Commission needs proper accounting system to record tax income

National

The Internal Revenue Commission had no proper accounting system to record daily tax revenue, collection and transfers in 2014, according to the Auditor-General’s Report for 2016.
Ironically, the objective of the IRC is to raise revenue for the Government from taxes imposed on income that is liable to be taxed under the taxation laws it administers. Auditor-General Philip Nauga said the IRC kept several major bank accounts, including administration bank account, national GST trust bank account, provincial GST/inland trust bank account, GST refunds drawing bank account, and national government drawing bank account.
“There was no proper accounting system to record the daily tax revenue collection and transfers. Revenue collections and transfer were manually recorded in excel spreadsheets,” he said.
“The bank reconciliation reports were reconstructed from the bank statements. The cash-at-bank balances at the end of the year reported were not the same amounts coming from the cash book.
“Instead, the commission reported the bank statements’ ending balances. Cash book and summary schedules were not in agreement with the financial report figures.
“As a result, it was difficult to identify whether all receipts received were deposited on a timely manner.
“The preparations/processes of the bank reconciliations were not proper and correct. (There was) lack of audit trail and difficulty in identifying the correct source documents.” Nauga said he recommended to the IRC to adopt a proper accounting system to record and account each transaction of the revenue receipts and transfers.
“In addition, the amounts reported in the financial report should come from the commission’s cash book and not from the bank statements.”