsp;<\/strong>For example, the I.R.D. should (a) convene a regular forum with businesses, acting on their feedback, (b) use multiple channels of communication with individual tax-payers and the public, improving their knowledge of tax-laws and procedures, while addressing queries, concerns, and complaints, and (c) report to the public each year on its performance and progress. This would extend the I.R.D\u2019s\/M.C.R.S\u2019s transparency beyond the annual financial audits reported to the Legislative Assembly.<\/li>\n<\/ul>\n\n\n\n<p>The full audit report highlights several other findings and recommendations.\u00a0 Their implementation will bring significant improvements in client-services and the management and administration of taxes and tax-refunds, and boost their long-term contributions to Montserrat\u2019s public services, society, workforce, &amp; economy.<\/p>\n\n\n\n<p><strong>The report in its entirety can be found at the Montserrat Public Library, on the Office of the Auditor General\u00a0<a href=\"http:\/\/audit.gov.ms\/?page_id=19\">Publications Page<\/a>\u00a0or by requesting an electronic copy from the Office of the Auditor General, located upstairs Angelo\u2019s Complex, Brades. E-mail:\u00a0<\/strong><a href=\"mailto:audit@gov.ms\"><strong>audit@gov.ms<\/strong><\/a><strong>; Telephone: (664) 491 \u2013 3460 or 491 \u2013 4569.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Office of the Auditor General is pleased to announce that its report entitled Performance Audit of the Inland Revenue Division: Governance, Efficiency, Effectiveness &amp; Quality of Service was presented to the Legislative Assembly on September 29th, 2023.&nbsp; &nbsp;It assessed the administration of the major types of taxes in Montserrat including tax-assessments, tax-collection and tax-refunds. [&hellip;]<\/p>\n","protected":false},"author":1001003,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts\/690"}],"collection":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/users\/1001003"}],"replies":[{"embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=690"}],"version-history":[{"count":1,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts\/690\/revisions"}],"predecessor-version":[{"id":691,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts\/690\/revisions\/691"}],"wp:attachment":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=690"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}