Taxpayers returned close to $1 million –– $976,458.91 to be exact –– in overpaid refunds to the Inland Revenue Department during the financial year 2012-2013.
“This is approximately 300 per cent more than the amount reported as returned by taxpayers in the previous audit report,” revealed Auditor General Leigh Trotman in his latest report.
“It should be noted that some overpayments were in respect of taxpayers receiving reverse tax credits to which they were not entitled, and some taxpayers who were refunded twice in error.
“These instances in which persons voluntarily return overpayment of the refunds to the department point to serious deficiencies in internal control,” the Auditor General said, while noting that “not all overpayments will be returned and therefore Government was incurring significant loss from this lapse in controls”.
“This has been an ongoing problem for the department which appears to be steadily growing. This issue needs to be urgently addressed,” he warned.
Other discrepancies were highlighted in the department, which issued $116,089,104 in refunds but only disbursed $111,726,200. This resulted in an unexplained difference of $4,362,904.
Of the total refunds returned, receipts totaling $63,911.06 were not traced to any deposit. Out of a sample of 30 revalidated cheques, seven instances were found where the taxpayer did not qualify for the amount on the cheque. In each case, the taxpayer was overpaid by $1,300 and there was no evidence to indicate that the excess funds were returned by the taxpayers.
In terms of non-filing, the Auditor General Report pointed out that some companies did not file for some tax periods but there was no evidence on these taxpayers’ accounts to indicate they were pursued by the department for failing to file tax returns.
“The department needs to actively pursue those persons and businesses that have not filed tax returns,” the Auditor General said, warning that “the longer these violations go unchecked the more unlikely it will be to recover any amounts that remain outstanding,” the report said.