Presentation is loading. Please wait.

Presentation is loading. Please wait.

Zambia Revenue Authority Post Clearance Audit (PCA) Presentation at the Symposium on Trade Facilitation for African Countries Nairobi, Kenya 13 – 16 November.

Similar presentations


Presentation on theme: "Zambia Revenue Authority Post Clearance Audit (PCA) Presentation at the Symposium on Trade Facilitation for African Countries Nairobi, Kenya 13 – 16 November."— Presentation transcript:

1 Zambia Revenue Authority Post Clearance Audit (PCA) Presentation at the Symposium on Trade Facilitation for African Countries Nairobi, Kenya 13 – 16 November 2012 By: Reuben Kunda

2 To share information and experiences with other administrations on the set up of PCA in Zambia OBJECTIVE

3 Contents Brief History of PCA in ZambiaBrief History of PCA in Zambia Legal basisLegal basis Post Clearance Audit, what it is aboutPost Clearance Audit, what it is about Objectives of Post Clearance AuditObjectives of Post Clearance Audit Sources of AuditsSources of Audits The Compliance ModelThe Compliance Model

4 Contents Brief Audit ProcessBrief Audit Process Benefits to Customs and stakeholdersBenefits to Customs and stakeholders ConclusionConclusion

5 BRIEF HISTORY Chapter 6 of General Annex to the RKC - Customs Controls: Limited to that necessary to ensure compliance Limited to that necessary to ensure compliance Move from transaction-based to audit-based or mixed controls Move from transaction-based to audit-based or mixed controls Use risk management techniques Use risk management techniques Use traders commercial records Use traders commercial records Apply compliance measurement Apply compliance measurement Use MOUs with trade and MAAs with other Customs Use MOUs with trade and MAAs with other Customs

6 BRIEF HISTORY Introduced in 2000 under Audit & Business Risk section (ABR) with 12 staff.Introduced in 2000 under Audit & Business Risk section (ABR) with 12 staff. Now has an establishment of 30 officersNow has an establishment of 30 officers

7 LEGAL BASIS Sections 9 (general powers of an officer) - power to enter any business premises and request for documents for examination.Sections 9 (general powers of an officer) - power to enter any business premises and request for documents for examination. Section authority to enter and search of premises of licenced manufacturers and authority to seize documents.Section authority to enter and search of premises of licenced manufacturers and authority to seize documents.

8 LEGAL BASIS, Contd Section persons carrying on business to keep proper books and avail such to officers upon request.Section persons carrying on business to keep proper books and avail such to officers upon request.

9 What is PCA? A process aimed at providing assurance that businesses and individuals subject to Customs and Excise controls have complied fully with all relevant legislation and requirements through examination of internal controls, accounting systems and relevant documentation.A process aimed at providing assurance that businesses and individuals subject to Customs and Excise controls have complied fully with all relevant legislation and requirements through examination of internal controls, accounting systems and relevant documentation.

10 BACKGROUND OF PCAs Opportunities and challenges besetting international trade: Flexibility in facility set up and access to market Just In Time Increased volume and speed of international trade.

11 BACKGROUND OF PCAs Opportunities and challenges besetting international trade contd: High revenue expectations by Govt Expectations of trade for quick and efficient customs clearance.Expectations of trade for quick and efficient customs clearance. Trade Facilitation, a legitimate expectationTrade Facilitation, a legitimate expectation

12 RESPONSE BY CUSTOMS Strategies aimed at striking a balance between control and trade facilitation. Allow compliant businesses quick customs release.Allow compliant businesses quick customs release. Enhanced customs control on less/non- compliant businesses.Enhanced customs control on less/non- compliant businesses.

13 RESPONSE BY CUSTOMS Use of risk management to customs controlUse of risk management to customs control Use of audit based control called PCA.Use of audit based control called PCA.

14 Objectives of PCA Evaluate strength of clients internal controlsEvaluate strength of clients internal controls Determine clients compliance levelsDetermine clients compliance levels Assess any revenue shortfallAssess any revenue shortfall Recommend improvements in clients internal controls to assure future complianceRecommend improvements in clients internal controls to assure future compliance Client educationClient education Evaluate effectiveness of Customs controlsEvaluate effectiveness of Customs controls Recommend adjustments in Customs controls (risk targeting, procedures, legislation, etc)Recommend adjustments in Customs controls (risk targeting, procedures, legislation, etc)

15 Sources of Audits Customs Compliance StrategyCustoms Compliance Strategy –Client Segmentation LargeLarge MediumMedium SmallSmall Senior ManagementSenior Management Customs PortsCustoms Ports Clients etcClients etc

16 The Customs Compliance Model

17 BISEP Industry factors: Industry definition Region Size, segment, participants Profit margins Cost structures Industry regulation Industry issues Competition Seasonal factors Infrastructure Labour Sociological factors: Norms Reciprocity Age Gender Education level Ethnic background Economic factors: Inflation Interest rates Tax system Govt policies International influences Psychological factors: Risk Fear Trust Values Fairness/equity Opportunity to evade Business factors: Structure – sole trader, partnership, trust, Company Business activities (type) -local, inter-region, -International Financial data Business age

18 Brief Audit Process Client SelectionClient Selection Initial Risk DeterminationInitial Risk Determination Audit PlanningAudit Planning Audit ExecutionAudit Execution Audit FinalizationAudit Finalization Final Risk RatingFinal Risk Rating ReportingReporting Follow-up (Return audit)Follow-up (Return audit)

19 EXAMPLE OFAUDIT PROCEDURES & APPROACH Detailed audit plans are developed and subjected to peer reviews.Detailed audit plans are developed and subjected to peer reviews. Each audit area is approached by outlining assertions, risks and detailed tests aimed at treating identified risks.Each audit area is approached by outlining assertions, risks and detailed tests aimed at treating identified risks. Below is an example for valuation area.Below is an example for valuation area.

20

21 Audit Output Internal ReportInternal Report External ReportExternal Report Agents Advisory LetterAgents Advisory Letter Clients risk profile and risk ratingClients risk profile and risk rating Update of Incidence Register and ASYCUDA risk parametersUpdate of Incidence Register and ASYCUDA risk parameters Request for investigation (fraud cases)Request for investigation (fraud cases)

22 POST AUDIT PROCEDURES Client educationClient education Client self-assessmentClient self-assessment

23 Benefits Trade facilitationTrade facilitation Efficient use of resourcesEfficient use of resources Deterrent to non-complianceDeterrent to non-compliance Long term and comprehensive compliance management focusLong term and comprehensive compliance management focus Client educationClient education Opportunity to understand clients businessOpportunity to understand clients business

24 Benefits contd Effective implementation of the WTO Valuation AgreementEffective implementation of the WTO Valuation Agreement Promotes the self assessment strategy (voluntary compliance).Promotes the self assessment strategy (voluntary compliance). Provides feedback to customs ports to assist them in their risk profiling.Provides feedback to customs ports to assist them in their risk profiling.

25 Conclusion contd Customs is facing the following challenges: Increasing trade volumesIncreasing trade volumes Limited resource baseLimited resource base Increasing government and public expectationsIncreasing government and public expectations Declining duty ratesDeclining duty rates Increasing exemptionsIncreasing exemptions

26 Conclusion Effective and efficient utilisation of WCO best practice instruments such as risk and audit based controls among others, is the only panacea to handling the ever increasing and complex business environment.Effective and efficient utilisation of WCO best practice instruments such as risk and audit based controls among others, is the only panacea to handling the ever increasing and complex business environment.

27


Download ppt "Zambia Revenue Authority Post Clearance Audit (PCA) Presentation at the Symposium on Trade Facilitation for African Countries Nairobi, Kenya 13 – 16 November."

Similar presentations


Ads by Google