Receipts comprise both revenue and non-revenue receipts. While most organisations have very limited revenue receipts, non-revenue receipts transactions are common in most organisations. Revenue receipts constitute large proportion of plan outlay and long-term financial sustainability of a country is dependent largely on the extent to which a country can meet its plan outlay from its internal revenue resources. Long-term financial sustainability and ability to meet at least the recurrent expenditure being the fundamental financial management principles and requirement of Bhutan, it is imperative that the agencies responsible for receipts management are able to strengthen and promote high level of financial resources management accountability.
Government revenue can broadly be classified into Tax Revenue and Non-Tax Revenue. Tax revenue comprises of Direct Tax and Indirect Tax. Direct tax includes Corporate Income Tax, Business Income Tax, Personal Income Tax and Other Tax revenue (e.g., Motor vehicle Tax, Health Contribution, Royalties, etc.). Indirect tax includes Sales Tax, Excise Duties, Custom Duties, and other Indirect Tax revenue. Non-Tax revenues are Administrative fees and charges, dividends, revenue from government departments, capital revenue, interest on loan from corporations, and other non-tax revenue.
Receipts management, in particular revenue receipts encompass elements like revenue forecasting and budgeting, collections, recording, depositing, remittances, reconciliation and accounting. The detailed procedures are outlined in the Revenue Accounting Manual (RAM) for the government agencies.
The objective of assessment of Receipts Management and Controls is to ascertain the extent to which the organisations responsible for collecting government receipts have established and complied with the systems and procedures. It is also to ascertain that the organisations assess and collect receipts properly and on a timely basis, maintain accurate records and deposit or remit the collections to the designated accounts and/or authorities promptly and intact.
The auditor verifies, observes, compares and ascertains the compliance of each main indicator and sub-indicator against specific criteria derived from RAM and applicable laws, rules, regulations and other relevant documents.
The main indicators and sub-indicators to assess and evaluate the receipts management and control are given in Table – 3.
|Sl. No.||Main Indicators||Sub-Indicators|
|1||Revenue Budget/Forecast (only to DRC)||i. Existence|
|2||Tax Assessment (only to DRC)||i. Desk Assessment
ii. Field Assessment
|3||Tax Appeal||i. Formation of Appeal Committee
ii. Speed of settlement
|4||Revenue Collection||i. Control on Collection
ii. Control on Receivables
iii. Control on Money Receipts
|5||Recording, Accounting and Remittances||i. Classification and Recording
iii. Periodic Reconciliation
|6||Revenue Reporting||i. Statement of Collections and Deposits
ii. Outstanding Revenue Statement
|7||Recording and Accounting of Non-revenue Receipts and Refunds||i. Non-revenue Receipts
ii. Recording of Non-revenue receipts
iii. Refundable Deposits
iv. Release and refund of Refundable Deposits