Improving corporate income tax control: a regional aspect

SHelepova Natal'ya Vasil'evna PhD in Technical Science Associate Professor, Department of Finance, Amur State University 675027, Russia, Amur region, Blagoveshchensk, Ignatievskoe str., 21 natasha_she@inbox.ru

Medved'ko Anastasiya Sergeevna Bachelor's degree, Faculty of Economics, Amur State University 675027, Russia, Amur region, Blagoveshchensk, Ignatievskoe str., 21 medvedko.n@mail.ru

Taxes are an important part of the country's budget revenue. Corporate income tax is a direct tax, its value directly depends on the final financial results of the organization's activities ^[8]. It is the income tax that occupies one of the leading positions in the tax revenues of the budget of the Amur region. And the activities of tax authorities aimed at controlling the correctness of calculation, completeness and timeliness of taxpayers' payment of corporate income tax ensure the timeliness and completeness of tax revenues to the budget of the Amur region.

 One of the types of tax control is desk and on-site tax audits, the purpose of which is to monitor compliance with the completeness and timeliness of payment of fees, insurance premiums, taxes by taxpayers, payers of insurance premiums or tax agents. The analysis of the conducted desk tax audits on corporate income tax of the Federal Tax Service of Russia in the Amur region is presented in Table 1.

Table 1

Analysis of the conducted desk inspections in the Amur region for 2021-2023

Source: compiled by the author based on data from the 2-NK report (2021-2023) ^[9][10][11].

The leading number of in-house inspections carried out was observed in 2022 and amounted to 21,811 units, 74 fewer inspections were carried out in 2023, and compared to 2021, the activity of the Federal Tax Service in this area increased by 2,391 units or 12%. The record number of detected violations falls on 2021 and amounts to 24 units. According to the results of which 135 thousand rubles were accrued, of which taxes amounted to 36 thousand rubles, penalties – 2 thousand rubles, penalties – 97 thousand rubles.

In 2022, there is an increase in additional accrued payments, they amount to 710 thousand rubles, of which taxes - 281 thousand rubles, penalties – 114 thousand rubles, penalties – 315 thousand rubles. Most of all, additional payments for penalties were accrued.

 According to the results of 2023, the Federal Tax Service additionally accrued only 239 thousand rubles. payments, of which 219 thousand rubles. for taxes and 20 thousand rubles. for penalties. Tax violations were identified based on the results of four desk inspections.

Based on the results of the analysis, it can be concluded that there is a decrease in the number of desk tax audits ending with the identification of tax offenses, but at the same time there is a decrease in the total number of desk tax audits conducted.

The peculiarity of conducting such a type of tax control as on-site tax audits is that tax periods closed to in-house tax control are subject to verification, the depth of the on-site tax audit is 3 years. When planning on-site tax audits, the Federal Tax Service of Russia in the Amur Region uses a predominantly risk-based approach, based on the results of the work of the control and analytical department and the pre-verification analysis department. The analysis of the conducted on-site tax audits of the Federal Tax Service of Russia in the Amur region on corporate income tax is presented in Table 2.

Table 2

Analysis of on-site inspections conducted in the Amur Region for 2021-2023

Source: compiled by the author based on data from the 2-NK report (2021-2023) ^[9][10][11].

A record number of on-site tax audits were conducted in 2022. Their number amounted to 34 units, of which violations were detected in each audit. In total, additional payments of 455,692 thousand rubles were accrued (taxes – 307,432 thousand rubles, penalties – 127,862 thousand rubles, penalties – 20,398 thousand rubles).

The second place in terms of the effectiveness of on-site inspections is occupied by 2021, their number amounted to 29 units, violations of 25 units were detected. According to the results of the inspections, additional 455,692 thousand rubles were accrued. Taxes amounted to 307,453 thousand rubles, penalties – 127,862 thousand rubles, penalties – 20,398 thousand rubles. 

The fewest on–site inspections were carried out in 2023 – 6 units, of which 5 violations were detected. In total, additional payments were accrued - 90,835 thousand rubles (taxes – 89,822 thousand rubles, penalties – 1,013 thousand rubles). In 2023, compared to 2022, the number of tax audits decreased by 28 units or as much as 82%. The number of additional payments decreased by 796,951 thousand rubles. or 90%.

The state is aimed at increasing tax revenues from budgets, while taxpayers are trying in various ways to reduce the amount of tax accrued to them and preserve their income to a greater extent. Taxpayers do not always use legitimate and reasonable ways to reduce the tax base, some of them go purposefully to tax offenses.

A tax offense is a culpably committed illegal act of a taxpayer in the field of legislation on taxes and fees, for which responsibility is established by the current Code.

The most common schemes of corporate income tax evasion identified by the results of desk and field tax audits in the Amur region are presented in Table 3.

Table 3

Schemes of tax offenses on corporate income tax

  Source: compiled by the author personally.

There are quite a lot of types of tax offenses, some of the most common tax offenses are failure to submit or violation of the deadline for submitting a tax return, violation of the procedure for registration with a tax authority, non-payment or incomplete payment of tax amounts (fees, insurance premiums), and other violations of tax legislation ^[3].

Tax control can act as a tool not only to combat tax offenses, but also as a tool to prevent tax offenses. D. R. Khasyanova believes that the federal tax service should significantly change the forms of work with taxpayers. Its main task is to improve the quality of information services provided to taxpayers, reduce the influence of subjective moments in the interaction of those who collect taxes and those who pay them ^[7].

In order to warn taxpayers-organizations about tax violations, information alerts should be carried out on cases of tax offenses that are caused during tax audits. This will help reduce tax risks and create a comfortable climate for taxpayers. It is also worth informing about interim measures and tax sanctions for violations identified by the tax authorities. This will allow organizations to have a clear understanding of the norms of legislation on taxes and fees, as well as tax evasion schemes that have already been identified. Subsequently, this will reduce the number of offenses and prevent their reappearance.

The identification of tax offenses is also facilitated by the improvement of automated tax control systems, which will reduce the workload on both tax authorities and organizations. Updating the system and improving the automation of inspections will lead to more accurate and rapid detection of tax violations.

Administrative responsibility in the tax sphere has a significant impact on the state of filling the budget with funds and contributes to the prevention of economic crimes in the tax sphere ^[6].

The application of administrative responsibility for tax offenses entails a number of negative consequences for the offender, not only material, but also moral. At the same time, the Russian Federation applies fairly moderate sanctions for tax offenses.

Based on the reason for tax evasion – the maximum preservation of the income of organizations, as a method of combating tax offenses, it is possible to propose an increase in tax penalties and fines in an amount higher than the tax rate for which the offense was detected. When comparing the amounts of interim measures, tax sanctions, unpaid tax, the taxpayer will understand that it is more profitable for him to pay the tax initially.

The practice of illegal business fragmentation, the appearance of one-day firms, etc., through which part of the profits are withdrawn, has become very common. Based on this, the following activities can be proposed:

Prohibition of registration of more than two or three organizations per individual. This way, individuals will not be able to register many organizations for themselves, which will reduce the risk of opening shell companies, and also allow for more careful monitoring of the activities of enterprises.

Prohibition of registration of an organization under a notarized power of attorney. An individual on behalf of the head will not be able to submit documents.

Conclusion

Based on the results of the work, it was concluded that the number of tax offenses identified by the results of tax audits based on the materials of the Federal Tax Service for the Amur Region suggests the need to improve tax control over corporate income tax using such methods of preventing and combating tax offenses as information notification to taxpayers about the revealed facts of tax offenses, interim measures and tax sanctions for these offenses, an increase in tax penalties and fines in an amount higher than the tax rate for which a tax offense has been detected and a ban on registration of more than two or three organizations per individual. This will lead to an increase in the volume of funds flowing to the budget of the Amur region and a decrease in tax offenses committed by taxpayers.