Value added tax(VAT) is imposed on taxpayers before income tax. It implies that VAT policy is important to prevent the tax evasion. Tax audit is one effective policy to induce taxpayers' compliance. It is positively evaluated that the ratio of tax aud...
Value added tax(VAT) is imposed on taxpayers before income tax. It implies that VAT policy is important to prevent the tax evasion. Tax audit is one effective policy to induce taxpayers' compliance. It is positively evaluated that the ratio of tax audit in VAT has been increased in these days.
We illustrate the policy direction on tax audit in VAT. First, the selection of taxpayers for tax audit should be transparent and systematic to induce more tax compliance. Second, the ratio of taxpayers for tax audit should be increased to decrease the level of tax evasion. Third, the information related to tax audit should be open to the public, which includes the ratio of taxpayers for tax audit, evaded amounts by industry and occupation.