A thesis submitted in the partial fulfilment of the requirements for the degree of
MASTERS IN COMMERCE (TAXATION) by Marius Jacobus Nel – December 2004
ABSTRACT
The vision of probably all revenue authorities is to promote compliance with
the provisions of the taxation laws and to ensure responsible enforcement by
the revenue authorities, thereby contributing to the economic well being of the
country. As with virtually all revenue authorities the South African Revenue
Services has to a large extent implemented the self-assessment approach to
tax assessments. Because this system depends on this process of selfassessment,
an effective risk-based audit approach is required to ensure that
tax compliance and responsible enforcement is adhered to. An effective case
selection methodology is required for revenue authorities to make informed
choices on how best to direct their activities in order to address areas of
greatest risk.
Given these imperatives, the purpose of this study is to examine the case
selection methodologies used by certain revenue authorities, including the
South African Revenue Services, and to focus on the key elements of case
selection: the use of computerised database systems, industry profiles, third
party data and the role of the risk profiler.
The results of the study indicate that the case selection methodology of the
South African Revenue Services is lacking in some areas. Computerised risk
analysis is limited to a certain classes of taxpayers and other aspects of
concern are also highlighted in this study.
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