Ministry 2003/04 Annual Service Plan Report - Government of British Columbia.
   

Goal 2: Collection of all outstanding amounts owed to government

When a taxpayer does not remit amounts owed to government, the ministry undertakes audit and enforcement activities. These activities assist in ensuring that the taxes owed are collected, deter taxpayers who might otherwise avoid paying, and link directly to Goal 1 as a key factor in increasing voluntary compliance. Performance measures used to evaluate achievement of this goal include the net incremental revenue target, which is the amount of revenue, mainly from taxes, collected after the ministry has initiated enforcement action minus expenditures. A substantial amount of revenue is derived from out-of-province audit assessments, which ensures that British Columbia businesses are not at a tax disadvantage to their out-of-province counterparts operating in the province.

Goal 2: Collection of all outstanding amounts owed to government Performance Measures 2002/03 Base 2003/04 Target 2003/04 Actual Variance
Core Business Area: Tax Administration and Collection
Objective: Collect and increased net amount annually through audit and enforcement activities
Key Strategy: Maximize monies received through audit, and enforcement activities Incremental (new) net revenue over the 2001/02 base year $7 million $34 million $210 million +$176 million

See Note 3

  Number of audits performed 145,000 148,000 184,441 +36,440

See Note 4

Core Business Area: Note 5
Debt Administration and Collection and Home Owner Grant
 Tax Administration and Collection
Objective: Reduce key overdue accounts receivable ratios
Key Strategy: Continue to improve collection tools and approaches Ratio of total government overdue (\>90 days) total accounts receivable to total government accounts receivable (See Note 6) 45% 42% 40% –2%
Core Business Area: Tax Administration and Collection
Objective: Government receives the revenue it is due through compliance with tax revenue statutes
Key Strategy: Focus resources on tax audit function Average annual tax assessment per auditor $510,000 $520,000 $924,000 $404,000

See Note 7

Improve collaboration across to pursue joint tax enforcement activity Annual overdue account receivable tax revenue per collector $2.6 million $2.7 million $4.3 million +$1.6 million

See Note 8

Note  3:
 Greater than expected achievement on incremental revenues result from a number of factors, including the variability of some revenues, certain extraordinary revenues resulting from new audit and enforcement activities, increased success in assessing revenues as a result of focused attention to areas such as the underground economy, and other factors. Extraordinary revenues include unanticipated recoveries in Corporation Capital Tax, income tax residency allocations and corporate income tax allocations, gas validations and produces Cost of Service Approvals.
Note 4: 
 The ministry focuses audits in those areas where there is a greater likelihood of non-compliance. Audits provide the taxpayer with a clear understanding of their tax obligations and serve as a strong non-compliance deterrent. In fiscal 2002/03, the ministry actually performed 194,104 audits.
Note 5: 
 The ministry over 90 days accounts receivable target was set on the basis of a consolidated measure, which is the way it is reported, although in the 2003/04 Service Plan the measure was mistakenly split in to tax and non-tax accounts receivable.
Note 6: 
 Reductions in the overdue accounts receivable ratio indicate that a greater proportion of the total debt owed to government is being paid before it becomes more than 90 days overdue.
Note 7: 
 Auditor assessments result in increased incremental revenues (those revenues which are generated as a result of ministry activity, as opposed to voluntary revenues). Average auditor assessments may increase as a result of one-time revenue opportunities, which in turn contribute to higher than anticipated performance in the ministry's incremental revenue target for 2003/04. Higher collector recoveries may also occur during periods of unusually high incremental revenues. In comparison, the 2002/03 annual assessment per auditor was $1.1 million. When extraordinary recoveries are removed from the results, the 2003/04 average annual assessment per auditor was $645,505 against a target of $520,000.
Note 8: 
 Higher collector recoveries may also occur during periods of unusually high incremental revenues.

 

  
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