Get ahead of the BURS audit by proactive management of tax risk through tax health checks

A “tax audit” is an examination of a taxpayer's financial and tax records by the tax authority to verify compliance with the tax laws.

Tax audits often result in significant financial consequences where non-compliance is identified, including substantial penalties of up to 100% of the additional tax (200% in the event of fraud or willful non-disclosure), interest, extended investigations, reputational damage, and in some cases business disruption or even forced closure. 

It is crucial for businesses to be proactive in managing their tax obligations and mitigating tax risks associated with a BURS audit. One of the most effective ways to achieve this is by undertaking a comprehensive tax health check. 

A tax health-check is a strategic move that protects your company’s reputation, minimizes exposure to penalties and interest and demonstrates sound corporate governance

It entails a systematic review of the company’s tax compliance, processes and documentation (such as contracts) to identify areas of non-compliance or incorrect application of the law, risky tax positions, errors or omissions before discovery by BURS during an audit. This proactive approach allows you to rectify any issues, strengthen your internal controls and adherence to the tax laws. 

Benefits of a tax health-check include the following:

• Early identification of risks – Potential tax exposures and areas of risk are identified allowing timely corrective action such as voluntary disclosure. 
• Voluntary disclosure – allows taxpayers to proactively report previously undisclosed or incorrect information to the tax authority before it is discovered through an audit. This approach demonstrates good faith and transparency, often resulting in reduced penalties and interest relief.
• Improved compliance – By addressing identified weaknesses and closing internal control gaps compliance with the law is strengthened thereby reducing the likelihood of increased audit scrutiny and future penalties and interest charges. 
• Enhanced efficiency – The process can help streamline your tax processes, improve record keeping, and ensure improved management of tax obligations.
• Reduced audit disruption – Being better prepared for BURS audits can significantly reduce potential disruption associated with tax audits. 
• Potential for tax optimization – While the primary goal is compliance, a tax health check may also identify opportunities for tax optimization within the legal framework. 
• Deal enhancement – It is a proactive tool through which the seller’s position is strengthened and the deal value is maximized by identifying and addressing potential tax compliance issues and tax liabilities upfront.
• Develop an effective tax strategy – Information obtained from the tax health-check can be utilised to improve or develop a robust tax risk framework to ultimately mitigate tax risk.
• Improve employee capabilities – Training needs may be identified during a tax health-check.

How Grant Thornton can help 

Our tax audit preparation includes a comprehensive tax health check, which is a high-level review of key tax areas most scrutinized during audits, with the aim of identifying potential risks and exposures. 

Our full range of taxation services

Our tax services include:

• Tax compliance 
• Tax consulting (project or transaction specific) including provision of tax advice on
  • Project taxes 
  • Holding structures 
  • Restructuring and amalgamation 
  • Cross-border taxation 
• Assistance with applying for tax incentives including:
  • IFSC certification
  • Manufacturing Development Approval Order
  • SPEDU Development Approval Order
  • SEZA accreditation
• Transfer pricing – Preparation or review and  filing of documentation 
• Tax due diligence 
• Tax health-check
• Assistance during BURS audit/investigation 
• Global mobility services (assignee and company tax compliance and consulting) 
• Tax Compliance Report review and assistance with resolution of issues