IMPACT OF FRAUD ON REVENUE COLLECTION
IMPACT OF FRAUD ON REVENUE COLLECTION
BACKGROUND
The legislative background & mandate of the
SRA.
➢ SRA established in terms of section 3 of the
Swaziland Revenue Act, 2008.
➢Key Function of SRA: To assess and collect all
revenue on behalf of the Government.
➢Also, SRA is tasked with taking appropriate
measures to counteract tax or revenue fraud or
other forms of tax or revenue evasion.
➢All collections to be soon sent to Govt. Account.
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WHY REVENUE COLLECTION?
So that Government can finance her
operations such as:
➢Roads and building infrastructure;
➢Education, schools, scholarships, etc.;
➢Salaries for civil/public servants;
➢Health and pharmaceutical supplies;
➢Millennium Development Goals
➢Etc.
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WHY COLLCETION BY SRA?
It’s a world standard to establish such
semi-autonomous agencies to collect
revenue on behalf of governments.
The privatization of revenue collections
gives good governance and efficiency
benefits.
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WHY COUNTERACT FRAUD?
❖ Fraud could leak already collected revenue –
e.g. fraudulent refund claims
❖Fraud can either postpone revenue collection
or revenue not collected at all.
❖Revenue targets may not be met.
❖Fraud could lead to importation of prohibited
or harmful goods into the country to the
detriment of society.
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EXAMPLES OF FRAUDS IN REVENUE
▪ Forgery/manufacturing/alteration/deletion of
documents, invoices, etc.;
▪ Falsification of financial statements (with
intention of not paying required tax or
duties); falsification of certificates of
origin/import permits/export permits;
▪ Changing of company names and
directorship with the sole purpose of fleeing
from tax liability;
▪ Etc.
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ANTI-FRAUD PROGRAMS IN SRA
➢ Documentation & Management of business processes
(to achieve consistency, certainty, minimize discretions –
process deviations could be red flags for fraud and
corruption);
➢ Systems Automation (minimize human error and keep
audit trails for operations and benefits of management
reports);
➢ Existence of adequate risk management framework (e.g.
standardized incident reporting, identification and
monitoring of risks, etc.);
➢ Existence of anti-fraud policies and their enforcement;
➢ Internal & External Audits
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……..ANTI-FRAUD PROGRAMS IN SRA
➢ Hotlines for tips
➢ Fraud & Corruption sensitizations initiatives
➢ Surprise audits
➢ Dedicated ant-fraud / corruption units
➢ Proactive data monitoring & analysis
➢ Employee background checks
Notable challenges to these control measures:
✓ Stakeholder collaboration needs enhancement
✓ Rewarding of whistle-blowers for tips still an issue
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LESSONS FROM FRAUD FIGHTING
▪ The longer the fraud remains undetected, the greater the
harm inflicted onto an organization;
▪ In 95% cases, perpetrators of fraud take efforts to
conceal the frauds through creation or altering of
documents;
▪ The most common detection methods are tips through
hotlines;
▪ The “2016 Report to the Nations” by ACFE reveals that
much as hotline tips work, but frauds uncovered through
active detection methods (i.e. surveillance, monitoring or
account reconciliation), the loss on duration of the fraud is
lower;
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EXPECTED BENEFITS FROM AFCE
The localization of AFCE is expected to have the following
benefits:
▪ Increase up-skilling of personnel through training and
education in the country
▪ Widening of the anti-fraud community in the country
▪ Reduction of fraud in business and governmental
organizations
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Thank you…