Detective work is all part of Connie Chan Fung-kuen's job as senior tax assessor in the Field Audit and Investigation Unit at the Inland Revenue Department.
My group deals with tax avoidance cases. I lead a section that consists of four teams of officers, and I'm responsible for the planning and control of work.
I graduated from Hong Kong Polytechnic University and was offered jobs by big accountancy firms. I chose to join the Inland Revenue Department as an assistant assessor because the integrity of the civil service had earned the trust and confidence of the public. I take pride in serving the community.
Most of my days are spent assessing cases for tax audit, which are selected using a risk assessment process. High-risk cases are picked out for priority action. A good knowledge of trends and performance in specific industries or trades helps in identifying these risks.
We start a tax audit with a site visit to the business premises. This gives us an early understanding of the accounting system used and a better knowledge of how the business is run.
It also gives the Inland Revenue a more visible presence, which in turn promotes compliance. We need to be keen observers during field visits to be able to instantly follow up any irregularities.
Then we will examine business records and trade documents and follow the flow of money and goods to draw out real facts. This requires sound knowledge of accounting and auditing principles and the ability to correctly apply tax laws.
After the review, the team discusses the findings and constructs workable solutions and develops corrective measures to resolve the case amicably. We keep continued dialogue with the taxpayers and have to be tactful and build good working relations with them. At the same time, we have to project a professional image to convince them of our stand with solid grounds and legal basis.
Through audit action, we want to encourage taxpayers to report correctly in the future. In cases where the taxpayers refuse to concede, we put up these cases for the commissioner to resolve.
We audit a wide spectrum of taxpayers, from corporations to individuals from all walks of life, so I relish the challenges of meeting different people every day.
For tax avoidance cases, we look at the corporate group as a whole. We try to understand the roles played by different entities within the group and how they interact. One of the common gimmicks employed by companies to avoid tax is through reorganisation of group structure whereby a new company is formed in a tax haven which books the profits.
For someone to succeed in this job, technical knowledge, professional skills and a pleasant personality with good communication skills are required. An analytical, inquisitive mind to find solutions is also important.
Changes in tax laws and in the structure of economic activity may give rise to new kinds of avoidance, so my biggest challenge is to remain vigilant in the face of emerging trends and patterns.
Tax audits may not be welcomed because of concern that we will disrupt business operations or intrude unnecessarily into business affairs. If we're transparent in our approach, reasonable in our request and courteous, we can secure their co-operation and participation. That helps reduce much work pressure.
But it can be stressful at times. So for me, listening to classical music is an effective way of relaxation. Reading and singing hymns are also my favourite pastimes to relieve work pressure.
Tax Avoidance and Tax Evasion