The tax risk management system conceptualization: strategic goals and directions of reforming the State Tax Service of Ukraine

Serhii Brekhov
PhD in Economics, Deputy Director for Scientific Work in Research Institute of Fiscal Policy – Head of the Research Center for Taxation Problems and Financial Law, University of State Fiscal Service of Ukraine, e-mail: sergbr78@gmail.com, ORCID ID: https://orcid.org/0000-0002-4141-3210

Cite this article:

Brekhov, S. (2019). The tax risk management system conceptualization: strategic goals and directions of reforming the State Tax Service of Ukraine. Ed.: M. Zvieriakov (ed.-in-ch.) and others [Kontseptualizatsiia systemy upravlinnia podatkovymy ryzykamy: stratehichni tsili ta napriamy reformyvannia Derzhavnoi Podatkovoi Sluzhby Ukrainy; za red.: М. I. Zvieriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 2-3 (70-71), pp. 106-117.

Abstract

The article is devoted to actual issues of the State Tax Service of Ukraine reforming for creation a comprehensive tax risk management system in view of the basics of risk theory, risk management standards, global trends and specific features of domestic tax administration. The article focuses on the concretization of specific areas of work with tax risks, taking into account the expert evaluation by the TADAT methodology. The strategic approaches of tax authorities to increase the level of compliance by taxpayers with tax rules, as well as the interdependence of instruments to counteract of the tax risks are presented. It is proved that the differential approach application requires the creation and functioning of tax risk monitoring, the level of taxpayer risk determining, as well as a high level of communication with taxpayers to minimize tax risks in order to be able to minimize the number of tax violations through non-audit measures and service functions. The ways of responding to the risks of non-compliance with tax legislation are defined. Performed analysis of relevant indicators for key areas of tax risk management performance assessing allowed determining the priority directions for integrated tax risk management system development regarding non-compliance by taxpayers with tax legislation in the State tax service of Ukraine activity in accordance with modern international best practice. It is noted that the level and effectiveness of tax risk management largely depends on the level of analytical work and provides for identification stages, analysis, evaluation (measurement), and ranking. Recommendations for the TADAT assessment are presented, which indicate that the main steps for working with risk information are: environmental testing, analysis of audit data, third-party data, taxpayer behavior, cross-border trade research on the application of tax evasion schemes, the shadow economy.

Keywords

tax risks; budget losses; taxpayers monitoring; compliance with tax laws; risks management system; tax risks assessment.

JEL classification: H260; DOI: https://doi.org/10.33987/vsed.2-3(70-71).2019.106-117

UD classification: 336.225

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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