Improving Tax Collection in Developing Countries

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With most changes, taxpayers receive audit protection such that the IRS could not challenge prior years on an impermissible method and could not impose interest and penalties for treating an item incorrectly. The tax systems in most rapidly growing economies are highly informal and often unnecessarily complex. Simplifying the tax code encourages voluntary compliance, while at the same time sending the message that efforts to formalize the system are a priority. For example, in 2009 South Africa introduced a less complicated “turnover tax” as an alternative to the normal corporate income tax and value-added tax. The system attracted more than 7,000 new taxpayers in the first year alone.

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  3. When it comes to running a restaurant, dealing with sales tax compliance can be a bit tricky.
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Sales Tax and Due Diligence in an M&A Deal

Nexus, in the context of sales tax, refers to the connection or presence that obligates a business to collect and remit sales tax in a particular jurisdiction. Accurate nexus determination is crucial for mitigating the risk of non-compliance and the potential audit-related challenges it poses. Restaurants, whether they have one location or multiple, need to assess their physical and economic presence to ensure they are meeting their tax obligations. Understanding when and where you have nexus can significantly impact your compliance efforts.

Understanding the application of Sales Tax to the Restaurant Industry

Although tax administrations usually have large-taxpayer units, these LTUs often use the same processes, rules, and resources as general tax offices. LTU “account managers,” supported by a back office devoted to their needs, can provide large taxpayers with differentiated and improved tax collection methods services that will ensure increased revenues. One sub-Saharan country, for example, doubled the number of auditors in the audit teams of its large-taxpayer unit and implemented an ambitious training program to raise their technical skills and the quality of their work quickly.

My clients tell me that I have a knack for being able to take a difficult topic (like state tax) and make it easy to understand and ultimately remedy tough situations. I’ve worked with clients in many industries, including technology, manufacturing, retail, construction and financial, among others. Property taxes are generally imposed on physical property, such as land and buildings. Property taxes finance key public services, such as fire departments, schools, roads, security, and rapid medical services. As businesses wrap up their 2020 tax returns and compliance, it’s never too early to begin tax planning for 2021. Taxpayers can be incentivized in several ways to evaluate and change accounting methods.

Successful reform can enable a country to tackle the challenges of rapid growth and ensure that the flow of revenue is stable and longer lasting. For more information about making payments, online payment agreements, and offers in compromise, visit our Payments page. The Website specifically prohibits you from usage of any of its facilities in any countries or jurisdictions that do not corroborate to all stipulations of these Terms of Use.

Adapting to upcoming changes is essential for compliance and risk reduction. Staying informed and aligning with evolving tax laws not only safeguards against audits but also provides legal and financial security. It also enhances the restaurant’s reputation, as customers value ethical business practices. As a restaurateur, being proactive in this regard is a strategic move for success in sales tax compliance. Taxation refers to the fees and financial obligations imposed by a government on its residents. However, taxation applies to  all payments of mandatory levies, including on income, corporate, property, capital gains, sales, and inheritance.


Outside of work, I enjoy spending time with my family and friends, and occasionally, going out to shoot some hoops. Integrated Point-of-Sale (POS) systems are a smart choice for restaurants seeking precise tax records. They automatically calculate taxes for each transaction, reducing the chances of errors. This consistency is vital, especially for restaurant chains with multiple locations where tax rates can vary.

Tax Manager

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Nonetheless, simply segmenting taxpayers according to attributes such as size, sector, and past behavior can help tax authorities quickly perform a risk analysis identifying discrepancies between an individual taxpayer’s behavior or payments and that of his or her cohort. By applying this technique to approximately 500 taxpayers, the tax administration in one African country, then in the early stages of its improvement journey, identified a small number of taxpayers who together owed 5 percent of the nation’s total uncollected tax debt. I started my career in tax working for a Big 4 professional services firm where I was based in Silicon Valley and primarily focused on the technology industry. There I gained a broad base of experience in multistate taxation including income, franchise, sales & use, and other state and local based taxes. I enjoy working in state and local tax because of the range of challenging and interesting projects that continually arise.

In parallel, the unit launched a focused effort to analyze and close a small number of high-value, complex cases in specific sectors by using specialized audit teams with sector-specific training and skills. The additional revenue the specialist teams identified equaled 2 to 3 percent of the tax authority’s total yearly revenue. Before becoming a Tax Consultant, I spent many years in the corporate world in various roles such as accounting, sales tax, income tax, and forecasting as well as auditing for industries including CPA firms, research and development, and software companies. I have a passion for sales tax and enjoy the arena because it is both exciting and challenging. I have worked with various clients of all sizes from small businesses to large corporate clients. I provide client services in sales tax onsite as well as offsite and consult on a variety of sales tax issues.

Capital gains taxes are levied on capital assets, which include personal properties and investments like stocks, homes, bonds, cars, or jewelry. When an asset increases in value, such as rising stock prices, it is referred to as capital gain. In modern times, taxation is also applied to physical assets and specific contracts, such as business transactions. Number of Returns Filed Electronically, by Type of Return and StateThe number of tax returns filed electronically is available broken out by state. Also included are the breakouts for online filers and paid-preparer filed returns. Internal Revenue Gross CollectionsShown by state and by type of tax, including corporation, individual and employment, railroad retirement, unemployment insurance, estate, gift, and excise taxes.

Accurate record-keeping and following tax rules not only make good business sense but also protect against the uncertainties and financial risks of audits. These are different ways restaurants can collect sales tax, each with its own advantages for reducing the risk of audits and ensuring accuracy. Direct taxes are levies subjected to individuals based on the taxpayer’s net wealth, expenditure, or personal net income. Levies on net worth are based on the taxpayer’s assets value minus total liabilities, while expenditure taxes are paid on income that is not directed to savings.