In tax as in compliance: what has no evidence did not happen. A business that keeps its documents in order finishes an audit in days; another spends weeks hunting for a single piece of paper.
1 Books and records
- Proper accounting books reflecting transactions with their dates and supporting documents.
- Sales and purchase invoices and credit and debit notes.
- Contracts and agreements and import and export documents.
- Returns filed, payment receipts and correspondence with the Authority.
- Retention for the statutory period in a form that can be retrieved on request.
A file for every period
Give each return a file containing the reports extracted from the system, the reconciliation memo, a copy of the return, the payment receipt, and any exceptional treatment with its justification. That file cuts a later audit down to hours.
2 The audit, assessment and objection cycle
Request for information
The Authority asks for documents or explanations
Audit
Review of returns and documents
Assessment
The Authority’s determination of what is due, notified to the taxpayer
Objection
Within the statutory period, with supporting documents
Settlement or escalation
Through the prescribed appeal channels
Each stage has a statutory deadline — missing it can forfeit the right to object
Statutory deadlines do not wait
A day’s delay in objecting can mean accepting the assessment as it stands. Set a reminder the moment any notice from the Authority arrives, work out the last day to respond, and put it in the calendar.
3 The most common mistakes
| Mistake | Its effect | Preventive control |
|---|---|---|
| Deducting input tax on an invoice missing particulars | Deduction rejected on audit and an amount becomes due | Check the invoice particulars before posting and paying |
| Deducting tax on excluded items | Adjustment and an additional assessment | A list of non-deductible items in the chart of accounts |
| Reporting a supply in the wrong period | Differences between periods and possible penalties | Control the date of supply in the system and reconcile monthly |
| Failing to withhold tax on payments to a non-resident | Bearing the tax and the penalty | Review every foreign supplier before payment |
| Not issuing a credit note on a return of goods | Output tax higher than reality | Link the returns process to automatic issuance of the note |
| Late filing or payment | Penalties prescribed by law | An obligations calendar with reminders and a backup for each task |
4 Internal controls that protect you
| Step | Owner |
|---|---|
| Reconcile total sales in the system with the general ledger | Accountant |
| Review rejected or incomplete invoices | Accountant |
| Test a sample of the purchase invoices deducted | Senior accountant |
| Confirm returns and notes have been processed | Accountant |
| Review payments to non-residents during the period | Finance manager |
| Approve the return before filing | Finance manager |
| Archive the complete file after payment | Accountant |
A simple list like this, signed off each period, prevents most findings and proves on audit that the business has a disciplined procedure rather than individual improvisation.
5 Voluntary correction
If you discover an error in an earlier return, the right course is to correct it on your own initiative through the prescribed procedure rather than waiting for it to be found on audit. Coming forward usually carries a lighter consequence, shows the business’s good faith, and stops the error compounding into later periods.
Chapter 1 summary
- Compliance starts with the daily entry, not with filling in the return.
- A file for each period shortens an audit and guards against forgetting.
- Every stage of audit and objection has a statutory deadline that does not wait.
- Most mistakes are recurring and well known, and each has a simple preventive control.
- Finding and correcting an error yourself beats waiting for the audit.
6 Test yourself
Three quick questions
Choose the answer you think is correct — the result appears immediately.
1. A business discovers an error in an earlier return. What is best?
Waiting compounds the error and increases its effect; coming forward shows good faith and stops the repetition.
2. An assessment notice arrives from the Authority. The first step?
The right to object is tied to a statutory period, and letting it lapse can mean accepting the assessment as it stands.
3. What is the most suitable control to prevent forgetting to withhold tax on a foreign supplier?
A preventive control at the point of payment is more effective than general training or a late review after the transfer.