Roman Kenigsberg on Challenges of Implementing Internal Tax Control

FBK has taken part in the ‘Tax Control Digitalisation and AIS Tax-3 Integration’ conference hosted jointly by the Federal Tax Service of Russia and NOTA VISOR. Roman Kenigsberg, Head of the Internal Audit and Risk Management Services Department at FBK, spoke on the challenges of implementing internal tax control and ways to address them. The expert stressed the need to implement an internal control system not only to manage tax risks, but also to generally ensure efficient business operations.

Internal control is based on five components – control environment, risk management, control procedures, information and communication, and internal control monitoring. The criteria of each component apply on both the company and specific function levels, e.g. tax. As a result, the discussed challenges and solutions were also grouped according to these five components.

The speaker especially focused on the subjectivity of risk identification and assessment associated with ignoring risks that the company has not encountered before, or low residual risks.

This issue could be solved through the exchange of risk libraries between market participants or the use of external consultants' expertise. External expertise will also come in handy in regulating control procedures, shaping internal communications for their implementation and gathering compliance evidence, as well as in assessing the internal control efficiency.