Risk-based audits: improving tax compliance

For two years, ECOPA has been honing its expertise in the design of risk-based audit (RBA) strategies. Using state-of-the-art econometric analysis, ECOPA produces risk scores providing reliable information on the likelihood of each taxpayer complying with current tax regulations. This information in turn drives ECOPA’s audit strategies design.

The objective of ECOPA’s RBA assistance is a more efficient use of resources by tax authorities and revenue agencies. Accurate analysis of taxpayers’ likelihood of compliance can substantially reduce the number of audits while increasing net fiscal revenues. And an entirely data-driven selection of auditees limits the interaction between auditees and auditors and thereby reduces rent-seeking behaviours and corruption opportunities.

Unlike other methods of risk assessment such as data matching, ECOPA's approach remains robust in an environment with limited and/or low quality data. This feature is a decisive factor for the administrations of emerging countries.

If you want to find out how ECOPA could assist your organisation, please email our specialist RBA team.