Transformation of Tax Audit in Innovative Economic Development: Analysis of Republic of Kazakhstan

153 Pages·2023·3.032 MB·English

by  Madina Serikova, Lyazzat Sembiyeva

Madina Serikova
Lyazzat Sembiyeva
Transformation
of Tax Audit
in Innovative
Economic
Development
Analysis of Republic of Kazakhstan
Transformation of Tax Audit in Innovative
Economic Development
·
Madina Serikova Lyazzat Sembiyeva
Transformation of Tax Audit
in Innovative Economic
Development
Analysis of Republic of Kazakhstan
Madina Serikova Lyazzat Sembiyeva
Faculty of Economics Faculty of Economics
L. N. Gumilyov Eurasian National L. N. Gumilyov Eurasian National
University University
Astana (Nur-Sultan), Kazakhstan Astana (Nur-Sultan), Kazakhstan
ISBN 978-981-19-8760-1 ISBN 978-981-19-8761-8 (eBook)
https://doi.org/10.1007/978-981-19-8761-8
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Dedicated to parents Dariga Zhukessova
and to the memory of father Amangali
Abdirov
Scientific Publication
Recommended for publication by the Academic Council of the L. N. Gumilyov
Eurasian National University.
Reviewers
A. B. Zeynelgabdin—Professor of the Institute of Management of the Academy of
Public Administration under the President of the Republic of Kazakhstan, Doctor of
Economics
A. A-K. Karybayev—Head of Applied Scientific Research, Department of the
Research, Evaluation and Analysis of Efficiency Center of Accounting Committee
for Control over execution of the republican budget, Candidate of economic sciences
vii
Introduction
The process of economic modernization and the introduction of government auditing
institution enhances the abilities and significance of the state tax audit as a tool for
increasing tax revenues. The most important mission of the state tax audit is to
maximize the growth of state budget revenues in order to increase and make the
economy stable as a whole.
The Address of N. A. Nazarbayev, the First President of the Republic of Kaza-
khstan, to the people of Kazakhstan dated October 5, 2018, specified the need for
a transition to a “cashless economy,” tax and customs information system integra-
tion completion, increased administration transparency and adoption of the effective
measures to reduce shadow turnover in the economy by at least 40% over 3 years. It
is possible to solve this issue through the application of the state audit in general as
well as state tax audit, in particular.
In accordance with the Decree of N. Nazarbayev, the President of the Republic
of Kazakhstan, On Measures to Implement the Address of the Head of State to the
People of Kazakhstan dated December 14, 2012, Kazakhstan—2050 Strategy: a new
policy of the succeeded state, the concept of the introduction of state audit in the
Republic of Kazakhstan was approved. Within the framework of this concept, the
Law No. 392-V of November 12, 2015, of the Republic of Kazakhstan On State
Audit and Financial Control was passed. This enactment became the starting point
for the development of state audit as a separate independent audit institution at the
national level.
According to the report of the Accounts Committee for Control over Execution
of the Republican Budget for 2018, in Kazakhstan there is an increase in the share
of tax revenues in the structure of revenues of the state budget of the Republic
of Kazakhstan. However, it should be noted that this growth is explained not by
qualitative changes in the system of control and regulation of compliance with tax
laws, but by the policy of systematically reducing ensured transfers of the National
Fund of Kazakhstan. According to statistics, in the structure of the budget revenue,
tax revenues amounted to 68% in 2013, 56% in 2016 and 71.6% in 2018. However,
their share decreased to 64.5% in 2019, which indicates the need to reduce the raw
material orientation of the economy when introducing tax incentive tools aimed at
ix
x Introduction
the development of the non-primary sector and small-and medium-sized businesses.
At the same time, issues related to effective planning, monitoring and control by
authorized bodies in the field of tax administration remain unresolved.
According to the concept of the New Budget Policy, in order to maintain macroe-
conomic stability and balance of public finance, the budget policy will focus on
expanding the tax base and ensuring the completeness of the budget revenue, reducing
the deficit, increasing income resulting from the non-oil sector and limited use of the
funds of the National Fund.
The Address of K-Z. Tokayev, the President of the Republic of Kazakhstan, to
the people of Kazakhstan dated September 02, 2019, noted the need to transition
to a “cashless economy,” act against informal economy, tighten the fight against
disinvestment, tax evasion, improve the tax system focusing on a more equitable
national income distribution as well as improve the quality of the current tax system.
Accordingly, the full functioning of the public auditing must be ensured, as well
as the state tax audit, in particular.
The problem is more relevant because to date, scientific and practical aspects are
not studied enough regarding the subject of research; theoretically, the organizational
issues are not generalized; and methodological approaches to conducting a public
tax audit are not determined.
Thus, the problems of imperfect tax audit and control system are confirmed in
the data of Taxation Doing Business the international rating where Kazakhstan ranks
64 among 190 countries. In turn, the time spent on preparing and submitting reports
by taxpayers takes 186 hours per year which is significantly higher than the similar
figures of the developed countries of the Organization for Economic Cooperation and
Development (OECD). Under relatively favorable tax conditions and the capacity of
the national economy, the tax administration process remains at a satisfactory level
and involves a significant change in tax relations.
These reforms should be accompanied by an accelerated transformation of the
public tax auditing system within the framework of innovative development. Inno-
vative tools, unlike traditional approaches, are more effective and guarantee a cumu-
lative, stable effect aimed at achieving strategic goals. Public tax auditing system
transformation is not a measure of influence on a certain range of problems of opera-
tions of state tax authorities, but a comprehensive system aimed at minimizing losses
of state income and creating a transparent mechanism for the tax system functioning.
Thus, in modern conditions, the state tax audit institution as the highest extent of
tax control plays a key role in the economic development of the state and requires
further scientific and theoretical reflection, the development of appropriate method-
ological support, methodological and practical recommendations for its regulation,
which determines the relevance of the monograph.
Despite the great contribution of scientists to the study of the problems related
to implementation of the tax audit institution as well as its transformation in the
conditions of economic innovative development, there is no comprehensive approach
to the concept and assessment of state tax audit in domestic literature.
Introduction xi
The need for the study is caused by the insufficient development of a model for the
state tax audit institution transformation and the prospects for its further innovative
development. This study identifies the following tasks:
– to investigate and classify the views of foreign and domestic scientists and to form
an original approach to the concept of state tax audit;
– to identify the main stages of tax audit formation and transformation in the
Republic of Kazakhstan and global trends of tax audit development in the
innovative economy;
– to assess taxable capacity in the Republic of Kazakhstan in terms of innovative
economic development based on indicative approach;
– to represent the organizational model of tax administration in the context of the
tax audit transformation in Kazakhstan;
– to assess the efficiency of the state tax audit and tools to ensure the full and timely
receipt of tax revenues using the integrated assessment method;
– to develop a transformational model of tax audit improvement based on an inno-
vative approach and to determine the prospects for the state audit development in
the Republic of Kazakhstan in terms of integration processes.
The theoretical and methodological basis of our research is represented by basic
factors of theory and practice summarizing the achievements of worldwide thinking
regarding the state tax audit as well as enactments and regulations of the Republic of
Kazakhstan, international state audit standards, records of the Ministry of Finance
and the Ministry of National Economy of Kazakhstan.
Contents
1 Theoretical and Methodological Framework of Tax
Audit Transformation in Context of Innovative Economic
Development ................................................... 1
1.1 Classification of Conceptual Approaches to the Economic
Essence of Tax Audit ....................................... 1
1.2 Institutional Features and Stages of National Tax Audit
Transformation ............................................. 17
1.3 Global Trends in the Transformation of Tax Audit Models
in the Modern Innovative Economy ........................... 28
1.4 Conclusions ............................................... 42
References ..................................................... 42
2 System Analysis of Performance of Tax Audit of the Republic
of Kazakhstan ................................................. 49
2.1 Evaluation of the State of the Taxable Capacity of the Republic
of Kazakhstan in the Innovative Economic Development
and Its Forecasting Based on the Indicative Approach ............ 49
2.2 Organizational Model of Tax Administration in a Context
of Tax Audit Transformation in the Republic of Kazakhstan ...... 64
2.3 Integrated Assessment of Efficiency of Tax Audit and Tools
Ensuring Full and Timely Receipt of Tax Revenues .............. 74
2.4 Conclusions ............................................... 83
References ..................................................... 84
3 Main Directions of Tax Audit Transformation in Innovative
Development of Economy of the Republic of Kazakhstan ........... 85
3.1 Scenario Analysis of State Tax Audit Development
and Modeling of Innovative Approach ......................... 85
3.2 Prospects for the State Audit Development in the Republic
of Kazakhstan in the Context of Integration Processes ........... 99
3.3 Conclusions ............................................... 116
References ..................................................... 116
xiii