EFFECT OF REVENUE

GENERATION ON TAX
AUDITING AND
INVESTIGATION IN
DEVELOPING ECONOMY.
- Tooba Ali
AGENDA

Introduction

Effects of Revenue Generation

Recommendations

Summary

PRESENTATION TITLE 2
INTRODUCTION

Revenue generation is essential for

developing economies to fund their
development priorities. Tax auditing and
investigation play a crucial role in revenue
generation by deterring tax evasion and
ensuring that taxpayers comply with their tax
obligations.

3
EFFECT OF
REVENUE
GENERATION
 POSITIVE EFFECTS OF REVENUE GENERATION

•Increased resources for tax enforcement: Increased revenue from tax collections can provide tax
authorities with more resources to invest in tax auditing and investigation. This can lead to a more
effective and efficient tax enforcement regime.
•Improved public perception of tax authorities: When tax authorities are seen to be effective in
collecting taxes, it can improve public confidence in the government and its ability to deliver public
services. This can lead to increased tax compliance and reduced tax evasion.
•Greater political support for tax enforcement: Increased revenue from tax collections can also
lead to greater political support for tax enforcement measures. This can be important in developing
countries, where tax authorities often face resistance from powerful interest groups.

PRESENTATION TITLE 5
 NEGATIVE EFFECTS OF REVENUE GENERATION

•Focus on short-term revenue goals: In some cases, governments may focus on short-term
revenue goals at the expense of effective tax enforcement. This can lead to tax authorities being
pressured to audit and investigate taxpayers more aggressively, even if there is no evidence of
wrongdoing.
•Corruption: In developing countries, tax authorities are often vulnerable to corruption. This can
lead to tax audits and investigations being used to target political opponents or businesses that
refuse to pay bribes.
•Lack of capacity: Tax authorities in developing countries often lack the capacity to effectively
audit and investigate all taxpayers. This can lead to tax audits and investigations being
concentrated on a small number of taxpayers, typically large businesses or foreign investors.
PRESENTATION TITLE 6
RECOMMENDATIONS FOR IMPROVING TAX AUDITING
AND INVESTIGATION IN DEVELOPING ECONOMIES

•Governments should invest in building the capacity of tax authorities to audit and investigate
taxpayers effectively. This includes providing adequate resources and training for tax auditors and
investigators.
•Governments should establish clear and transparent guidelines for tax audits and
investigations. This will help to reduce the risk of corruption and abuse of power.
•Governments should promote public awareness of tax laws and the importance of tax
compliance. This will help to create a culture of tax compliance and reduce the need for aggressive
tax enforcement.
•Governments should work with the private sector to develop mechanisms for voluntary tax
compliance. This can reduce the need for tax audits and investigations and improve the overall
efficiency of the tax system. PRESENTATION TITLE 7
SUMMARY
Overall, the effect of revenue generation on tax auditing and
investigation in developing economies is mixed. On the one
hand, increased revenue can provide tax authorities with more
resources and political support to improve tax enforcement.
On the hand, governments may focus on short-term revenue
goals at the expense of effective tax enforcement, and tax
authorities may be vulnerable corruption and lack of capacity.

PRESENTATION TITLE 8
THANK YOU
-Tooba Ali

PRESENTATION TITLE 9