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…